The GAO's Smooth Descending Line

A 50 year fiscal hangover for state and local governments is what is being predicted by the GAO, (Government Accountability Office), as reported by Watchdog.org’s Eric Boehm. And the solution,as always, is some mix of tax increases and spending cuts. But that smooth, decades long declining slope is just a prediction. The actual data up to 2014 in the GAO-produced graph is much more interesting than the predictions, with sharp changes in the graph when policy and/or economic conditions change. That can give you cause for hope or fear, depending on your views of future policy and future economic conditions in America and how they might impact local and state governments. But when predicting, the easiest, and the most reasonable thing to do is to assume away policy changes and merely show how local and state finances will evolve given some broad assumptions, mainly assuming that things will roughly stay the same as they are at the current time.


Is there a tendency to ignore local and state finances when criticizing government spending? Is it easier to shine a harsh light on distant D.C. and give your local representatives more leeway because the money they (over)spend is more visible in your local community? In a fascinating paper on political competition and spending at the local level in Brazil, yes Brazil, University of Colorado's Boulding and Brown find evidence that suggests that more competition at the political level leads to less public spending. The key is control of financial resources to engineer incumbent re-elections. Less cash, less incumbents winning another term, and less social spending. Shocking isn't it? Are these findings robust enough to be relevant to local politics in America? It would certainly seem to be the case that the logic of re-election followed by goodies for voters is alive and well at the state and local level across the country. Spin and subsidies, entertainment and entitlements, getting your message out so you can get the out the money. The alliterations flow as easily as crisp bills off a printing press.

The question then becomes how to introduce more competition - in the sense of less incumbents re-elected - into local politics. Aside from term limits, a third party seems to be the obvious answer. Or more specifically, Tea Party Republicans not towing the establishment GOP line on matters like local spending and taxes. The GOP establishment will state that that would ensure Democratic victories and further increases in both taxes and spending. And over the short term - one or two electoral cycles - they are perhaps right. But unless the status quo is seriously challenged, and the same harsh light is brought to bear on local and state spending as on federal spending, that smooth descending line in the GAO predictions will have a better chance of becoming a reality rather than a forecast.

Posted by Keeley at December 31, 2014 8:39 PM
Comments
Comment #387047

In states with Democratic legislative supermajorities, such as CA, they are now running a $4 billion surplus.

In states with Republican legislative supermajorities, such as KS, they are now running $280 million budget deficit, and projecting a deficit of $436 billion due to tax cuts. KS is Attempting to cover some of the shortfall by slashing funding for education.

Same problem in Wisconsin. They are projecting a $2.2 billion deficit for 2015-17, due to tax cuts for the rich & corporations, and once again, the plan is to pay for it by cutting funds for education, job training, and so on.

Go Scott Walker!

Posted by: phx8 at January 3, 2015 9:56 PM
Comment #387052

Is this the way a blog ends, not with a bang, but with a whimper?

Rocky

Posted by: Rocky Marks at January 5, 2015 9:22 AM
Comment #387053

Rocky,

I think is is quite premature to call this blog over. Given the holiday season I am sure many contributors have spent the last few weeks focusing on their friends and families instead of commenting.

Posted by: Warren Porter at January 5, 2015 12:42 PM
Comment #387054

Warren,

While I admire and applaud your positive attitude, in my ten years here I have seen a steady decline in both the quality, and the quantity of the posts. here.
Most of the “firebrands” are gone, and I can count on less than two hands the number of “regulars”, when at one time there were dozens here, and less than one hand the number of quality posters that remain.


“A pessimist is what a optimist calls a pragmatist.”

Rocky

Posted by: Rocky Marks at January 5, 2015 11:08 PM
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