The starting point for the discussion of public policy in the United States and the 50 states today is the looming insolvency of the federal government at some point in the next 20 to 25 years. By “insolvency,” I mean we are heading toward an Argentina-style financial crisis that will lead to the radical truncation of the size of the federal government, the collapse of the American welfare state, a retrenchment of the American empire and a devolution of power to the states.
There are some in the blogosphere who discuss such talk as scare mongering on the part of partisans unalterably opposed to the Obama health care plan. My response to them is, fools, you are short-sighted beyond belief. Instead of agitating for an expansion of the welfare state and acceleration of deficit spending, you should devote your energy to avoiding the fiscal cataclysm that will reduce America’s social safety net to tatters and cause incalculable pain for those who rely upon it.
But the blind defenders of fiscal Business As Usual will be swayed by nothing other than the reality of the insolvency itself, and I do not write for them. Nor do I write in the hope of forestalling the disaster, for the trajectory of federal spending and deficits has been set and is politically irreversible. I write for the practitioners of government at the state and local levels, for they are the ones to whom society will turn when the federal government fails.
The most important thing that the commonwealth of Virginia can do over the next two decades is prepare itself for the day the federal spigot runs dry: when Medicare, Medicaid and Social Security payments are drastically curtailed, when the flow of military dollars into the state can no longer be supported, when discretionary federal spending on everything from schools and housing to earmarks and corporate welfare are not merely hacked to the bone but amputated outright.
Those are not topics that our two gubernatorial candidates, our congressmen nor anyone else in a position of power wish to talk about. Therefore, the job falls to the citizenry. We can see the hurricane coming. We have a choice. Like our political leaders, we can sit on the front deck of our beach house, pop open a cool one and remark upon the rising wind and waves. Or we can start nailing the plywood over our windows and moving the furniture to the upper floors.
In the next post, I will explain how unsustainable U.S. fiscal policies will inevitably bankrupt the federal government and why, when things unravel, they will do so with surprising speed.