Getting and Spending in the Land of Steady (Bad) Habits

The problem with socialism, British Prime Minister Maggie Thatcher once said, is that “sooner or later, you run out of other people’s money.”

The same problem occurs when legislators, taking advantage of a temporary boost in funding from a tax rich federal government, uses temporary funding to increase spending knowing full well that the temporary and distorting  infusions of federal money soon will dissipate.

The funds presently supplied to Connecticut by the Biden administration having run out, the problem the state will face in 2024 is painfully simple: How do you continue to finance the increased spending load when the federal well has gone dry?

There are numerous solutions to this pressing but easily ignored problem. You might urge the federal government – which can print money at the risk of increasing inflation, already at record highs – to continue financing long term state spending, resulting in a net zero cost to the states.

The net zero cost is, of course, somewhat misleading, since state tax payers are also federal taxpayers. Despite the fanciful notions of progressives -- whose watchword always has been MORE SPENDING PLEASE – federal money does not grow on a tree in the basement of the White House. It is either appropriated by the federal government through additional taxation, manufactured by the printing of more dollars, the prime cause of inflation, or it is drawn from private wells through borrowing and bonding. These wells, of course are community wells, and the more money drawn from them by a thirsty federal government, the less is left in the wells for free market development, business expansion and a consequent increase in federal and state revenue.

The most sensible and least destructive solution to the inevitable consequences of profligate spending is to initiate permanent, long term spending cuts. The real consequences of excessive spending, hardly mysterious, are tediously predictable. If the government of Connecticut was a private individual nursing a debt of $58 billion, the debt delinquent would be spending the next hundred Christmases in prison, and Connecticut soon would have a new parsimonious court-ordered government.   

The ruling Democrat Party in Connecticut -- especially during an election year in which votes are easily purchased by floating inflated and temporary appropriations before the eyes of potential voters -- has no intention of reducing the money the state soon will run out of. That is why the “spending cuts” now dangled by ruling Democrats before bewitched and confused voters are both temporary and illusory, while their spending increases will be permanently costly.

Also illusory is the notion that exorbitant spending can be absorbed by the undertaxed rich, if only they could be forced to pay their “fair share” by windmill assaulting progressives whose campaigns are financed by the conspicuously rich.

The following graph produced by the Heritage Foundation shows the amount paid in 2018 by the rich in federal income taxes and earned adjusted gross income:

  

The figures shown above are probably not too much different in Connecticut.

The plots and mansions in Greenwich, Connecticut are a showcase of conspicuous consumption.  The two leading vote getters who will appear on the Democrat ballot in 2020, U.S. Senator Dick Blumenthal and Governor Ned Lamont, are Greenwich millionaires whose campaigns this year will in part be financed by other conspicuous consumers living in splendor in some gated Connecticut community well-fortified against the mayhem and social disruptions one has come to expect in the state’s far less conspicuously rich shoot’em up cities.

We can all agree that the billionaires among us, many of them huddled together in Connecticut’s “Gold Coast,” should be less obscenely immodest in their spending habits.  It was, after all, the conspicuous consumption of Versailles and a lack of bread in the Paris of Robespierre’s day that helped to inflame the sans-culottes who guillotined King Louis XVI of France and Marie Antoinette.

A knot of progressive Democrat legislators in Connecticut consider “Eat the Millionaires” campaign talk to be a useful vote getter. Gluttony and greed are, after all, two of the seven deadly sins. But the campaigners are sitting on a dark secret, because a do-good government poised to share a “fair share” of conspicuous consumption with the destitute in Connecticut’s imprisoned urban poor also may be greedy and gluttonous. 

A rapid increase in spending from 1991 -- the date when Connecticut’s income tax was imposed, be it noted, not only on the idle rich – to 2022 is an object lesson in gluttony and envy, another of the seven deadly sins. Connecticut’s annual operating annual revenue in 1991 was about $7.5 billion. The state’s current biennial operating revenue is $31.96 Billion, according to the Office of the Comptroller, a figure that does not represent a model of perfection for abstemious sinless legislators.