Results 1 to 15 of 15

Thread: State Debt Ceiling, a Proposal

  1. #1
    Patron The Black Ghost's Avatar
    Join Date
    24 Apr 07
    Location
    Citizen of the World
    Posts
    239

    State Debt Ceiling, a Proposal

    I'm writing a short essay (directed towards the general assembly) for a state and local government class on why the state of Illinois needs a fixed debt ceiling, something I suspect people here might be more in favor of. I've done a lot of research but frankly its hard to find good sources and information.

    If anyone would be willing to skim/glance over it, I would like to know of any logical or informational errors that I may be making before it is turned in. Hopefully the arguement has some merit to it. Thanks

    ------------------------------------

    Members of the General Assembly,

    The single largest problem currently facing our state is undoubtedly our budget problem and the massive pile of debt that we have accumulated. Part of our constitution sets out the requirement of a balanced budget, and borrowing excessive amounts of money has been the historical way of working around the issue. This solution of continuous borrowing, however, is only temporary and is ultimately unsustainable. The threat to our state services is as great now as it has ever been in the past and the issue of fixing our economy should be nonpartisan. The first step in this process is the creation of a fixed debt limit to keep uncontrolled spending in check. Not only will this help to reduce our debt, it will create greater budget transparency, and help us focus on a prioritized use of money.

    Illinois today is facing one of the worst financial crises in the history of the state. We are approximately 122 Billion dollars in debt, a number which is growing at this very moment. Where is this debt coming from? The answer comes easily from a quick glance at the statistics: we are currently spending 33 Billion dollars more than we are generating in revenue. A look back at our financial history shows a consistent trend of spending more money than we make. There is a long-standing tradition of politics behind the continuous increase in state debt, but regardless of the reasons for our past decisions, the sobering truth is that we can no longer continue this policy.
    The problem of unchecked spending and borrowing is not new. In fact, it was around 1855 after “the ravage of unchecked debt spending” when the first debt limits were added to state constitutions. Three-quarters of states have a form of debt ceiling, which once included Illinois. Before adopting our most recent constitution in 1970, Illinois had provisions for a debt limit built into its founding document. These limitations were eliminated for the purpose of faster growth through greater borrowing. This strategy may have worked in the past, but today we are feeling the harrowing effects of unchecked debt. Yes, it is true that a supermajority is needed to incur long-term debt, but obviously this check is not enough because it hasn’t stopped us from continuously adding on new debt. Now our state budget is among the worst in the country and our debt is wildly out of control.

    A clear debt ceiling is the solution we need to begin fixing this problem. More than just a limit for borrowing, it should be a warning to the government and Illinois taxpayers when we are spending too much. A responsible, efficient, and well-managed state should be able to manage its services and programs without borrowing money. That doesn’t mean that there isn’t a time and place to borrow. However, borrowing should be the exception used when we really need it; it must not be the rule, as it is today. The idea of a debt limit is not always a popular idea, but limiting the amount of debt our state can take on is the first step in minimizing our current debt and eliminating it. We would also need stringent provisions in place so that raising this limit will not be easy. Other states like Washington use a public referendum method to approve increases in debt limit after they have passed through the legislature. Some form of referendum would be invaluable as a check against raising the debt ceiling if it were brought back. The cost and challenge of passing a bill through public referendum would in itself assure that any suggestion of raising the debt limit would only be used when absolutely necessary.

    A limitation on the amount of debt we take on will also mean greater budget transparency in the most basic sense. Both the legislature and the public will be better able to gauge the amount of money generated through revenue versus the amount of money being spent with a debt limit. A reduced ability to borrow will force this state to be more efficient with the funds that we do have and prioritize our needs based on necessity. With a low debt ceiling, our combined tax rates will be closer to the actual cost of running government services. This means that we will be faced with having to make decisions between higher taxes or fewer services. We will no longer be able to borrow endlessly to pay for the services of our state and this will force us to address budget issues as soon as they arise, not ten years down the road. This will mean making difficult choices, both for you and the general public. If we are not generating enough revenue, either we need to raise more money for our programs or cut spending. Raising taxes and cutting spending are widely disliked, but borrowing money to float a sinking ship is not going to solve any problem, it will only prolong the crisis. Even if we are able to fix our current problem through a reduction in spending, we must put restrictions in place to make sure that we avoid making the same mistakes in the future.

    Many people blame the current crisis on our out-of-control pension and Medicaid spending. However, this is only a part of the larger problem. The real problem is that our budget crisis reached such a magnitude without being properly addressed. If a debt limit had been in place, we would have began working on solving these issues when they were at a much more manageable level. Instead, we decided to take on more debt through borrowing to pay for these programs. This created the illusion of a balanced budget, and now years later we are facing the same problem except with a much larger pile of debt. Because this crisis of debt and spending has been allowed to grow to such a high level, the shock of change will be much more devastating when we fix it now than if we had fixed it in the past. The issue of pensions, Medicaid, and other big-spending programs are not even worth discussing until we can agree to stop borrowing money and putting our state further into debt.

    Opponents of debt ceilings—even in our Federal Government—have often cited the fact that the existence of a debt ceiling often does nothing to restrain actual spending and is nothing more than a farce. However, a properly written law restricting debt should have provisions which do not allow loopholes and make raising that limit a difficult option. Others have argued that debt must be incurred because the government has to respect its financial and service obligations regardless of the amount of revenue generated. This, again, is not a real solution. Under no circumstances can increased debt indefinitely support the programs of our state. If we are spending more than we are bringing in, that should be warning that some drastic action needs to be taken. In emergencies or special circumstances debt may be incurred, but a limitation on that amount will better guarantee that it does not become a habit. A properly running legislature should be able to solve a budget imbalance without taking on large amounts of debt.

    We are facing a clear crisis that must be resolved immediately. A little trimming may work in the short term, but it is not a permanent solution. We must begin to shoulder the burden of the costs of running our state. Illinois needs to adopt a low, fixed debt ceiling with restrictions in place to keep it from being easily raised. This will mean making tough choices and decisions, some of which may not appear to be readily popular. A debt limit is something we need to restrict ourselves from overreaching our spending capabilities. It will help us prioritize our use of funds and focus our attention on budget shortfalls as soon as they arise. Though a debt limit might not seem like the most politically practical course of action, the long-term affects will be very helpful for our state. Debt and overspending must not continue to be a partisan issue. Both parties must agree that maintaining a transparent, balanced budget with no strings attached is the best way to move forward. A fixed limit for our debt will help put us on that track and allow us to focus on the real spending issues at hand. Borrowing money to postpone dialogue on reduced spending or higher taxes is not a long-term solution. We must act now for the future of this state, to ensure greater competence in our budgeting and set our state back on the right course.
    The greatest weapon is the truth

  2. #2
    Official Thread Jacker Senior Contributor gunnut's Avatar
    Join Date
    27 Jan 06
    Location
    DPRK, Demokratik People's Republik of Kalifornia
    Posts
    23,818
    Won't work. California has a "balanced budget amendment" and our legislature routinely uses smoke and mirror to "balance" the budget.

    These are lawyers or people with lawyers you're dealing with. Making a contract with them is like making a contract with the devil. He (they) will find a way to screw you over.
    "Only Nixon can go to China." -- Old Vulcan proverb.

  3. #3
    Patron The Black Ghost's Avatar
    Join Date
    24 Apr 07
    Location
    Citizen of the World
    Posts
    239
    Right, but assuming this was a rational world with perfectly rational people does the arguement work?
    The greatest weapon is the truth

  4. #4
    Senior Contributor Doktor's Avatar
    Join Date
    25 Aug 08
    Location
    Skopje, Macedonia
    Posts
    13,668
    That's oxymoron. Rational world wont need rational politicians.
    No such thing as a good tax - Churchill

    To make mistakes is human. To blame someone else for your mistake, is strategic.

  5. #5
    Patron The Black Ghost's Avatar
    Join Date
    24 Apr 07
    Location
    Citizen of the World
    Posts
    239
    :( Very well
    The greatest weapon is the truth

  6. #6
    Senior Contributor Doktor's Avatar
    Join Date
    25 Aug 08
    Location
    Skopje, Macedonia
    Posts
    13,668
    Or any politicians at all. To be clear on the matter
    No such thing as a good tax - Churchill

    To make mistakes is human. To blame someone else for your mistake, is strategic.

  7. #7
    Patron The Black Ghost's Avatar
    Join Date
    24 Apr 07
    Location
    Citizen of the World
    Posts
    239
    Quote Originally Posted by Doktor View Post
    Or any politicians at all. To be clear on the matter
    There would still need to be representatives of different groups in society, so no, politicans would be needed in perfectly rational world. Things would simply be more efficient and have a lot less argueing.
    The greatest weapon is the truth

  8. #8
    Official Thread Jacker Senior Contributor gunnut's Avatar
    Join Date
    27 Jan 06
    Location
    DPRK, Demokratik People's Republik of Kalifornia
    Posts
    23,818
    Quote Originally Posted by The Black Ghost View Post
    :( Very well
    I admire your youthful exuberance. Unfortunately the government is the government. The same greed that makes capitalism work resides in the government as well. Except this time there is no market mechanism to punish the corrupt. That is why we conservatives do not trust the government.
    "Only Nixon can go to China." -- Old Vulcan proverb.

  9. #9
    Senior Contributor Doktor's Avatar
    Join Date
    25 Aug 08
    Location
    Skopje, Macedonia
    Posts
    13,668
    Quote Originally Posted by The Black Ghost View Post
    There would still need to be representatives of different groups in society, so no, politicans would be needed in perfectly rational world. Things would simply be more efficient and have a lot less argueing.
    Utopia is not rational, you know?
    No such thing as a good tax - Churchill

    To make mistakes is human. To blame someone else for your mistake, is strategic.

  10. #10
    Patron Nightowl's Avatar
    Join Date
    22 Mar 11
    Location
    Hilversum, the Netherlands
    Posts
    155
    establishing a debt ceiling that could in no way be raised or circumvented would be great if you desperately want to build a wall to have your back against.
    "Football is war."

    -Rinus Michels

  11. #11
    Patron The Black Ghost's Avatar
    Join Date
    24 Apr 07
    Location
    Citizen of the World
    Posts
    239
    Quote Originally Posted by gunnut View Post
    I admire your youthful exuberance. Unfortunately the government is the government. The same greed that makes capitalism work resides in the government as well. Except this time there is no market mechanism to punish the corrupt. That is why we conservatives do not trust the government.
    Its not as simple as that. The problem is usually a poorly constructed government system. A proper government has many checks against it, not just legal, but social as well. For instance, our marriage to the two-party system has chocked our country from the beginning. It forced partisan politics to work in a bipolar arena, and common sense gets tossed out the window so that one party can "win" and hold onto power for a few more years. A multiparty system by its very nature forces compromise and fosters attitudes of conciliation and working together to acheive goals.


    As for capitalism in the government--I think there should be a clear divorce between the two. The one small thing government has going for it is that it is not by nature out to make a profit off of you. A government bureaucracy provides services without worrying about profit, and therefore operates much more efficiently and fairly--contrary to what most people seem to believe. Obviously there is corruption, but I think even that gets blown out of proportion. I think it is the partisan politics that is most damaging in our country. The two parties have become institutions that are too powerful and entrenched. This is what breeds corruption.
    The greatest weapon is the truth

  12. #12
    Contributor
    Join Date
    16 Sep 10
    Posts
    303
    I thought everything was very well said. When you're ready to run for Office, I'll vote for you.

    And keep your pen name. It would be fun to see 'Black Ghost' on the ballot.
    Don't listen to me, I'm a wack job.

  13. #13
    Senior Contributor
    Join Date
    19 Feb 06
    Location
    Brooklyn, New York
    Posts
    1,527
    The only way this could work hypothetically is if you have a referendum in the state to ban it from issuing or borrowing debt for any period and any reason, and if the only way to overturn it would be to have the referendum overturn it.

    Theoretically it is possible to get that in some states if you have a ground roots campaign. Writing to people whom are bought and paid for doesn't make a change. Initiatives & Referendums through direct ballot proposals might be the way to go. Check for your state below.
    States with Initiative Process

    http://www.iandrinstitute.org/New%20...0Processes.pdf

    http://www.citizensincharge.org/states/illinois/news

    http://www.citizensincharge.org/blog...iative-process
    Illinois is technically an initiative state, but the process is very difficult. Illinois citizens do not have the ability to pass their own statutes or repeal statutes passed by the state legislature. The initiative process in Illinois is only advisory. You can read more about the history of I&R in Illinois here.
    (search for referendum process in Illioniois and try to go from local county out in its' implementation.)
    Last edited by cyppok; 29 Nov 11, at 16:49.
    Originally from Sochi, Russia.

  14. #14
    Official Thread Jacker Senior Contributor gunnut's Avatar
    Join Date
    27 Jan 06
    Location
    DPRK, Demokratik People's Republik of Kalifornia
    Posts
    23,818
    Quote Originally Posted by The Black Ghost View Post
    Its not as simple as that. The problem is usually a poorly constructed government system. A proper government has many checks against it, not just legal, but social as well.
    I agree. A government should have many checks against it. However, who writes the rules that check the government? The same greedy bastards called human beings. The same greedy bastards that run businesses.

    Quote Originally Posted by The Black Ghost View Post
    For instance, our marriage to the two-party system has chocked our country from the beginning. It forced partisan politics to work in a bipolar arena, and common sense gets tossed out the window so that one party can "win" and hold onto power for a few more years. A multiparty system by its very nature forces compromise and fosters attitudes of conciliation and working together to acheive goals.
    Our system is not perfect but our system is stable. We have a 2 party, winner take all type voting system. What you want is a multi party parliamentary system like that in many European governments. Their system gives everyone some kind of voice, but is less stable. Sometimes there is no clear majority so 2 minority parties of differing views could reach an agreement to form a bloc to run the government. Things could fall apart very quickly and a new round of election is called. Our elections are set for every 2 years. The president doesn't just declare the current congress to be a failure and call for a new vote.

    Quote Originally Posted by The Black Ghost View Post
    As for capitalism in the government--I think there should be a clear divorce between the two.
    You cannot divorce capitalism from government. The profit motive exists in human nature. As long as there are human beings in the government, there will be capitalism. Their votes are for sale. They spend our money to buy votes. They write rules to benefit their cronies and bosses. That's just human nature.

    Quote Originally Posted by The Black Ghost View Post
    The one small thing government has going for it is that it is not by nature out to make a profit off of you.
    Right. They just tax us. Unless those people work for free, they get our money one way or another. Whether we use the service or not, we have to pay. I never use the bus. Guess what, my tax money goes to run the city busses. Those who use the bus pay very little. Those who do not use the bus pay way more, proportionally.

    Quote Originally Posted by The Black Ghost View Post
    A government bureaucracy provides services without worrying about profit, and therefore operates much more efficiently and fairly--contrary to what most people seem to believe.
    Really? Ever try to get an answer from a government agency? Ever try to start a business? I suggest you try it first and then report back to us on how efficient the government is.

    Quote Originally Posted by The Black Ghost View Post
    Obviously there is corruption, but I think even that gets blown out of proportion. I think it is the partisan politics that is most damaging in our country. The two parties have become institutions that are too powerful and entrenched. This is what breeds corruption.
    There is corruption. That's just human nature. Our government may be corrupt, but it's still better than most.
    "Only Nixon can go to China." -- Old Vulcan proverb.

  15. #15
    Patron The Black Ghost's Avatar
    Join Date
    24 Apr 07
    Location
    Citizen of the World
    Posts
    239
    Quote Originally Posted by gunnut View Post
    I agree. A government should have many checks against it. However, who writes the rules that check the government? The same greedy bastards called human beings. The same greedy bastards that run businesses.
    I wont deny there is greed among government officials, but my point is that a properly constructed system should minimize the ability to capitalize off of government power--which we do not have. The constitution itself sets forth a huge number of limitations and checks...I would argue not enough...but today the Constitution is seen as the holy bible of American government. We dont often call the founding fathers greedy bastards (though Im guessing they werent much better than politicians today). If we made a constitution once with limits and checks, we can certainly add more checks today.

    Besides from government, business does not have any checks except the market. The market does not often judge or care about ethical practices, fairness, equality in the workplace, etc...and it certainly doesnt care about giving people the most for their money because the idea of a business is to operate at a profit. Even massive competition cannot change that fact--they all must operate at a profit.

    Our system is not perfect but our system is stable. We have a 2 party, winner take all type voting system. What you want is a multi party parliamentary system like that in many European governments. Their system gives everyone some kind of voice, but is less stable. Sometimes there is no clear majority so 2 minority parties of differing views could reach an agreement to form a bloc to run the government. Things could fall apart very quickly and a new round of election is called. Our elections are set for every 2 years. The president doesn't just declare the current congress to be a failure and call for a new vote.
    I think representation is much more important than stability. And contrary to what many people think--opposing parties can work together very well to form a government in a parliamentary system. Look at Germany in their 2005 elections--what is basically the equivalent of Republicans and Democrats forming a government together...and it actually worked. In America, there is no way the parties can work together because we have a bipolar system. It does not foster working together, it drives us apart and makes it much harder to get things done in congress.

    Most importantly, it would shake up the current dominating parties and maybe even lead to the rise of new parties to take thier place and slowly gain power over time. Maybe we can see the Green Party, the Libertarians, the Reform Party, and the Socialists all have a say in government. It makes the system less static and more dynamic--and democratic.

    You cannot divorce capitalism from government. The profit motive exists in human nature. As long as there are human beings in the government, there will be capitalism. Their votes are for sale. They spend our money to buy votes. They write rules to benefit their cronies and bosses. That's just human nature.
    Rational self-interest is not the same as capitalism because there are limits to rational self-interest, no limits in capitalism.

    Regardless, the structure of government and the laws checking elected officials should be working to divorce the self-interest mentality from politics. It must be about the interest of the general good of the country. Policies which make big business and union bosses profit should be illegal. I think we desperately need to get rid of interest groups connections to politicians. One way to do that is to reform the campaign process in America. Reducing the money that interest groups,unions, and corporations donate would be a good start.

    Some European countries (not all) do not have this same problem as we do with cronyism and such. In the UK for example they have publicly financed campaigns that are short and relatively inexpensive. Everyone gets an equal voice, no interest groups get involved (monetarily at least--which is most important) so not only does it eliminate part of the cronyism but it also generated much more representative elections.

    Right. They just tax us. Unless those people work for free, they get our money one way or another. Whether we use the service or not, we have to pay. I never use the bus. Guess what, my tax money goes to run the city busses. Those who use the bus pay very little. Those who do not use the bus pay way more, proportionally.
    Well, thats not thinking things through very far though. If all the lower-income people cant get to work because mass transportation is too costly or not available--that will create a serious economic drag on your city. It might just ruin the local economy, plus it will cause massive overcrowding on your streets. Not only will the quality of living slowly drop in your city, but so will the taxes generated citywide--taxes paying for programs that might benefit you.

    Granted I dont know the specifics of where you live and whats going on there...but as a rule this is how things work. Everyone gives and takes and in the long run it really evens out.

    Really? Ever try to get an answer from a government agency? Ever try to start a business? I suggest you try it first and then report back to us on how efficient the government is.
    Well, there are certianly problems in some bureaucracy--but those same problems exist in the private sector.

    Here's a great article you should take a look at, it addresses the most common myths about government bureaucracy. I learned most of this stuff in my state and local gov class but its always nice to hear a more detailed analysis:

    The Case FOR Bureaucracy

    Myths about Bureaucracy:
    -Government bureaucracy is immensely wasteful
    -Business is better than bureaucracy
    -We want the government to act like a business
    -Bureaucracy is the main cause of goverment growth
    -Bureaucracies provide poor service
    -Agencies should treat us as individuals
    The greatest weapon is the truth

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Is debt limit ceiling a game of chicken or chicken liitle saying the sky is falling
    By Roosveltrepub in forum American Politics & Economy
    Replies: 341
    Last Post: 10 Aug 11,, 18:56
  2. Till debt do us part: The showdown over the debt ceiling
    By troung in forum American Politics & Economy
    Replies: 41
    Last Post: 11 Jan 11,, 01:34
  3. New stratagy proposal?
    By roffelskates in forum Operation Iraqi Freedom/Operation New Dawn
    Replies: 0
    Last Post: 06 May 09,, 20:06
  4. Proposal for Iraq
    By Hashemite in forum The Middle East and North Africa
    Replies: 45
    Last Post: 29 Dec 06,, 03:29
  5. A Not So Modest Proposal
    By laus_alit_artes in forum The Middle East and North Africa
    Replies: 4
    Last Post: 03 Nov 04,, 18:05

Share this thread with friends:

Share this thread with friends:

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •