Embed Size (px)
Citation preview
State Budget Outlook
“Era of Austerity”
Mike ShealySC Senate Finance Committee
European and American Debt Crises Signal an Era of Austerity
Michael Gerson, Washington Post, May 19, 2010
“America is about to enter its own period of austerity, which likely will be the dominant political reality for the next decade. The new game will have few winners and many losers.
If the federal government takes spending reductions seriously, the first wave of austerity would hit the states and public employees.”
2
Austere Function: adjective
Etymology: Middle English, from Anglo-French, from Latin austerus, from Greek austēros harsh, severe; akin to Greek hauos dry
Date: 14th century
1 a: stern and cold in appearance or manner b: somber, grave
2: morally strict : ascetic
3: markedly simple or unadorned
4: giving little or no scope for pleasure
5 of a wine: having the flavor of acid or tannin predominant over fruit flavors usually indicating a capacity for aging
synonyms see severe
- aus·tere·ly adverb - aus·tere·ness noun
3
“Welcome to the Lean Years” Thomas Friedman, New York Times, February 23, 2010
We’ve just had our 70 fat years in America, thanks to the Greatest Generation and the bounty of freedom and prosperity they built for us. And in the past 70 years, leadership – whether of the country, a university, a company, a state, a charity or a township – has largely been about giving things away, building things, from scratch, lowering taxes or making grants. But now it feels as if we are entering a new era “where the greatest task of government and of leadership is going to be about taking things away from people,” said the Johns Hopkins foreign policy expert Michael Mendlebaum… Let’s just hope our lean years number only seven… Our parents were the Greatest Generation. We, alas, in too many ways, have been what the writer Kurt Andersen called “The Grasshopper Generation,” eating through the prosperity that was bequeathed us like hungry locusts.
4
BUDGET PRIMER
5
SC State Budget
FY 08-09 FY 10-11 (expenditures) (appropriations)
General Funds $5.75 Billion $5.08 BillionFederal Funds $7.37 Billion $8.27 BillionOther Funds $7.44 Billion $7.76 Billion
TOTAL: $20.56 Billion $21.12 Billion
SC Personal Income $145 Billion
(Budget is about 15% or 1/7th of economy)
6
7
Avg AnnualDescription 1994-95 2009-10 Difference % Change
Tax Revenues: Individual Income 1,655,953,953 2,170,909,624 514,955,671 1.8% Sales and Use 1,442,466,320 2,190,976,127 748,509,807 2.8% Corporate Income 232,272,412 109,557,160 (122,715,252) -4.9% Other Taxes 494,883,172 543,713,578 48,830,406 0.6%
Total Tax Revenues 3,825,575,857 5,015,156,489 1,189,580,632 1.8%
Motor Vehicle Licenses 100,425,868 12,362,258 (88,063,610) -13.0%Earned on Investments 61,504,170 41,706,507 (19,797,663) -2.6%Departmental Revenue 51,147,846 63,752,920 12,605,074 1.5%Nonrecurring Revenue 23,426,672 63,778,443 40,351,771 6.9%Other Revenues 171,459,447 45,139,158 (126,320,289) -8.5%
Total Revenues 4,233,539,860 5,241,895,775 1,008,355,915 1.4%
NOTE: 83.2% of all General Fund revenues in FY 2009-10 came from the Individual Income Tax and the Sales and Use Tax.
Source: Comptrol ler Genera l 's Year End Reports
Amounts
General Fund Revenue Sourcesby Major Category
Fiscal Years 1994-95 and 2009-10
Total Personal Income SC = 5%
Population SC = 1.4%
Top 10 Statewide Other Fund Revenue SourcesFiscal Years 1994-95 and 2008-09
8
Source: Office of State Budget
Avg AnnualDescription 1994-95 2008-09 Difference % Change
Other Funds - Earmarked/Restricted 1 University Fees 428,475,336 1,686,272,589 1,257,797,253 10.3%2 Sales Tax - EIA 366,650,309 560,649,108 193,998,799 3.1%3 Medicare and Medicaid Reimbursements 375,563,268 551,002,383 175,439,115 2.8%4 Gasoline Tax 214,376,940 404,199,993 189,823,053 4.6%5 Auxiliary Enterprises - Sales and Services 182,278,795 302,058,689 119,779,894 3.7%6 Lottery Proceeds - 271,760,556 271,760,556 - 7 Contributions Hospitals/ Medicaid Hospital MIAA 93,746,470 264,049,434 170,302,964 7.7%
8Medicaid Certified Public Expenditures (incurred expenses are certified for the non-federal share of Medicaid pymts) - 171,338,900 171,338,900 -
9 Motor Vehicle Licenses - 137,456,653 137,456,653 - 10 Special Fuel Tax 68,591,714 107,268,986 38,677,272 3.2%
Totals 1,729,682,832 4,456,057,291 2,726,374,459 7.0%
Note: The listing of the top 10 Other Funds sources represents 60% of the total of $7,442,174,291.
Amounts
Top 10 Statewide Federal Revenue Sources
Fiscal Years 1994-95 and 2008-09
9
Avg AnnualDescription 1994-95 2008-09 Difference % Change
Federal Funds1 DHHS Medicaid (MAP) Assistance Payments 1,443,188,191 3,187,995,429 1,744,807,238 5.8%2 DSS Food Stamp Coupons 301,893,005 898,692,309 596,799,304 8.1%3 DOT Federal Grants 245,045,118 440,637,655 195,592,537 4.3%4 DHHS Disproportionate Share 93,746,470 321,371,978 227,625,508 9.2%5 SDE School Food Services - District 93,806,685 215,219,734 121,413,049 6.1%6 SDE Chapter I - Low Income 87,104,395 200,598,118 113,493,723 6.1%7 SDE Title VI Part B Handicapped 29,305,979 176,882,067 147,576,088 13.7%8 DHHS Medicaid Asst Pymts - Refund Prior Yr Expenditure - 158,265,636 158,265,636 - 9 DSS Temporary Assistance to Needy Families - 132,471,307 132,471,307 -
10 MUSC Health Services Research and Development Grants 39,884,506 117,376,164 77,491,658 8.0%
Totals 2,333,974,349 5,849,510,397 3,515,536,048 6.8%
Note: The listing of the top 10 Federal Funds sources represents 79% of the total of $7,366,021,019.
Amounts
Source: Office of State Budget
Where is the Money Spent?
K-12 Education
39%
Higher Education
13%
Corrections& Public Safety
9%
Health & Social
22%
All Other17%
FY 2008-09 ExpendituresGeneral Funds
K-12 Education
20%
Higher Education
20%
Corrections & Public Safety
4%
Health & Social
40%
Transportation6%
All Other10%
FY 2008-09 ExpendituresTotal Funds
10
Source: Office of State Budget
THE CONDITION OF THE
SOUTH CAROLINA
STATE BUDGET
11
12
$0
$1,000,000,000
$2,000,000,000
$3,000,000,000
$4,000,000,000
$5,000,000,000
$6,000,000,000
$7,000,000,000
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
General Fund Collections
General Fund Revenue Collections
Average Annual Percent Change
FY 1980 - FY 2010
1980 1990 1,598,097,635 3,294,770,987 7.5%
1990 2000 3,294,770,987 5,006,736,929 4.3%
2000 2010 5,006,736,929 5,085,590,670 0.2%
2002 2007 4,929,959,859 6,658,502,908 6.2%
2007 2010 6,658,502,908 5,241,895,775 -7.7%
13
From the peak of General Fund Revenue collections
in FY2006-07 through FY2009-10
Collections have dropped $1.42 Billion or 21.3%.
14
Conventional Thought During the Growth Years
Incorrect Assumption: Revenue growth from FY04-05 through FY06-07 was recovery from
“9/11” recession.
Reality: The revenue growth was a bubble mirroring the economic
bubble caused partially by mortgage financing and other
forms of borrowing.15
THE IMPACT OF THE
“GREAT RECESSION”
ON STATE FINANCES
16
Summary of Revenue Shortfall FY 2008-09 FY 2008-09 Appropriation Act Revenue Estimate (Net of Tax Relief Trust Fund) 6,718,657,837
BEA Forecast Reduction July 21, 2008 (140,000,000) BEA Forecast Reduction October 8, 2008 (414,000,000) BEA Forecast Reduction November 7, 2008 (135,100,507) BEA Forecast Reduction December 10, 2008 (230,000,000) BEA Forecast Reduction March 11, 2009 (64,000,000) BEA Forecast Reduction June 11, 2009 (92,000,000)Total BEA Revenue Forecast Reductions (1,075,100,507)
Additional Revenue Shortfall (FM13) (129,784,560)
Open-Ended Appropriations Homestead Exemption Fund Shortfall (52,995,831) DOC & DJJ Deficits (Recognized by B&C Board) (51,795,768) Other Open-Ended Accounts (4,512,014)Total Open-Ended Appropriations (109,303,613)Total Year End General Fund Shortfall (1,314,188,680)
FY 2008-09 General Assembly and Budget & Control Board Actions B&CB Action 8/08/08--Reduce Capital Reserve Fund 133,170,058 FY 08-09 Appropriation Rescission Act- Targeted Agency Reductions-Oct 2008 487,906,416 B&CB Action 12/11/08--7% Across the Board Agency Reductions 383,475,665 B&CB Action March 18--2% Across the Board Agency Reductions 101,894,963
Total General Assembly and B&C Board Actions 1,106,447,102 Agency Lapsed Funds and Sustained Vetoes 1,428,054
Remaining Year End General Fund Shortfall (206,313,524)
General Reserve Fund Balance Applied to Shortfall 108,096,907
FY08-09 Year End Deficit Remaining After Reserve Funds Applied (98,216,617)
17
Summary of Revenue Surplus FY 2009-10BUDGETARY GENERAL FUND
Fiscal Year Ended June 30, 2010
Appropriations Act Budgeted Revenues for FY09-10 5,552,002,165$ Actual Revenues 5,241,895,775
Shortfall (310,106,390)$
Mid-Year Budget Actions of Budget and Control Board:
Applied Capital Reserve Fund against Projected Revenue Shortfall -- June 2009 127,847,888
Cut Agency Budgets 4.04 percent -- September 2009 200,452,112 Cut Agency Budgets 5 percent -- December 2009 238,227,922
566,527,922
Closing Entries Directed by Statute or Proviso:
To Cover "Open-Ended" Appropriations 40,244,804
To Liquidate FY09 Operating Deficit Carried Forward to FY10 98,216,617 To Replenish General Reserve Fund 46,959,511
(185,420,932)
Net Budgetary Surplus 71,000,600$
Source: Comptroller General FY 2009-10 News Release August 2010
18
Cumulative General Fund ReductionsJuly 2008 – July 2010
Department of Corrections 13%Health & Human Services 21%Department of Public Safety 24%Department of Education 25%Department of Social Services 25%Disabilities & Special Needs 33%Department of Mental Health 38%
Colleges & Universities 44%Department of Agriculture 51%Department of Insurance 61%Department of Commerce 68%Human Affairs & Consumer Affairs 71%Budget & Control Board 100%
19
General Fund Revenue Forecast (BEA rev. 11/10/10)
Minimal Growth
FY 2010-11 1.5% growth compared to actual collections for FY09-10.
FY 2011-12 is 1.0% growth.
Long Range Forecast for FY 2012-13 and beyond is an average 1.5% growth rate.
20
How Did We Get Here?
The National Recession
The Structure of Our State Revenue System
Taxation and Spending Policies
21
THE NATIONAL
RECESSION AND ITS
EFFECTS ON THE STATE
ECONOMY
22
23
8.0
-6.8-7.0
-5.0
-3.0
-1.0
1.0
3.0
5.0
7.0
9.0
2000Q1
2001Q1
2002Q1
2003Q1
2004Q1
2005Q1
2006Q1
2007Q1
2008Q1
2009Q1
2010Q1
Perc
ent C
hang
e
Real GDP Growth by Quarter2000 - 2010 Q2
Seasonally Adjusted Annual Rates
5.0
U.S. Recessions1948 - 2009
Date Duration (Months)
1948 - 49 11
1953 - 54 10
1957 - 58 8
1960 - 61 10
1968 - 70 11
1973 - 75 16
1980 - 80 6
1981 - 82 16
1990 - 91 8
2001 - 02 8
2007 - 09 22
Average 1945 - 2001 10 months
24Source: Dr. Bruce Yandle, Dean Emeritus, Clemson University
Gross Domestic Product
GDP = Consumption +
Investment +Government +Net Exports
Consumption is about 70% of GDP.
25
Consumer Credit Outstanding 2004 – 2010 Q2
Seasonally Adjusted
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
2004 2005 2006 2007 2008 2009 2010 Q1 2010 Q2
Perc
ent C
hang
e
- 4.4%
5.6%
26
Personal Savings Rate
27
MEASURES OF THE STATE ECONOMY
28
29
-8%
-5%
-2%
1%
4%
7%
10%
13%
16%
19%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010South Carolina Total Personal Income and
Dividends, Interest and Rent IncomePercent Change from Previous Year
Personal Income Dividends, Interest & Rent (15% of YPSC)
Perc
ent
Chan
ge
Source: Board of Economic Advisors
Jan-
07
Mar
-07
May
-07
Jul-0
7
Sep
-07
Nov
-07
Jan-
08
Mar
-08
May
-08
Jul-0
8
Sep
-08
Nov
-08
Jan-
09
Mar
-09
May
-09
Jul-0
9
Sep
-09
Nov
-09
Jan-
10
Mar
-10
May
-10
Jul-1
0
100,000
120,000
140,000
160,000
180,000
200,000
220,000
240,000
260,000
280,000
300,000
Total Unemployment in South Carolina
Month
30
Monthly Individual Income Withholdings
% Change Over Prior Year
31
-16%
-11%
-6%
-1%
4%
9%
14%
19%
24%
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
FY2008-09 FY2009-10 FY2010-11
FY 1999 FY 2009
Gross Sales Amount 94,435,505,424 135,859,825,695 44%
Net Taxable Sales Amount 45,199,250,866 52,667,993,248 17%
Percentage of Net Taxable Sales 47.9% 38.8%
FY 2008 FY 2009
Gross Sales Amount 146,328,024,474 135,859,825,695
Net Taxable Sales Amount 59,660,508,895 52,667,993,248
Percentage of Net Taxable Sales 40.8% 38.8%
Source: Department of Revenue, Annual Report.
Comparison of Gross and Net Taxable Sales
FY 1999 – FY 2009
The Base is Shrinking.32
SOUTH CAROLINA’S TAXATION & SPENDING
POLICIES
33
34
Tax Relief in South Carolina
Netted Over $600M in the last 5 years
Relief passed by the General Assembly since 2005 includes:
Total elimination of the state’s “grocery tax”. $425 million
Elimination of the state’s bottom income tax bracket. $86 million
Reduction of the tax on small business from a top marginal rate of 7% to a flat rate of 5%. $129 million
The Base is Shrinking.
Open-Ended Appropriations
Agency Description of Appropriation Authority
FY 2009-10 Existing
Appropriation
FY 2010-11 Estimated Increase
Total Appropriated
LIFE Scholarship Program Section 59-149-150Palmetto Fellows Section 59-104-20(D)
Dept of Revenue Section 11-11-156(A)(6) 26,419,132 99,732,585 126,151,717
Total 224,985,362 117,932,585 342,917,947
Homestead Exemption-One Cent Sales Tax Swap/ School Operating Expenses
18,200,000 216,766,230198,566,230Comm. on Higher Education
35
An open-ended account is an obligation that will be paid regardless of the amount actually budgeted.
Demands for these two programs automatically are considered first for funding in each budget cycle due to statute. This “crowds out” consideration for increases in other areas of the budget.
Property Tax Relief for Homeowners “The Swap” $620 million
Sales Tax Increased 1¢ to Eliminate the Property Tax for School Operations
36
Fiscal Year
ESTIMATED Homestead
Exemption Fund Revenue
ACTUAL Homestead
Exemption Fund Revenue
ESTIMATED Homestead
Exemption Fund School District
Reimbursements
ACTUAL Homestead
Exemption Fund School District
Reimbursements 1GENERAL FUND OBLIGATION 2
FY 2007-08 582,480,339 550,484,062 (527,290,536) (565,029,770) (14,545,708)
FY2008-09 530,646,607 532,647,527 (585,643,360) (585,643,358) (52,995,831)
FY2009-10 496,940,585 496,940,585 (614,398,619) (620,651,411) (123,710,826)
FY2010-11 534,969,257 (628,155,049) (93,185,792)
FY2011-12 539,421,601 (645,170,691) (105,749,090)
1 Growth in Reimbursement Allocation is a Function of CPI (Southeast Region) plus SC Population Growth (Act 388 of '06).
2 Open-ended account.
Note : Supreme Court Ruling #26682 7/6/09 Berkeley County School District v. SC Department of Revenue could affect base.
Homestead Exemption Fund History
RESPONSES TO THE CONDITION OF THE
STATE BUDGET
37
The SC Taxation Realignment Commission (aka “TRAC”)
38
Sponsored by Sen. Leatherman and Others
Modeled after the federal Base Realignment Commission
11 members (credentialed), No Legislators & Lobbyist Protocols
Exhaustive Study (State and Local including exemptions)
Look for “adequacy, equity and efficiency” (aka, “Broad Base / Low Rates”) ie, 3.4% vs. 6.0% sales tax rate, etc.
“Modernize and Stabilize” the system
Recommend legislative changes to Money Committees
14 meetings scheduled through September 2010
Meeting information and research materials available on TRAC website:
http://www.scstatehouse.gov/citizensinterestpage/TRAC/TRAC.html
TRAC RecommendationsSales Tax:Expand the Base and Lower the RateAutos - Ratchet up to $600, $1000, $1,200 then
no capFood - Tax at 59% of Gross Proceeds (effective rate 2.95%, Food stamp purchases exempt)
Prescriptions - Tax at 25% of Gross Proceeds (effective rate 1.25%, exempt Medicare & Medicaid)
Residential Electricity - Tax at 25% Gross Proceeds
(effective rate 1.25%)
Lower Rate to at least 5% (including services the rate will be less than 5%)
39
GDP = Consumption + Investment + Government + Net Exports
A Keynesian approach Macroeconomic Policy
President Kennedy’s Revenue Act of ’64 (marginal rate from 91% to 70% above $400K)
President Bush’s $600 Tax Rebate ’08
President Obama’s ARRA of ’09 40
H.R.1 of 2009American Recovery and Reinvestment Act of
2009
$787.242 Billion or about $2600 per capita
South Carolina's Portion of Stimulus Funds
Total $7.86 Billion
Tax Cuts $2.86 Billion
Total Spending in SC $5 Billion*
*(includes Federal spending on Federal installations)
Of the $5 Billion spent in SC:$3.4 Billion will be received by cognizant State agencies
through the state budget. (The $3.4 billion includes allocations received by state agencies and subsequently distributed to local governments, non-profits, etc)
41
Extension of FMAP Stimulus $149.6 million
Education Jobs Fund Program SC Ineligible for $143.7 million
BUT, this will likely be the last large federal stimulus for some time, because … 42
An Extension of Stimulus Funding
HR1586 passed 8/10/10
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
14.0
16.0
18.0
20.0
22.0
24.0
26.0
Federal Receipts and Outlays % of GDP
Receipts
Outlays
Year
% o
f G
DP
Surplus
$3,720B
$2,165B
43
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
50
60
70
80
90
100
110Federal Debt Held by Public
Debt Held by Pu...Year
% o
f G
DP
$14 Trillion
44
Does all this matter – No & Yes
Debt as % of GDP CIA Factbook ‘09 GDP CIA Factbook (Purchasing Power Parity)
Japan 189.3% Italy 115.2% Greece 113.4% Canada 75.4% Germany 72.1% United Kingdom 68.1% Mexico 37.7% Ethiopia 31.8% China 16.9% Kuwait 8.1% Libya 3.9%
US $14.2T China $8.8T Japan $4.1T India $3.5T Germany $2.8T UK $2.1T Russia $2.1T France $2.1T Brazil $2.9T Italy $1.8T Mexico $1.5T
Note : US Federal DEFICIT≈ Mexico GDP45
THE OUTLOOK FOR THE
NEXT SEVERAL YEARS
AND BEYOND
46
Facts: State General Fund appropriations have dropped 25%
over the past three years.
The long-range growth rate for State General Fund revenues is 1.5%, less than expected inflation and population growth.
Many state agencies have budgets reduced to “threshold levels” where additional cuts will trigger federal intervention and mandates or effective closure of those agencies.
The State Budget list of obligations is at least $900 million greater than available resources for Fiscal Year 2011-12.
Federal Stimulus Funds will be exhausted and many other federal sources will diminish as the Federal Government begins to address deficit and debt issues. 47
48Source: Office of State Budget
FY 2011-12 Statewide:Formula Driven by State, Federal, & Constitutional Mandates:
General Reserve Fund 17,141,169
Capital Reserve Fund (6,045,540)
Local Government Fund 33,265,899 (Restore to statutory formula)
Homestead Exemption Excess Amount Funded in FY10-11(BEA 11/10/10) (17,888,481)
Employee Health Insurance 29,119,844
Recurring Appropriations in Part 1A Supported w/ Nonrecurring Revenue 151,542,533
Subtotal - Statewide Items 207,135,424
State Agencies:
State Department of Education 187,992,646
Department of Health and Human Services 183,778,486
All Other State Agencies 282,294,651
Subtotal - State Agencies 654,065,783
ANNUALIZATION OF FY 2010-11 861,201,207
A.R.R.A. FMAP Extension (January - June 2011) 149,000,000 Estimates of Potential Agency Deficits (preliminary est. under review by OSB)
Department of Health and Human Services 227,786,198
Department of Social Services 28,800,000
Department of Corrections 7,500,000
ANNUALIZATION INCUDING FMAP EXTENSION & DEFICITS 1,274,287,405
Possible Annualizations Needed in FY 2011-12Based on Final 2009-10 Revenues
(Includes Potential Agency Deficits)
The Annualizations list is the State Budget Office's attempt to identify items that may be funding issues in the next fiscal year. The list is a subjective interpretation of items funded in the Appropriation Bill and is not intended or to be construed as a binding, legal document.
The Appropriations Act uses A.R.R.A. funding from the Federal Medical Assistance Percentage (FMAP) increases and funding of $346 million from the Fiscal Stabilization Fund.
Summary of Available Revenue Sources
49
FY 2010-11
Contingency Reserve Fund (FY 2009-10 Net Budgetary Surplus) 71,000,600
FY2010-11 General Fund Revenue Collections (BEA 11/ 10/ 10) Over FY2010-11 Appropriation Act Estimate 242,055,055
$313,055,655
FY 2010-11 Capital Reserve Fund 110,883,455
Total Available $423,939,110
FY 2011-12 Available "New" Revenue (BEA est. 11/10/10)
BEA Revenue Estimate 5,863,933,851
- Tax Relief Trust Fund (545,680,709)
- FY 10-11 Appropriation Base (5,080,373,895)
Projected Total Revenue $237,879,247
Education Finance ActFormula Funding Requirement
50
FY 2010-11
Statutory Requirement
Base Student Cost $2,720 $1,689,909,888
Actual Appropriation
Base Student Cost $1,630 $1,004,394,001
Difference
Base Student Cost $1,090 $ 685,515,887
Note: Amounts do not include fringe.
Headlines“Spartanburg Detox Center Shuts Down over
Budget Cut” - Jason Spencer, Spartanburg Herald Journal, July 5, 2010
“SCDJJ Cutting School Jobs, Requiring Furloughs” – Seanna Adcox, AP, July 7, 2010
“C of C Tuition Goes Up $1,326: President Says State Cuts Behind Increase” – Diane Knich, Post & Courier, June 8, 2010
“Cash-Poor Governments Ditching Public Hospitals” (Barnwell County) – Suzanne Sataline, Wall Street Journal, August 29, 2010
“The new AIDS crisis” – Renee Dudley, Post & Courier, September 19, 2010
51
Who will Build the Bridges? Thomas Friedman
New York Times, April 9, 2010If you step back far enough, you could argue that George W. Bush brought the Reagan Revolution – with its emphasis on tax cuts, deregulation and government-as-the-problem-not-the-solution – to its logical conclusion and then some. But with a soaring deficit and a banking crisis caused by the excess of deregulation, Reaganism has met its limit. Meanwhile, President Barack Obama’s passage of health care reform has brought the New Deal-Franklin Roosevelt Revolution to its logical conclusion. There will be no more major entitlements for Americans. The bond market will make sure of that.
In other words, both major parties have now completed their primary 20th-century missions, first laid down by their standard bearers. The real question is which party is going to build America’s bridge to the 21st-century – one that will strengthen our ability to compete in the global economy, while practicing much more fiscal discipline.
52
Popular 20th Century English Philosopher
Sir Michael Philip Jagger
wrote in 1968:
You can’t always get what you
want
And if you try sometime you
find
You get what you need.53
Options for Next Year’s Presentation Title(based on old pop songs)
“I Can See Clearly Now (the rain is gone),” Johnny Nash, 1972.
“I Will Survive,” Gloria Gaynor, 1978.
“Dust in the Wind,” Kansas, 1977.
54
