Accompanying the news out of Wisconsin, in which Gov. Scott Walker became the first governor to win a recall election in U.S. history last night, came more sobering news about the nation's rising national debt.
This was a major reason why the Republicans, Tea Party forces and other Wisconsin voters decided to put their trust in a fiscal conservative focused on cutting spending and balancing the budget in their state.
There is no magic in Gov. Walker being able to reign in spending and balance Wisconsin's budget while on the federal side, this president and congress are resigned to watch as the federal debt clock continues to tick up crazy numbers. In two years in office, Walker's bold steps to control spending turned Wisconsin's estimated $3.6 billion shortfall into a budget surplus and lower taxes.
Big labor felt that Walker and state legislators went too far in going after the collective bargaining agreements of public-employee unions. It's true that Walker could have presented a clearer case at the outset of his campaign in explaining his strategy on how to control budget spending.
There's also no debating the fact that for years unions enjoyed a free entry card to Wisconsin government. Unions benefitted greatly from politicians who granted public employees generous pension benefits, early retirements, full health care coverage, and no employee contributions to health care packages.
Keep in mind that Walker's cuts are across the board and affect everyone not just Democrats or the labor unions. Everyone must sacrifice.
On Wednesday the Congressional Budget Office put out a new red flag alert about the future of our explosive national debt. By the end of this year the deficit, which is now over $14.4 trillion, will be 70 percent of the gross national product, making it the highest since World War II.
But because retiring baby-boomers will be consuming more resources after departing the workforce, this is just the tip of the iceberg. As more boomers retire, costs for health care will increase and according to CBO, Social Security and the services for the poor funded by Medicaid, will face a "serious and sustained increase."
When debt approaches 100 percent of GDP, some economists say the U.S. will reach a tipping point and go the way of Europe, leading to higher interest rates, cuts in social services, and the lay-off of government workers.
Many states are facing severe budget problems not unlike what Wisconsin experienced, making this presidential election pivotal. As we know from balancing our own checkbooks, there's no free ride or easy solution to digging out of debt, even though this president is famous for writing checks on federal money we don't have.
Ultimately, it's the voters who must decide if they want their leaders to bite the bullet and accept Walker-like austerity measures (not printing money like the fed), or keep spinning on a listless European/Greece path that only leads to economic disaster.
By Jim Zbick