Who else could I be talking about but Thomas Sowell. I learned a long time ago that when Thomas Sowell speaks it’s a good idea to pay close attention. In his latest article at Human Events, Sowell teaches us about the high cost of political rhetoric when it wins-out over responsible politics.
In this article, Sowell talks about the political rhetoric that emanates from budget crisis. He starts out referring to the most famous budget crisis of New York City in the 1970s when President Gerald Ford initially said no to a bailout but latter caved-in and did bailout NYC. He thinks Ford made a serious error that creates a president that shouldn’t be repeated. Here is why he thinks allowing states or cities to go bankrupt:
Bankruptcy conveys the plain facts that political rhetoric tries to conceal. It tells people who depended on the bankrupt government that they can no longer depend on that bankrupt government. It tells the voters who elected that bankrupt government, with its big spending promises, that they made a bad mistake that they would be wise to avoid making again in the future.
Legally, bankruptcy wipes out commitments made to public sector unions, whose extravagant pay and pension contracts are bleeding municipal and state governments dry.
Now I like the sound of that. This is exactly what California, Illinois, and New York ought to be planning. Sowell being Sowell anticipates the political rhetoric that would be forthcoming . The politicians and the media would be shouting from the roof tops that “the poor will be starving in the streets”. Of course, Sowell has a ready response:
But the amount of money it would take to keep the poor from starving in the streets is chump change compared to how much it would take to keep on feeding unions, subsidized businesses and other special interests who are robbing the taxpayers blind.
Letting armies of government employees retire in their fifties, to live for decades on pensions larger than they were making when they were working, costs a lot more than keeping the poor from starving in the streets.
Bankruptcy says: “We just don’t have the money.” End of discussion. Bailouts say: “Give the taxpayers a little rhetoric, and a little smoke and mirrors with the book-keeping, and we can keep the party rolling.”
But Sowell knows the rhetoric won’t stop there
One of the political games that is played during a budget crisis is to cut back on essential services like police departments and fire departments, in order to blackmail the public into accepting higher tax rates. Often, a lot more money could be saved by getting rid of runaway pension contracts with public sector unions.
Bankruptcy can do that. Bailouts cannot.
Sounds all too familiar, doesn’t it? Sowell goes on to tell us why politicians at every level of government are so prone to go along with outrageous pension plans for government employees
Politicians get the votes of those to whom pensions are promised, without losing the votes of taxpayers– and they leave it up to future government officials to figure out what to do when the money is just not there. It is a sure-fire guarantee of political irresponsibility.
Obama is already asking for $6 billion to bail out Puerto Rico so we can be sure that, if California or Illinois or New york come to the end of their rope, he is going to want to bail them out. Armed with the arguments Thomas Sowell has given us we will be ready to join the battle.
Do you think we could convince Thomas Sowell to run for President in 2012? What a pleasant thought.