How do you answer that? Of course most of us would answer that our family, our faith, our jobs, our hobbies are just some of the things important to us. But collectively, what do we as communities, states, and even a nation truly hold dear?
I would argue that the Great Recession that we are still trying to climb out of has affected how most of us answer the question. Sure our families, our friends, and definitely our faith are all very important to us. But given the lasting effects of this prolonged and deep recession, I think most of us have and will continue to reevaluate our priorities.
Amazingly in the political arena, the voting electorate seems to have done a complete turn-around when it comes to government spending. Just two years ago, President Obama and the Democratic Party controlled the entire federal government. Fast-forward two years and the Republicans win the US House of Representatives, a large number of Governorships, and a majority of state legislators. Interestingly the same independent voters who sided with the Democrats in 2008 over economic concerns, flipped over to the Republicans in 2010.
The battle cry has largely been over rampant government spending. This backlash has been aimed at both legitimate spending like education and national defense and the frivolous pork projects sought by insensitive and self-serving politicians. This clouding of the issues or broad-brush indictment of all government activity and spending could be detrimental in the long-term.
Consider the battle occurring in Wisconsin. Who is right? The Governor and the elected majority argue they are simply doing what the voters told them to do when they elected them – reduce the size of state government and the associated spending. The public employees argue that the Governor and the elected majority are more interested in eliminating or severely negatively impacting the unions.
This same tug of war has occurred and continues to occur in many other parts of the country. The State of Georgia has every bit as big a fiscal problem as Wisconsin. Fortunately the union impact is not as large as in Wisconsin, but nonetheless all employees working for the State and most local governments have endured pay cuts, furloughs, benefit reductions, etc. Interestingly in Wisconsin and in New Jersey, the Unions would prefer the state governments lay people off than pursue other alternative cost-saving options.
But the bigger picture here is the potentially lasting effect these issues could have on future public policy. Because most of us have been adversely affected by this recession to some degree or other, we have become even more concerned regarding fiscal affairs than we were prior to the recession. Special Purpose Local Option Sales Taxes (SPLOSTs) are a good example of a typically preferred revenue generating instrument that is now under attack. And new ones will certainly be harder to pass than they were in better economic times.
Unfortunately many of our elected officials have created the environment we now find ourselves in. Given a fourteen trillion dollar debt at the national level, huge deficits in a majority of the state governments around the country, and challenging budget issues at the local level, I think most of us are in fiscal shock. While worrying daily about our own fiscal assuredness, we are bombarded with negative news concerning the budget gaps, the deficits, and the shaky financial position of government at all levels.
Where do we go from here? All of us must come to the conclusion that our country and our standard of living have been reset. Our home values have decreased and will appreciate in value much more slowly going forward. Pensions and other employer provided retirement plans are a thing of the past. Benefits like health insurance will continue to become more and more expensive and absorb a larger share of our discretionary income.
Our governments must become leaner. Our Federal government must be reduced in size and scope (and only do what it is constitutionally allowed to do). Entitlement programs like Social Security and Medicare have to be reformed in order that they remain viable. Our National Defense budget has to be on the table for discussion and reductions must be made. Foreign aid also must be trimmed. It is unfathomable to me that we provide any country foreign aid when we are borrowing money from others to do so.
It seems to me that the world we know has changed forever. We have come through another of those cataclysmic periods that truly changed the trajectory of life as we know it. The big question facing us now is – what will we do with what we know? Will we become more conservative in our lifestyle choices (homes, cars, etc.)? Will we hold our elected officials to a higher standard? Will we work harder in collaborating for the collective good?
Although it is too early to tell, I am optimistic that in the end the greatness of our nation will once again rise to the occasion. We will once again prosper and remain the envy of the world.