It’s amazing, the things we get worked up about — and the things we don’t.
An animal rights group recently gathered some 45,000 signatures on a petition protesting an Outagamie County church’s “Pig Rassle.” Meanwhile, 1,000-plus human beings have been shot or killed in Milwaukee in the last couple years, and I sometimes wonder if more than 45 people even know it.
Increasing numbers of researchers and parents are outraged that kids are being asked to do too much homework. Of far less concern: the fact America’s children lag far behind much of the rest of the world in key subjects like math.
And then there’s the recent bellowing about the so-called $1.8 billion “structural deficit” Wisconsin could theoretically face some three years down the road, and the absolute indifference to the real federal deficits that could well be this country’s ruin.
It’s hard to even compare the two since Wisconsin, in truth, neither has nor ever can have a real deficit. This state by law must balance its budget — and actually ended the last fiscal year, so far as anyone can tell right now, with a surplus of over $400 million.
We don’t know for sure because an audit of expenditures and revenues for the fiscal year that ended June 30 won’t be available for another month. The Legislative Fiscal Bureau (LFB), nevertheless, determined that tax collections were lower last year than expected. And they have concluded that, if the trend continues through the end of the budget that ends in the summer of 2017, we will have a “structural deficit” at that point of $1.8 billion.
Never mind, I guess, that the 2015-2017 budget won’t even be adopted until late next spring. No one has any idea what will be in it or even who our governor will be, let alone exactly what the economy will do over time. Although that $1.8 billion number has been reported ad nauseam, in other words, it’s essentially meaningless.
Nearly as meaningless is LFB’s projection for the current two-year budget that ends in June of 2015. Assuming the revenue slowdown continues, the bureau estimated, we’ll have a shortfall of $397 million by then.
It’s increasingly apparent that estimate is probably inaccurate. The Wisconsin Department of Revenue now knows that tax collections in the first two months of the current fiscal year – July and August – are higher, not lower, than previously expected. There are logical reasons revenues would be lower in the last fiscal year than they will be in this one (such as that godforsaken cold weather that made all of us hibernate).
Even if the estimate of a $397 gap is accurate, though, it’s not worth getting worked up over. $397 is just a little over 1% of the state’s biennial general purpose budget. If need be, surely state government can become 1% more efficient in order to balance our budget.
Unlike the federal government.
Each and every year, the federal government runs a real deficit. A few years ago, it was spending $1 trillion more than it took in. This year, it will spend “only” about $500 billion more than it takes in.
“People tend to get a false sense of security” because the deficit has been declining a little, David Walker, the U.S. comptroller general under Presidents Bill Clinton and George W. Bush, told me.
Overall obligations and debt, though, are going the other way. If you include unfunded obligations in programs like Social Security and Medicare, he says, our federal government was in the hole by 2012 to the tune of some $70 trillion — and that number keeps growing.
The total amount of federal debt held by the public is now equivalent to about 74% of gross domestic product — a higher percentage than at any point in U.S. history except a brief period around World War II, according to the Congressional Budget Office. And it’s projected to rise to 79% of GDP by the end of 2024.
Walker, who is speaking at the Wisconsin Policy Research Institute’s Annual Dinner in Milwaukee in October, wonders what the founders of this country would say and warns that some of our problems — including fiscal irresponsibility and the lack of political civility — are eerily similar to what precipitated the fall of the Roman Republic.
And yet, it’s almost impossible to get people to care or even pay attention.
Too bad we can’t get as worked up about the real deficit as the pretend one.
Mike Nichols is president of WPRI.