Why We're Going Broke

No matter how consistently they to promote more government spending, even the most liberal-minded news outlets occasionally explain why our government budgets are in so much trouble.

We recently discussed an article from the Wilson Quarterly.  It's published by an organization directed by Secretary of State Hillary Rodham Clinton and Health and Human Services Secretary Kathleen Sibelius among other liberal luminaries.  Their article pointed out that locked-in entitlement spending is crippling Western economies by running up debt.

Entitlements cost more than can be raised through taxation and are covered by borrowing money.  The debt load is unsustainable because lenders are either demanding higher and higher interest rates to cover the risk that they won't get their money back or refusing to roll over their loans as they come due.

"But wait," you may say.  "Aren't liberals convinced that government spending leads to economic recovery?  Why doesn't all that welfare spending bring the economy back?"

The simple answer is that government spending is directed towards influencing voters to vote for more spending, it isn't focused on increasing economic growth.  Private, growth-oriented spending by investors who want to multiply their money creates jobs, increases tax revenue, and leads to economic growth.

The Quarterly may not realize that their article demonstrates the futility of spending programs like the Obama "stimulus" which are sold to boost the economy and end up lining the pockets of Mr. Obama's supporters.  Similarly, the equally-liberal Concord Monitor may not realize that they've explained why state budgets are in so much trouble.

Art for Politics' Sake

The Concord Monitor is published in Concord, NH, the state capital of famous first-primary swing state New Hampshire.  It's a determinedly liberal outlet with many government employees among its subscribers.  As New Hampshire tended bluer over the past half-century, the Monitor gained subscribers at the expense of the Manchester Union Leader.  The Leader was based in the old-time, profit-oriented manufacturing city of Manchester, a few miles down the highway but light-years away in terms of economic thought.

It's unusual to find two such opposite publications in a state as small as New Hampshire.  For years, the Leader has reprinted the NRA's Armed Citizen series of accounts of armed citizens preventing crime.  The Citizen, in contrast, regards private gun ownership of any form as the embodiment of all evil, second only to profits rewarding business owners instead of enriching employees.

It probably never occurred to the publishers that their article "At the State House, the arts prevailed" explained exploding government budgets far better than many learned articles on the subject.  It opened:

On Wednesday, the New Hampshire House resoundingly turned back two efforts that would have turned New Hampshire into one of the most art-unfriendly states in the union.

One bill, HB 1285, would have repealed the Percent for Art (State Art Fund) program - which sets aside money in major state construction projects for artwork in state-owned buildings. By a vote of 210-76 it was sent to interim study. The other bill, HB 1274, as originally written, would have eliminated the Department of Cultural Resources. All of that language was stripped away at the committee level and the wholly revised version passed 253-40.

One might wonder why it would be appropriate for a law to require that a percentage of tax money allocated for construction to be spent on art.  Why should my taxes be used to pay for "art" in state office buildings?

Come to think of it, why was my tax money used to build the Kennedy Center in Washington, DC?  Why should the government pay to build a theater?  If a theater would be economically viable, wouldn't private interests build one?  The fact that there was no theater in Washington DC until our elected officials put up public money shows that the "arts" aren't economically viable.

How Logs Are Rolled

Both of these attempts to kill laws which turn artists into yet another favored group who receive handouts from the taxpayers seemed to have a good chance of passing back in January when they were introduced.  The article explained the process by which "On both sides of the aisles, legislators came to the point where they talked about the value of art and agreed, to varying degrees, that there is in fact a role for government funding of the arts."

110 people attended a public hearing on the bill on Jan. 20:

We had Portsmouth and Rochester business leaders and statewide craftspeople who make their living from their art and pump millions of dollars each year into the state's economy. We had teachers and economic development officials.

For the press, this event was invisible.  [emphasis added]

Recipients of government spending attended the hearing while the taxpaying public, not having been told about the meeting and having to go to work instead, stayed away.  Hearing only one side, the legislators decided not to kill the subsidy.

Note the writer's use of "We had."  In the absence of publicity, spending advocates were free to choose whom to bring to the meeting.  Why should we be surprised that this one-sided argument swayed legislators into leaving the spending program in place?

The most revealing paragraph came at the end:

(Connie Rosemont of Concord is president of New Hampshire Citizens for the Arts, a nonpartisan group that advocates for public funding for the arts.)  [emphasis added]

Ms. Rosemont's organization is nonpartisan because it's neither pro-Republican nor pro-Democrat, it's pro-spending.  Organizations such as this measure success in a simple way - the more tax money they persuade lawmakers to spend on their behalf, the better.  No wonder an organization of "craftspeople who make their living from their art" lined up to speak in favor!

How It's 'Sposed To Be

There was a time when people who wanted something either had to earn the money to pay for it or persuade wealthy donors to fund their projects.  That's how the Yawkey Center was built at Massachusetts General Hospital - the Yawkey family put up most of the money voluntarily.  The original Yankee Stadium in Brooklyn was built with private money as were the Boston Symphony and the Gartner Museum.

Times have changed.  Sports teams persuade cities to fund new places for millionaires to earn profits for the billionaires who own the teams.  Artists who'd rather not starve even though they can't sell their work try to persuade legislators to fund their projects.

So long as voters continue to elect politicians who're willing to spend on nonessentials, we'll continue going broke - until all of a sudden, we actually do.

When something can no longer go on, it won't; government spending simply isn't sustainable.  There are two possible cures: the hard way, which means beating back all the interest groups who've forced their snouts into the public trough, and the very hard way, via economic collapse which will come when taxpayers are tapped out and lenders won't lend any more.