Monday, April 12, 2010

Thinking With The Right And Left Sides Of the Brain

In April – but well past April Fool’s day – state Comptroller Nancy Wyman made a serious admission to a reporter for CTMirror.

Discussing surpluses and spending caps that do not and never will cap spending, Wyman remarked:

“’The problem is that every time we have had a surplus, we have broken through the spending cap,’ said Wyman, who also proposed a requirement that at least 1 percent of any projected surpluses identified monthly by her office immediately be deposited into the budget reserve.”

That is a golden perception: Money available to the General Assembly in the form of surpluses will be spent; you can bet your bottom deficit on it. Indeed, it has been spent. A surplus, it should be remembered, is by definition an overcharge. It is the amount of taxes collected over and above budgetary requirements. Overcharges should be returned to those overcharged.

Wyman thinks such surpluses ought to be routed into a rainy day fund, where they will be saved for a rainy day. Been there, done that.

The state, in fact, had a rainy day fund – note the past tense. But that reserve fund was plundered and depleted by the Democratic controlled state legislature and Gov. Jodi Rell in an attempt to discharge a massive deficit. Connecticut is now confronting -- some would say failing to confront -- a future deficit of some $4-6 billion, depending upon whose figures one conjures with.

Wyman’s solution to the state’s quickly depleted rainy day fund is – a larger rainy day fund. The real solution to the state’s deficit lies in spending cuts that would reduce spending by about 15%.

The continuing recession, the new and expensive programs recently added by a national legislature concerned with health care and insurance regulation, the prospect of insolvency in the case of social security, Medicare and Medicaid, the continuing flight of entrepreneurs and capital out of Connecticut, the losses suffered by Wall Street firms that contributed to Connecticut’s treasury and the prospect of future state tax bites all argue against a short term recovery. It took Connecticut 10 years to recover jobs lost during the last national recession, and the economy then, goosed by targeted tax cuts, soon rebounded. Given the ideological predisposition of the White House and the political make-up of congress, tax cuts, Main Street’s stimulus, are out of the question, and debt stretches its boney hand over the future.

Putting all these ominous signs aside, why on earth should a spending cut averse legislature reduce spending when so many Democratic politicians suffering from unionophobia – an irrational fear of unions – can increase the revenue they recklessly spend by increasing rainy day funds, by borrowing against future anticipated revenue and employing other devises that spare legislators from the painful spending cuts that affect their supportive constituencies?

The answer to this question is: They don’t -- and won’t.

You can drag Speaker of the House Chris Donovan, once a union steward, to a spending cut, but you can’t make him make it.

Legislators and others who believe that Connecticut does not have a spending problem but rather a revenue problem think on the left side of their brains. Budget watchers in the state who have seen the bottom line of the state’s budget balloon threefold within the space of three governors think with the right side of their brains.

“No,” say the right thinkers to those in the legislature and elsewhere who believe with the fervency of a committed cultist that Connecticut taxpayers are under-taxed, “You are mistaken. The current size of the deficit points to a spending problem as the principal culprit responsible for the state’s impecunious debt.”

CTMirror notes that “The state currently has authority to reserve an amount equal to 10 percent of annual General Fund spending. The General Fund comprises the bulk of state government's operating expenses, roughly $17.4 billion out of this fiscal year's $18.64 billion overall budget. Wyman's proposal would boost that to 15 percent.”

But 15% of nothing is nothing. And, in any case, future surpluses are the stuff dreams are made of.

The state will be waiting a long time for those sun drenched days of yore, when the barn were full and the legislature in full throttle, spending surplus after surplus after surplus, heedless of the day, now upon us, when they would be called to account for consuming the seed grain upon which future harvests depend.

Thinking with the right side of their brains, Hartford Courant editorial writers last Sunday beseeched the state legislature not to “raid” the Citizens' Election Program fund, which had been put aside to furnish political hopefuls with untainted campaign money.

Why?

Because spending is like chocolate – instantly addictive, and far more destructive in the long run than painful but prudent cuts in spending.
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