Monty Pelerin's World

Economics, Finance and Politics Through The Prism of Classical Liberalism

Madison is Merely the Opening Act

Madison, WI may be taking up most of the domestic headlines with its budget battles, however that will change. All states and municipalities are, to various degrees, similar to Wisconsin. Government spending is not sustainable. The fantasy world of the last couple of decades produced higher GDP as a result of debt expansion. Neither the GDP nor the tax revenues generated are coming back any time soon. Governments at all levels spent like drunken sailors, assuming the cornucopia of excess tax revenues would never close. It has. Now hard decisions must be made. There is not enough revenue to pay for current spending no less add new government programs.  There are no easy solutions for the profligacy of the past. Rollback of government is painful. It can either be managed via the political process or it can be imposed via draconian action. Democrats not in power better learn to cooperate in managing the cuts lest they be cut out of the process completely. Cuts are coming. They must. Here is an example of what one municipality plans: Providence School Superintendent to Send Dismissal Notices to All 1,926 Teachers; Providence is Bankrupt. Unless cuts can be managed via the political process, drastic actions like Providence will be imposed. There is no other choice! Taxpayers are unwilling to be exploited by government anymore. Increased taxes are not a solution. Nor is delay. Hopefully the protests can be limited to Madison-style and not progress to Cairo or Tripoli events.