To judge from the laments of angry taxpayers and hard-pressed politicians, American government these days is in something of a jam. Even though the public's demand for services is going up, government's money supply is going down, and this is putting America's federal system under considerable stress.
In many parts of the country, elected officials at all levels of government are being forced to make savage budget cuts, merely to keep things in balance. When mayors or governors dare to talk of tax increases, they are rousingly shouted down. In Washington, every spending and taxing decision is clouded by an enormous budget deficit. Everywhere, government is finding it harder and harder to obtain the resources to take care of basic responsibilities.In some areas, such as the Northeast, this pinch is being blamed in part on recession. As the region prospered in the 1980s, governments tended to take an expansive view of their resources and duties; but a cooling economy brought shrinking tax revenues, and the region's governors and legislators are still scrambling to adjust.
I am not convinced, however, that the problem is merely regional or merely a product of the current recession. We've had recessions before, after all, and I recall nothing to match, for severity, the present strain on state and city budgets. Instead, it seems altogether possible that today's acute public-budget crises reflect a basic dislocation in public finance that is national in extent and possibly systemic in nature.
Put more simply, I would suggest: Most Americans want more from government than they are willing to pay for; and our federal structure is badly out of phase with both the available revenue sources and the list of unmet public responsibilities.
At first blush, this may sound absurd. America's buoyant economy is still churning along at a rate of more than $2 trillion a year, after all, and most adult Americans have jobs, decent homes and plenty to eat. Many, of course, enjoy much more of the good life. Wall Street is smiling.
Look at the negative side of the ledger, however, and the evidence of dislocation gets troubling. There are the painful and costly problems of the urban poor (so routinely ignored) and neglected maintenance - highways, schools, railroads, parks, housing - amounting to hundreds of billions of dollars. Some critical items on the back-burner agenda, such as universal medical care, keep getting ducked because of their price tags. Less remarked upon (because less visible) are the staggering price tags inherited from Washington blunders of the 1980s (notably the savings and loan debacle), the federal government's rapidly climbing cost of borrowing to keep its bills paid, and the cost of servicing a mountainous foreign debt.
There is, of course, more. Costs of basic government operations keep climbing, along with everything else. Interest groups keep succeeding in wangling commitments for help - much of it worthwhile, but all of it costing something - to address their particular concerns. Public employees, protected by civil service and unions, keep personnel budgets largely immune to cost-cutting pressures.
When evaluated together, these elements point to long-term trouble. It's small wonder that governors in the Northeast are feeling besieged, for their budgets are wildly out of balance and, as the weatherman used to say, no relief is in sight. As they slash away at spending, furious taxpayers vent rage at even modest proposals for tax increases to help make ends meet.
Moreover, even if the recession should ease up soon, enormous deficits may cramp the ability of these states to meet basic functions for years to come. And whoever dares to suggest radical remedies, on either the taxing or the spending side, is roundly hooted down as reckless and irresponsible.
There is far more at work in the bleak reaches of public finance these days than merely the inhalations and exhalations of the business cycle. What we are seeing - still on the horizon, but coming closer - are a sheaf of due bills for an indulgent way of economic life that, until now, has been largely cost-free. That is, Americans for years found themselves able to borrow freely and consume freely, postpone prudent decisions on savings and investment, ignore nagging social ills and embrace Reagan's tax cuts under the delusion that they represented sound fiscal policy.
No nation, not even the richest, can expect to stay healthy indefinitely with its largest cities going broke, its populous states stumbling in financial disarray and its national government unable to deal honestly with long-term obligations. But since this is an unpalatable reality to confront, most of our elected leaders seem content to drift along, hoping for brighter days around the corner.