Culture of thrift missing in government

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By Rob Witwer

The New York Times recently ran an interesting front-page article about Diane McLeod, a Philadelphia woman who is struggling to dig herself out from under a mountain of consumer debt. Her plight is hardly unique. According to the Times, the average household carries credit card debt of $8,565, which is 15 percent higher than in 2000.

Other statistics are equally sobering. The Times reports that “household debt, including mortgages and credit cards, represents 19 percent of household assets, according to the Fed, compared with 13 percent in 1980.”

As a result, “the percentage of disposable income that consumers must set aside to service their debt — a figure that includes monthly credit card payments, car loans, mortgage interest and principal — has risen to 14.5 percent from 11 percent just 15 years ago.”

Moreover, “the nation’s savings rate, which exceeded 8 percent of disposable income in 1968, stood at 0.4 percent at the end of the first quarter of this year, according to the Bureau of Economic Analysis.”

Responding to this article, New York Times columnist David Brooks concluded: “What happened to McLeod, and the nation’s financial system, is part of a larger social story. America once had a culture of thrift. But over the past decades, that unspoken code has been silently eroded.”

Although he doesn’t say it directly, I think Brooks’ logic easily extends to government spending as well as consumer spending. According to the bipartisan Concord coalition, net national saving (public and private combined) has dropped from 8.5 percent of GNP 25 years ago to less than 2 percent today.

I could also throw in the statistic that the national debt stands at $9.5 trillion, but that number is so inconceivably huge that the mind simply cannot comprehend it.

Closer to home, the most recent budget passed by the Colorado General Assembly raises government spending from last year by a staggering $1 billion dollars (for a total in excess of $17 billion). While some would portray the Taxpayer’s Bill of Rights (TABOR) as excessively restrictive, TABOR allows government to grow at 6 percent (plus growth) annually. By comparison, personal income typically grows in the range of 3 to 5 percent.

Neither political party is blameless in this state of affairs. According to the libertarian Cato Institute, at the federal level increases in real discretionary spending in 2002, 2003 and 2004 represented three of the five largest increases in the past 40 years.

Everywhere I go, the message that government spending is out of hand resonates with voters. Because of this, savvy politicians give plenty of lip service to fiscal accountability. But if you really want to test their beliefs, you must put them on the spot. To separate the rhetoric from reality, consider asking the following questions:

Did you vote (or would you have voted) for or against the budget passed in 2008 which increased government spending by approximately $1 billion? Do you oppose Gov. Ritter’s 2007 mill levy “freeze,” which will increase property taxes by as much as $3 billion over the next 10 years? Do you support or oppose ballot initiatives that will increase taxes on citizens and businesses, therefore enabling government to spend yet more? Do you support the TABOR amendment?

We need change in government all right — but not the kind of petty change big spending legislatures and Congresses leave in your pocket after a budget binge.

Rob Witwer is the state representative for House District 25, which encompasses the Evergreen area and most of western Jefferson County.