Bacon's Rebellion

Democracy Thrives in Sunlight

Do You Believe Me Yet?

—

by

James A. Bacon
in

For months now, I have been harping on the theme that Virginia faces a challenging fiscal future and that we need to start getting our financial affairs in order now. Two more straws in the wind…

The combined unfunded liabilities of the Virginia Retirement System and other state-supported pension plans adds up to $17.6 billion, reports the Joint Legislative Audit and Review Commission. (Read the Times-Dispatch article here.) Contributions by state government and municipalities will have to increase significantly in the next budget biennium, said Tracey Smith, a JLARC analyst in a legislative hearing yesterday.

Meanwhile, Virginia has borrowed $346 million from the federal government since October 2009 to pay unemployment benefits, and is projected to need another $613 million by April 2013. The money will have to come from the General Fund because the state’s unemployment trust fund is insolvent. (Read the Times-Dispatch reporting here.)

Now, go back and re-read “A Glimpse of Boomergeddon in Virginia’s Future,” which cites a Senate Finance Committee analysis to the effect that Virginia will pay $594 million in interest payments in fiscal 2012 to finance its ever-growing debt. (It’s a short post, so you have no excuse for not reading it.)

Gov. Bob McDonnell wants to borrow nearly $4 billion to fund road transportation projects? And he calls himself a fiscal conservative?

Share this article

ADVERTISEMENT

(comments below)

ADVERTISEMENT

(comments below)

Comments

7 responses to “Do You Believe Me Yet?”

  1. Hydra Avatar
    Hydra

    Boo hoo the world is ending the sky is falling.

    The Census Bureau reported today that retail sales increased for the fifth straight month and reached $378.7 billion in November, the second highest monthly level in history (not adjusted for inflation) and the highest level since $379.9 billion in November 2007, the month before the recession started ….

    Quick, tell McDonnell to borrow as much as he can, before people find out the recession is over.

  2. Hydra Avatar
    Hydra

    This is from Tim Haab, over at environmental economics, and it explains perfectly why I am an optimist about our future energy (and therfore economic) situation, as opposed to Jim Bacon and EMR.

    I don't care when oil (OR COAL) peaks, I care when we run out, which we won't because, as production declines, prices WILL rise. As prices rise, people WILL figure out alternatives. They might not be happy alternatives. They might not be as productive alternatives. They might not support the same lifestyle to which we are accustomed. But there WILL be alternatives, forced by higher prices–and no other mechanism is that powerful.

    See, I'm an optimist.

    It's the end of the world as we know it……"

  3. James A. Bacon Avatar
    James A. Bacon

    Ray, you and I don't disagree on that point. When fossil fuels get in shorter supply, prices will rise. When prices rises, it becomes economical to extract deposits that were not economical before. It also becomes economical to deplay subsitutes, and it pays to develop and adopt new technologies. We will adapt, as long as we let market mechanisms work.

    But, fossil fuel prices *will* move higher, and the transition could be painful.

    The transition most certainly *will* be more painful if, because we deny the reality of what is happening, we perpetuate Business As Usual policies predicated on cheap energy and refuse to allow our human settlement patterns to evolve in response to the higher prices.

  4. Larry G Avatar
    Larry G

    I thought conservatives like McDonnell were opposed to extending unemployment benefits that we could not pay for?

    How does he justify the State of Va borrowing this money that has to be paid back?

    more right wing hypocrisy.

  5. Hydra Avatar
    Hydra

    refuse to allow our human settlement patterns to evolve in response to the higher prices.

    ==================================

    Refusing to allow them to evolve and forcing them to evolve in a certain way are two different things.

    The larger point is that the economy is not going to stop. Not because of debt, and not because of high energy prices. We are not going to heve econogeddon. Whether we wind up trading in dollars or ducats those that own the means of production will be better off than those that dont.

  6. Hydra Avatar
    Hydra

    Can anybody remember when the times were not hard and money not scarce?

    Ralph Waldo Emerson

  7. Hydra Avatar
    Hydra

    "Property rights can be defined in many ways. While there will be differences in people’s judgments about the justice, efficacy, or propriety of one or the other method, any of them could be present in a free market. An essential public policy task is determining how to define and enforce property rights such that individuals will autonomously behave in ways that generate broadly positive outcomes. Rigid state control over resource use is often unnecessary.

    The period before heavy-handed federal and state environmental regulation, with all the associated environmental damage, is a testament to the importance of institutions in influencing outcomes rather than an indictment of laissez-faire. During this period, many resources could not be held as private property. Bison were shot nearly to extinction in part because individuals could not gain legal title to them, making bison herds nothing more than liabilities for ranchers, railroads, and other property owners. The Cuyahoga River caught fire after exceptional pollution, itself the result of a dearth of individuals with title to water use and fishing rights.

    It is true that in many ways state and federal environmental laws have improved these sorts of situations. It remains to be seen whether the task could have been left to markets with better-defined and enforced property rights, and whether those solutions might be superior."

    Read more: http://dailycaller.com/2010/12/14/practicing-free-market-environmentalism/#ixzz187SpGaXb

    Larry will think this is bizarrte.

Leave a Reply

Read More