An additional benefit of a new voluntary bankruptcy law for states is that its mere existence may deter any state from ever availing itself of its provisions. If government employee union bosses know that they could have all their contracts annulled under federal bankruptcy law, either through a plan of reorganization voluntarily entered into by state leaders or by the voters through proposition, they may be far more accommodating with state governments to restructure government employee union workforces, pensions and work rules.
Federal bailouts must come to an end. Federal taxpayers in states that balance their budgets should not have to bail out the irresponsible, pandering politicians who cannot balance their budgets. Congress must allow a safe, orderly way under federal bankruptcy law for states to reorganize their finances.
He proposed huge federal "investments" in transportation (high-speed rail), "green" energy, high technology and other areas. But soon after calling us to rise to our "Sputnik moment," he proposed freezing domestic spending. As The Associated Press noted, either he's serious about the spending increases he calls investments, or the spending freeze, but he can't be serious about both because doing both is impossible.
When moments later Mr. Obama said, "We are the first nation to be founded for the sake of an idea," one felt the ghost of the Gipper hovering nearby. The president called forth more of those spirits, praising "the idea that each of us deserves the chance to shape our own destiny. That's why centuries of pioneers and immigrants have risked everything to come here."
And: "We need to out-innovate, out-educate, and out-build the rest of the world." Yes!
And: "Our free enterprise system is what drives innovation." Oh, yes!
Even an Obama naysayer was thinking, Go for it, Mr. President. Unleash our nation of pioneer entrepreneurs with incentives to work, save and invest. (But why the weird slap at the all-American competitiveness of the Super Bowl?)
For a while Tuesday night, it appeared Mr. Obama would replicate Bill Clinton's almost sci-fi ability to absorb his opposition's best ideas, such as welfare reform, and re-infuse them into the body politic as his own. But no. We got high-speed rail and solar shingles.
"Our budget will make long overdue investments in priorities-like clean energy, education, health care, and new infrastructure." He extolled "new jobs that pay well" such as "installing solar energy panels and wind turbines."
This isn't a vision. It's an obsession.
Sending the completed trade agreements with Colombia and Panama to Congress for ratification should have been a lay-up for a president seeking the center. That's not happening.
What's ahead? Mainly one thing: November 2012.
If the State of the Union disappointed policy wonks, it's because the Obama presidency has entered full campaign mode. His State of the Union was a road map to a second term. Draw the Republican Congress toward the post-November spirit of reform on spending, entitlements and taxes, let these ideas twist in the wind of endless negotiation, pocket the "bipartisan" effort, and run out the clock to a three-point November victory.
Rather than work hard, live within his means and save for the future, a dissolute student decided to invent a system for beating the bank at roulette. After months of experimentation with betting patterns, his quest bore fruit: a foolproof way of creating riches - or so he thought.
The problem was, in order to exploit his genius a bankroll was required. At this point, a credulous father was inveigled into the scheme. Suspending disbelief, the hapless parent signed a six-figure cheque and wished his son good fortune as the boy left for Las Vegas.
After a few days with no contact, Dad started to fret and sent the lad a tentative message: "How are we doing?" No reply.
A week later, he tried again, only this time was rather more panicky: "What's happening?" Still no reply.
Finally, the desperate man sent an ultimatum: "Get in touch - or else!" His delusional offspring eventually replied: "Delighted to inform you system is working. Please send more money."
Greece has barely scratched the surface of a sprawling and corrupt public sector, where standards of book-keeping shame a country that lays claim to the oldest counting board yet discovered (300BC).
Greece is learning the hard way that cutting the budget deficit and reducing overall debt are not the same thing. There comes a point where austerity alone cannot deliver a solution, because the burden of unaffordable obligations is rising faster than savings can be made. Long after the bullet has been bitten, total mortgage arrears continue to deteriorate.
As long as Greece remains locked in a currency that is deutsche mark with only a hint of garlic, its economy cannot recover. A lethal combination of rising unemployment, falling wages and an exodus of talent will force it to confront reality. That will occur when either the voters decide they can no longer stand the hair shirt or the country's creditors run of out patience.
The same will apply to Portugal and, eventually, Spain. Thus the euro, as we know it, is finished.
We cannot have a useful debate on the role of government -- what it should do, for whom and at whose expense -- if Americans are highly misinformed. Obama should have dispelled some common budgetary myths.
The bill would replace the spending levels for 2011 authorized in December in a continuing resolution that expires in March with spending at the 2008 levels, for all lines in the budget except defense, homeland security, and veterans. That would save $80 billion just this year.
Then, the bill would cancel unused spending authority in the 2009 stimulus bill, for a savings of $45 billion. The Republican proposal would privatize Fannie Mae and Freddie Mac, saving $30 billion more.
The largest saving comes from a 10-year freeze at 2006 spending levels for nondefense, discretionary budget programs-agriculture, national parks, medical research, waterways, environmental protection, but not for benefits such as food stamps, social security, and Medicare. This would save $2.3 trillion in the years 2012-2021.
Savings would come from cuts in the federal workforce, both in numbers of workers hired and in pay, as was suggested by Professor Paul Light of New York University . The workforce would be reduced by 15% through attrition, with only one worker hired for every two workers who quit or retire. In addition, existing workers would not be given automatic annual pay increases.
Mr. Jordan should be credited with doing the tough work of going through the budget and identifying specific cuts. The bill lists more than 100 programs slated for elimination or reduction.
Unlike Mr. Obama's plan, transportation is left to the private sector. The bill would cut, annually, $1.56 billion in subsidies for Amtrak, $2.5 billion for intercity and high-speed rail, and $2.5 billion for New Starts Transit. In addition, the federal civilian employee travel budget would be halved, saving $7.5 billion a year.
Many liberal sacred cows would be not just gored, but put down permanently. Who needs the Corporation for Public Broadcasting, with annual subsidies of $445 million, when we have the vast cornucopia of broadcast, cable and Internet offerings? Why do we need the National Endowments for the Arts and the Humanities (together, over $330 million annually in spending) when corporations fund art exhibits and concert series?
International subsidies, such as the International Fund for Ireland and Economic Assistance to Egypt, also get the hatchet, as well as contributions to the Organization for Economic Cooperation and Development and to the Intergovernmental Panel on Climate Change.
