Friday, February 22, 2008

Down the Tubes


The slow economy is hurting state tax revenues around the country. But look on the bright side: You could live in New Jersey, where decades of tax and spend politics is reaching its logical conclusion.

"We have a serious structural financial problem," the state's liberal Democratic Governor Jon Corzine told us on a recent visit. "You better address these problems or you will put yourself in a 1970s-style New York City situation, where you get a control board telling you what to do." Mr. Corzine is promoting his own solution, but he's also tacitly admitting that the state's politicians have been sucking the place dry for decades. If you want to know where a state dominated by public-employee unions ends up, Trenton is it.

Mr. Corzine spent 25 years at Goldman Sachs and is fluent with numbers, most of them harrowing if you're a New Jersey taxpayer. In 1990 the state was $3 billion in debt. Borrowing has since grown at a compound annual rate of about 13%, and now the state is $32 billion in the red. Throw in unfunded pensions and health benefits for retirees, and that number swells to $113 billion, or $3,400 for every man, woman and child in the state. That's three times per capita higher than the national average, making New Jersey the nation's fourth-most indebted state.

Sound familiar? I'm not just talking about our state and our misguided legislators that have their heads so far up their backside that they can't see the last thing Minnesotans need is expanded transit capacity, higher gas taxes, auto license fees and a statewide increase in sales taxes.

I am talking about our national addiction to tax and spend policies.

Down the tubes. That is where our nation's finances have gone for decades and if smart people like Governor Pawlenty have it right, we have only a few years before our national day of reckoning. Ron Paul may be a little off his rocker some times but a lot of what he has been saying of late is grounded in truth. We can't afford it so it is (it being Iraq, Universal Healthcare, etc.) a moot point.

Our nation's financial resources can no longer be held hostage by liberal (or RINO) policies. It isn't a matter of right or wrong anymore, it's a simple matter of mathematics. We can no longer afford many of the policies, both domestic and foreign, that we have been pursuing to the detriment of our nation's future.

New Jersey has had to resort to drastic measures to stay solvent...the US is on the same path.

To pay off the old debt, he's literally proposing to mortgage the state's best cash-producing assets -- its roads. Under his plan, the state would create a new quasi-independent agency that would borrow about $38 billion. The bonds would be financed through steep, inflation-adjusted toll road increases -- 50% each in 2010, 2014, 2018 and 2022, followed by an increase every four years based on the consumer price index.

There are many issues at the front during this Presidential campaign but I would assert that our most pressing issue is fiscal in nature. Sure signs such as the continued devaluation of our dollar and a soaring national debt have been evident for years. Our economy has been propped up by cheap money and recent mortgage defaults and dropping real estate values could be just the tip of the iceberg if we don't make a course correction soon.

China doesn't need a nuclear bomb to destroy us right now. All they have to do is dump our debt.

Our freedoms, our sovereignty, our national security and our very way of life will dramatically change in ways we can't imagine if we don't halt our fiscal irresponsibility as a country. We will destroy our economy and throw ourselves into a national disaster that our enemies could have only hoped to accomplish through other means as our economy implodes, taking others' with it.

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