Given the fact that Federal Reserve Chairman Ben Bernanke had to tell Congress not to spend more than they have, it seems like America is in an economic hole. In light of the opposite nature of spending by our local governments, we believe the answer will come from trying to find a balance between short-term spending and long-term financial planning.
In a sign very much indicative of the times, Federal Reserve Chairman Ben Bernanke on Tuesday had to urge Congress and the Obama administration to come to an agreement on a budget deal that includes cuts in spending and reductions in the federal debt in order to avoid possible severe economic repercussions in the future.
Let that soak in for a minute.
The United States Congress, the people we select to be the leaders of our country, had to get the same lecture from the head of the Federal Reserve — arguably the world’s most influential economist — that most teenagers get from their parents: don’t spend more than you have.
It kind of makes you dizzy, doesn’t it.
Not only do we think this principle is a key economic guideline, we think it is THE key economic guideline, one that governs the very basic idea of economics.
The fact that so many of our elected officials don’t seem to understand how basic and important this ideal truly is nicely illustrates how our country ended up in this economic mess. Our leaders are putting short-term spending needs above the long-term well-being of our country, and it needs to stop.
Bernanke said as much Tuesday. He said the debt limit will need to be raised in the short term to avoid another recession, but also stressed the importance of creating a long-term plan for cutting federal spending and borrowing.
We’re quite confident Congress will act on the first part of that advice. We’re not holding our breaths about the second part.
On the local level, the landscape couldn’t be more different.
As opposed to a government that spends more than the revenue it takes in, our local governing bodies and government agencies spend far less than the they receive in tax revenue. The result is county and city coffers equipped with healthy reserve funds.
Largely, our local officials deserve thanks for ensuring our local community is financially secure.
However we believe there comes a point when too much excess revenue can be collected. After a governing body has generated enough revenue to cover it’s costs for the year, and even after a little excess money is allocated to a reserve fund, it makes sense to us for that entity to either expand the services it offers — thereby using taxpayer money to further benefit residents — or to lower taxes for it’s residents.
Why should a government stockpile a large amount of taxpayer money when those taxpayers have a very real need for it?
We think it should be returned to taxpayers in the form of tax cuts.
Regardless of personal preferences, however, the dichotomy that exists between government spending on the national level and at the local level in Moffat County is a good example of fluid nature of our government.
We spend so much time as Americans trying to steer government to a static point at either end of the political spectrum. It would appear, though, that the true recipe for success involves trying to find the right balance necessary from each side in order to tackle the issues of the moment.
We’re not sure exactly what that balance is for the issues of today, but our elected officials better do their jobs and figure it out quickly.