Financial Armageddon

In our fine state of Maryland, the governor, like many others around the country, is anxiously awaiting the first checks to arrive from the Federal Government. Like most states, Maryland is experiencing a budget shortfall due to the contracting economy leading to less revenue just as expenses are going up. For those states that do not have a “rainy day fund”, this poses a severe problem. Unlike the Federal Government, the states cannot just print money when they run out, they are supposed to balance their budgets. Politicians, however, are the same everywhere. If there is a dollar in tax revenue, it must be spent on something because that spending will create goodwill`among the electorate, which is good for reelection. So states all over the union, beginning with the billions and billions California is in the hole, are in dire straits.
As we know, there are two choices for government when ends don’t meet. They can raise taxes or cut services. They prefer not to do either. The Federal Government, on the other hand, has two other options. It can print money or borrow it. It has been doing a lot of both lately. That is getting us in enough trouble as it is and the repercussions of our profligate spending will be with us for decades to come. If, however, the state budgets are supplemented by the Federal Government, that is a whole new can of worms. The states can go on new spending sprees just like the Federal Government because their budgets will no longer have to reflect fiscal reality. Congressmen will love it because they can point out how much federal money they brought home to supplement their state budgets. The Federal Government will love it because it will give them control over the states, because no money comes from the government without strings attached. The budget for the federal Government will mushroom even more but they will just continue to print and borrow. Everyone will be happy.
That is until the whole house of cards comes crashing down. If history has taught us anything it is that one cannot deny common sense forever and irresponsible behavior will have consequences, usually in direct proportion to how long and how vehemently such behavior has been engaged in. We have been building up debt and obligation at a steadily increasing rate and with all this stimulus, our level of irresponsibility has gone through the roof. One cannot print and borrow money indefinitely. Printing will eventually lead to hyperinflation and the devaluing of the currency. Excessive borrowing leads to bad credit and eventually the pool of lenders dries up. When that happens, it all comes crashing down. If we thought the banking and mortgage collapse was bad, just think what will happen when the Federal Government collapses. So many people are intimately dependent on it and such dependency will have disastrous consequences and may literally lead to the death of thousands of Americans. By bringing the states into this insanity, we are just hastening the collapse and ensuring that state and local government fail as well. We have got to say no to this level of spending. You can’t get something for nothing and sooner or later the gravy train will come to an end.