States face serious budget challenges; no help from federal government

In a speech delivered in Phoenix last Friday, David Stockman, budget chief under President Ronald Reagan, painted a gloomy picture for the economy.  According to the Arizona Republic, “Stockman told the assembled legislators, business and civic officials and others that the nation’s Capitol will offer no help and probably will complicate matters.”

“Washington will become a fountain of harm as you struggle with our own problems,” he said, but the article did not describe what might spew forth from that “fountain of harm.” It did mention that “His prescription for restoring balance to the federal budget calls for a mix of tax hikes, budget cuts and entitlement reforms, such as means-testing Social Security.” (read more here).

Why was there no mention of the bloated military and war budget, the maintenance of bases in countries around the world, or the enormous levels of wasteful pork barrel spending that Congress has become addicted to?

What is a state like Arizona to do?

The feds will do what they will do. The states will need to solve their own problems using their own resources, despite whatever destructive measures continue to emanate from Washington and New York.

In the coming weeks, we will be offering our own prescriptions for actions to be taken at the state level. These will outline basic measures that states need to implement in order to address their deepening financial woes and to make the inevitable transition to a steady-state economy. What we have in mid will be much more radical and salutary than anything being offered elsewhere. Stay tuned. –t.h.g.