The Hurricane Winds Gather

The starting point for the discussion of public policy in the United States and the 50 states today is the looming insolvency of the federal government at some point in the next 20 to 25 years. By “insolvency,” I mean we are heading toward an Argentina-style financial crisis that will lead to the radical truncation of the size of the federal government, the collapse of the American welfare state, a retrenchment of the American empire and a devolution of power to the states.

There are some in the blogosphere who discuss such talk as scare mongering on the part of partisans unalterably opposed to the Obama health care plan. My response to them is, fools, you are short-sighted beyond belief. Instead of agitating for an expansion of the welfare state and acceleration of deficit spending, you should devote your energy to avoiding the fiscal cataclysm that will reduce America’s social safety net to tatters and cause incalculable pain for those who rely upon it.

But the blind defenders of fiscal Business As Usual will be swayed by nothing other than the reality of the insolvency itself, and I do not write for them. Nor do I write in the hope of forestalling the disaster, for the trajectory of federal spending and deficits has been set and is politically irreversible. I write for the practitioners of government at the state and local levels, for they are the ones to whom society will turn when the federal government fails.

The most important thing that the commonwealth of Virginia can do over the next two decades is prepare itself for the day the federal spigot runs dry: when Medicare, Medicaid and Social Security payments are drastically curtailed, when the flow of military dollars into the state can no longer be supported, when discretionary federal spending on everything from schools and housing to earmarks and corporate welfare are not merely hacked to the bone but amputated outright.

Those are not topics that our two gubernatorial candidates, our congressmen nor anyone else in a position of power wish to talk about. Therefore, the job falls to the citizenry. We can see the hurricane coming. We have a choice. Like our political leaders, we can sit on the front deck of our beach house, pop open a cool one and remark upon the rising wind and waves. Or we can start nailing the plywood over our windows and moving the furniture to the upper floors.

In the next post, I will explain how unsustainable U.S. fiscal policies will inevitably bankrupt the federal government and why, when things unravel, they will do so with surprising speed.

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31 responses to “The Hurricane Winds Gather”

  1. alright.. I'll start the ball rolling:

    what do you think about this:

  2. James A. Bacon Avatar
    James A. Bacon

    Larry, those are very interesting numbers, but in any discussion we have to make sure we're comparing apples to apples. The Wikipedia list is *external* debt (owed to foreigners), and it includes public and private debt. Basically, what it shows is there's a lot of cross-border lending in the world.

    My argument is that it's the sovereign U.S. debt that's heading for big trouble. The U.S. Treasury Department web site periodically updates the total debt, and the total debt owned by foreigners, for U.S. treasuries. Those will be the numbers that I cite (when I get to it).

  3. E M Risse Avatar

    As most know, we approach the future from a different perspective than Jim but believe he is right on with his major points here.

    Two primary concerns:

    One, it is not “states” that must get ready for the Fundmenatl Transformations.

    States are 18th century entities that have little relevance in the 21st century. Regions (MegaRegions, New Urban Regions and SubRegions) are the important entities.

    New Urban Regions are the primary building blocks of contemporary economic, social and physical reality.

    The role for states in the Fundamental Transformation Jim calls for?

    Use their reserved powers to establish functional governance structure at all levels from the MegaRegion to the Cluster and then get the hell out of the way.

    The second problem is the use of the word “local.”

    Local is a Core Confusing Word. Municipal is more clear but as currently framed municipalities are as out dated as states.


  4. Anonymous Avatar

    EMR – It sounds as if you would recommend that Congress call a constitutional convention to redraft the basic rules. Absent a major change in our governing structure, I don't think that your ideas, which I'll assume are valid for purposes of this discussion, can have any impact. Am I wrong?


  5. I start with the premise that perhaps EMR is correct and then proceed to the "how would this happen" part and that's where things look not so changeable.

  6. Freddy Boisseau Avatar
    Freddy Boisseau

    I am all for this. Not only does our state have to prepare for this day, but so do our cities and counties. We need to make our local elected officials aware that they need to separate our communities from the Federal and State Budget strings. We need to do this both because those funds will dry up, but also to maintain our freedoms. Breaking this dependence is the only way to get our schools, police and other services back under our local control. We need to stress this to our friends and neighbors. Be honest with them, that it will be hard, but it has to be done.

  7. E M Risse Avatar

    EMRs reading of the federal and state constitutions tells him that the reserved powers give real leaders five years worth of Fundamental Transformations.

    That is about how long it will take to bring citizens up to speed so they can make intelligent decisions in the voting booth (to write new rules) and in the market place.

    EMR has sketched out a process in the Transport post that is not unlike the basic thrust of what one state has implemented based on legislation EMR drafted in the late 1960s.

    It is also similar to the ideas sketched out for Richmond in a BR column on 16 Feb 2004.

    The problem is that few yet understand the gravity of the problem and the scope of the needed change as Jim Bacon has stated.


  8. There is simply no chance that the change being discussed on this thread will occur as a result of voter education. The issues are too complex and the voters (by and large)are too self-absorbed. I think that only a full crisis will spur the politicians to action. This year's governor race is emblematic of my point. Neither candidate addresses fundamental change. In fact, neither candidate addresses the day-to-day issues that must be solved in order to continue business as usual.

    The problem is one of visualization. Nobody on this board (or any other that I have seen) can put the problem into sufficiently compelling terms to sway an average voter. Jim Bacon is a good writer in a very intellectual way. Consider this sentence – "Instead of agitating for an expansion of the welfare state and acceleration of deficit spending, you should devote your energy to avoiding the fiscal cataclysm that will reduce America's social safety net to tatters and cause incalculable pain for those who rely upon it.'. Very clever words. But a long way from visualization. Would an average voter be swayed by that sentence? Jim has the right idea but the words are too abstract. How does that "incalculable pain" feel to the common voter of … say … 2020?

    EMR is in the same boat. Here's a good statement from Dr. Risse, "Every other component of the ‘plan’ is just as ill conceived because the AntiPlan has nothing to do with the future needs of Virginians’ with respect to Mobility and Access.". How does the average voter suffer in the coming mobility and access crisis? Is it just longer lines at the off-ramp during the daily commute?

    Now, don't get me wrong – I am not claiming that my writing causes understandable images to spring forth in the active imagination of the average voter.

    What we need is "Mad Max Meets the Old Dominion". Or, a take off on Aldous Huxley's Brave New World. We need an entertaining dystopian novel (to become a screenplay to become a movie) which dramatizes the plight of an average Virginian in the apocolyptic future. Keep as many logic lines open as possible – show how the average Virginian ended up in the predicament. But, above all else, make it entertaining. It can't be happy (think One Flew Over the Cuckoo's Nest) but it must be engaging.

    How do we do this? How do we convert the millions of words and thousands of thought that have been expressed on Bacons Rebellion into a story that many will read? How do we appeal to the average voter rather than to policy wonks?

  9. psssttt..

    if you want to start a war down HR/TW way..just say the words "Regional Government".

  10. sometimes.. there seems to me to be an undercurrent thought – that what we need is for someone who cannot be "unelected" to force the "right way" …

    sometimes is seems rooted in the fact that the Constitution never intended to [fill in your own govt outrage] but then right behind that.. is the idea that we need strict constructionists – who can't be "unelected"… a strange inconsistent view of that same constitution that held dear – the concept of one man – one vote.

    Even Thomas Jefferson made note of this: “A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.”

    but then of course he also said (and this is forever etched in stone at his memorial):

    ""I am not an advocate for frequent changes in laws and constitutions, but laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times. We might as well require a man to wear still the coat which fitted him when a boy as civilized society to remain ever under the regimen of their barbarous ancestors."

    anyhow… enough blather…

    I like the idea of:

    1. – absolute right of citizen-initiated referenda – let's get rid of the stupefying artifacts of the Party of Pocahontas (notice how that plays in Grovton's wants).

    2. – On any ballot – that we include "none of the above" and the seat goes vacant until a candidate gets more votes than "none of the above".

    I think these are things that could set off a cascade of fundamental change but EMR ought to be careful what he wishes for….

  11. Strict constructionists on the US Supreme Court have no problem with changing the US Constitution. However, they believe that the Constitution should be changed using the process that is definied in the Constitution. That process is NOT the imputing of imaginary terms and concepts in the Constitution so that the judicial branch can legislate. There is no right to privacy in the Constitution and the words "separation of church and state" do not appear in the original text or in any amendment, These were concepts applied by Supreme Court justices who decided that they needed to become unelected legislators in open defiance of the very constitution they pledged to uphold.

    As for Jefferson quotes – he frequently wrote something in one period of his life that directly contradicted something else he wrote in a different period. Here's another quote:

    "We may consider each generation as a distinct nation, with a right, by the will of its majority, to bind themselves, but none to bind the succeeding generation, more than the inhabitants of another country.".

    By that logic, the Constitution should be re-written every 19 years (the generally accepted definition of a generation during Jefferson's day).

    However, if it's quotes you like …

    "The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.".

    "No free man shall ever be debarred the use of arms.".

    "It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.".

    "Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains.".

    "My reading of history convinces me that most bad government results from too much government.".

    "I own that I am not a friend to a very energetic government. It is always oppressive.".

    "I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.".

    And my favorite non-Declaration-of-Independence Jefferson quote of them all:

    "If the present Congress errs in too much talking, how can it be otherwise in a body to which the people send one hundred and fifty lawyers, whose trade it is to question everything, yield nothing, and talk by the hour?".

  12. I like em.. thanks for sharing them…

    but I felt sure you'd have something to say about the Pocahontas folks knowing what is best for Virginia and it's certainly not home rule for NoVa.

    is that in the Va. Constitution?

    geeze – look at this:

    "… The taxpayers invoked the "Dillon rule", a restrictive interpretation of local government power that was established by the 19th century judge and legal scholar, John Forrest Dillon, and adopted by Virginia as well as many other states. The Dillon rule stated that local governments only had the powers expressly conferred upon them by statute and those necessarily implied; these powers were furthermore to be strictly interpreted. Judge Benjamin N. A. Kendrick agreed with the taxpayers that the County's benefit plan violated the Dillon rule, and granted the taxpayers' motion for summary judgment. The County appealed, and the Virginia Supreme Court affirmed the Circuit Court judgment."

    The Dillon Rule is not in the Va. Constitution?

    it's one of those judicial made-up laws?

    Groveton -is your man McDonnell going to deal with this outrage?

  13. The Dillon Rule isn't in any state constitution. It is based on an 1868 case in Iowa decided by Judge Dillon. It was subsequently amplified by in two Supreme Court decisions which referenced the Iowa case. Dillon's Rule is that localities have no political power unless that power has been granted by the state. He bases that opinion on the fact that the US Constitution is silent as to the rights of localities.

    So, localities have no rights as the default position. That lack of power doesn't have to be written into any state constitution. It is the default assumption. However, a state constitution can be amended to provide for localities to have some form of home. Most states have provided for this althoug the degree of home rule varies from state to state.

    I believe that Virginia should amend its constitution to provide for some rights to be held by localities – whether they are cities or counties. I think the part-time Gneral Assembly has proven itself incompetent to hold all the cards over the last 5 – 10 years.

  14. Then THIS is the PERFECT ISSUE for MR. McDonnell to win the hearts and minds of NoVa not to mention putting behind him that embarrassing thesis he penned.

    what say you Groveton?

    McDonnell for Home Rule!

    has a nice ring to it…

    even EMR might like that.. first step in fundamental change and all that rot – right?

  15. The only candidate operating outside the status quo was Terry McAuliffe. He specifically addressed a dillution of Dillon's Rule in his campaign.

    I am afraid that neither Deeds nor McDonnell will address anything as fundamental as Dillon's Rule. I think McDonnell has a better vision for the future than Deeds but it's a D+ vs an F.

    Tim Kaine didn't get anything done in the last 4 years. Neither of these guys will get anything done in the next 4. McDonnell will sell the ABC stores. Everybody will remember that. I can hear myself now, "Back when I was your age the state owned all the liquor stores….".

    I think the seminal election in Virginia politics will be 2011. The US Census and resultant re-districting will be done. The current crisis will have intensified quite a bit. Voters might be ready for some serious change.

  16. FUNDAMENTAL CHANGE = getting your Bombay at the local 7-11 like they can in WVA.

    I'm not convinced (yet) that nothing of any consequence will happen in the GA even though Kaine is on his way out and McDonnell (probably) coming in.

    I think the issue of NoVa and HR/TW being able to become somewhat more self-sufficient on transportation taxing might emerge.

    The conventional wisdom seems to be that a Regional Taxing Authority is "illegal" but look at how VRE is funded.

    A 2% tax of member jurisdictions who choose to join the Authority (though they call it a commission) .. then 1/2 give or take goes to operate VRE and what is left over goes to the member locality.

    What could not that tax be boosted to say 4% with the acquiescence of the same (heavily NoVa) members?

    or why not create a second authority modeled after the VRE authority?

    or they could go the old fashioned way where an authority is formed to provide infrastructure/services – like a regional library or jail system and each member jurisdiction funds their share of it?

    I think if NoVa really wants something along those lines – the GA might be inclined to give it to them.

    I note also that a group is suing the Dulles Airports Authority claiming that tolls on the Dulles Tollroad have already paid back the construction costs and now functions as a de-facto tax.

  17. Anonymous Avatar

    I just need to defend old Judge Dillon. A few years ago a number of us were talking with Vince Callahan. Someone asked Vince about getting rid of the Dillon Rule. We were told that there was a proposal before the constitutional commission that met in the late 1960s and was established at the behest of Miles Godwin to eliminate or at least substantially weaken the Dillon Rule. The commission asked the views of local government officials whether they wanted rid of the Dillon Rule.

    And the answer was "no." The Dillon Rule provides local officials an easy excuse for failing to do what their constituents wanted. Keep in mind that the state religion of Virginia (at least since slavery was abolished) is Developer Worship. As in Gerry Connolly to John Foust and Pat Herrity. "You guys better watch it. The big landowners and developers don't like the way your are talking or voting."

    With the Dillon Rule in place, Connolly or anyone else could say "Gee, I'd like to XY or Z, but the Dillon Rule won't let me." Take away the Dillon Rule and then the Connollys or Bulovas suddenly no longer have an excuse to justify their giving away the store to the Developers.

    I too liked some things that Terry McAuliffe said. I met him at a meet and great last February. I got to listen to him and talk with him. I told him that, from what I see, the biggest problem facing NoVA is over-development and that he would be sure to win the primary and probably the general election if he supported an adequate public facilities law. He hemmed and hawed. As we all know, he didn't take my sage advice and didn't win.

    Now clearly his and McDonnell's other big issue — jobs, jobs, jobs — is in the forefront. But APF is a winner in NoVA. It's even more important than the Dillon Rule.


  18. The Dillon Rule and Proffers.

    apparently this is a move afoot in the GA to do away with proffers and replace it with a state-mandated impact fee which if you believe the developers needs to be quite a bit lower than the outrageous proffers being charged….

    some of this … appears to be …tangentially related to the 3202 legislation that required localities to designate areas where they would be require to provide infrastructure for density – UDAs Urban Development Areas.

    so.. if you put 2 and 2 together.. you get a rule that says that you must allow a certain level of growth and you must provide the infrastructure necessary to support it.

    TMT ought to like this concept.

    it's sorta the developer version of adequate public facilities but I but not exactly what TMT had in mind.

    So far.. my county's response to this has been to wonder what happens if such areas are simply not designated.

    Would the State send a team of developers (disguised as planners) .. to pick out an area and designate it for development?

    I see lots of potential fun and games here…

    I'm not sure if Fairfax has to be concerned since the minimum density dictated for UDAs is 4du

  19. Anonymous Avatar

    "The last thing Virginia needs is more roadways for more Large, Private Vehicles."

    The last thing Arlington needs is more roadways for more Large, Private Vehicles, but Arlington is not Virginia.

    If creative obfuscation is key to the governorship, EMR should be a shoe-in.


  20. here is something else that I found interesting:

    "…. Article 2 authorizes any combination of counties and cities to consolidate
    into a single city, or a single county. Further, the article allows a county to consolidate with all of
    its towns into a consolidated county or city. (Code, §15.2-3520)
    (b) Initiation of Proceedings.

    (2) If the governing body of a locality fails to take
    the initiative in developing a consolidation agreement, the qualified voters of such locality may
    file a petition with the local governing body asking it to develop a consolidation agreement with
    other localities named in the petition and requesting it to petition the court for a referendum on the
    question of consolidation. A copy of the voters' petition to the local governing body is
    concurrently filed with the circuit court. The voters' petition must be signed by a number of voters
    equal to 15% of the votes cast in the last preceding presidential election within such locality. If
    the local governing body fails to develop a consolidation agreement within one year, the judge of
    the circuit court shall appoint a committee of five citizens of the locality to act in lieu of the
    governing body in developing such agreement and in petitioning the court"

    this is from:

    Commission on Local Government
    Commonwealth of Virginia
    (Incorporates changes through 2008 General Assembly session)

    and an attempt that failed:

  21. Anonymous Avatar


    Sorry, previous comment belonged to the post above.


  22. Anonymous Avatar

    "America's social safety net to tatters and cause incalculable pain for those who rely upon it."

    America's social safety net is he Departmnt of Defense. When it goes to tatters it will cause incalculable pain for those who rely upon it.

    Mainly, that will be foreigners.


  23. Anonymous Avatar

    Even Thomas Jefferson made note of this: “A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.”

    That may be the only thing Jefferson ever said that was flat our wrong. Governmnet has an obligation to protect the rights of minorities. Minorities have the same property rights as majorities and the goverments only legitimate reason for being is to protect property rights.

    That is why we have laws which restrict the rights of 51%. It is why those laws are written in such a way that they are difficult and slow to change.

    And it is why we need to get it right the first time around.


    I support "none of the above" on the ballot.

    I support the right of recall and and the right of referenda, but I'm not sure how you prevent referenda from becoming mob rule. Maybe referenda have to be ratified by the legislature. A referenda with overwhelming support would be hard to resist, but those with marginal support might be modified to insignificance.



  24. Anonymous Avatar

    Debt doesn't matter, in the final analysis.

    Too much debt will lead to massive inflation. But even if we are reduced to trading in wampum, those people invested in productive enterprises will be better off than those invested in unproductive enterprises.

    It is wrong to think that government is an unproductive enterprise. Inefficient, maybe, but unproductive, no.

    Let's suppose we pull th esocial safety net: cacel social security, medicare, and all forms of welfare. Put ourselves back in the Dickensian version of self sustainment.

    Those of us lucky enough will retreat to gated communities and have their own version of EMR's dooryard government.

    For a while.

    Does anyone honestly think we will be better off without the massive buying power the government has for social welfare?

    Talk about Mad Max. How many homeless bodies are you wiling to fight your way through to get out your driveway?

    Before you answer go try to exit the Metro station at 14th and K, and multiply that scene by a thousand.


  25. "Maybe referenda have to be ratified by the legislature."

    actually to change the Constitution of Virginia – is an arduous process .. and the last step for approval is a general election referenda…

    in other words.. the Constitution cannot be changed unless "mob rule" agrees.

    and… ironically.. you cannot change the "mob rule" rule without the mob agreeing to it.

    so the Constitution codifies "mob rule" .. agree?

  26. Anonymous Avatar

    If Bacon is right and Medicare, Medicaid and Social Security payments are drastically curtailed, what then?

    Is the state really going to step up and support all those programs?

    I don't think so, not as long as the mantra of no new taxes rule. Is Bacon advocating that the state raise taxes to fund a social security endowment that is fully funded?

    I don't think so. AndI also don't think we will stand by and let Dickens happen all around us.

    Consequently, Bacons prophesy must be wrong.

    4.99% of the population has 95% of the income and probably 99% of the capital. When they are up to their chests in aging, dying, diseased, and decaying bodies, then they will spend some of their money to clean up.

    But long before that happens, the 51% will vote to steal from them.


  27. re: self reliance

    most 3rd world countries will grant you the ultimate in self-reliance.

    If you have money.. you'd need a wall around your home and guards posted ..and when you travel – you'd do so with bodyguards.

    We could have an America like this if we wanted.

    but methinks if we went to a tax rate of 70% like some countries that Ray would be squealing like that fellow in Deliverance.

  28. re: the doom of the entitlement programs..

    first a data point –

    If you take the private health care system – and you project it out 10 years and you assume that neither premiums nor coverage will change what will happen?

    Answer – it will go bankrupt.

    Medicare – same answer

    Will changes be made?

    do Bears do it in the woods?

    Medicare (and SS) was designed for folks who were expected to croak at sixty-something instead of seventy-something…

    there are lots of ways to go about this – and they will.

    they do this is 30 other industrialized countries – at 1/2 at what we pay … 1/2 the impact on their GNP…

    .. and yes.. one of the answers might well be that your artificial hip won't be free and you won't get it until someone says you really need it.

    …and before we hear the "ration" word.. have we ever heard of the private plans "getting between you and your doctor" and refusing to cover something?

    private health care costs doubled over the last 10 years and are expected to double again in the next 10 years.

    Does that mean in 10 years, we'll also double the number o uninsured such that we have 1/2 of us covered?

    Will we then be at that dreaded "mob rule" tipping point?

    30 other countries pay 1/2 what we do for health care and 30 other countries have a longer life expectancy than us and a higher infant survival rate..

    so we don't have better health care for most of us and certainly not for the ones that don't have insurance at all.

    the only folks who get the best health care in the world – are the rich… the rest of us just pay for it.

    but we can't have that because it's….. s o c i a l i s m.

    we… as a society need to receive a commonsense kick in the rump.

    we must like seeing donation jars in 7-11s for 5 year olds.

  29. Anonymous Avatar

    "Agencies will be forced to provide Mobility and Access with more efficient shared-vehicle systems …"

    Yeah, well first they will have to invent one that is actually more efficient and serves as many places.


  30. WHO is going to "force" them?

    I think I missed that part.

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