Unions vs. Governors – A Preview of Bigger Battles

Charlie Sheen aside, the battles between public unions and the governors in states like Wisconsin and Ohio have been fascinating to watch. The really interesting thing about them is mostly ignored – they are a preview of things to come.

The battle in Wisconsin has become the media darling. You undoubtedly have a view on it because, frankly, it is pretty hard not to have one. You might be for the unions all the way. You might be for cutting back union benefits, but against removing their collective bargaining rights. You might be for just hammering the unions. I have my views like everyone else, but they are beside the point for purposes of this article.

The battle between the people and government that we are now seeing is one that will picking up pace in the next few years. Under the President’s budgetary projections, which are very optimistic, we will continue incurring annual deficits to the point where our total national debt will be roughly 90 to 100 percent of our GDP by 2020. These are figures where currencies and economies have imploded historically.

The crux of the problem, of course, is we will not have to wait until 2020 for the debt debate to start stirring major problems. States are slashing budgets as well all know and the federal government will soon follow. The current debate at the federal level regarding slashing 60 or 100 billion dollars is laughably pathetic. We are running a deficit of $1.6 trillion annually. The cuts being contemplated will only resolve 5 to 7 percent of the annual deficit while the total national debt just keeps piling up and up and up.

The simple fact is we have a looming national debt crisis. Instead of planning a soft landing by instituting budget cuts gradually now, we see no leadership out of Washington by either the President or Republicans. They debate how to slice a loaf of bread while the bakery is on fire!

No, the landing we face will be a brutal one. The changes to spending will need to be sudden, drastic and across the board. If you think we have protests now, wait till then when seniors are slammed on Social Security and Medicare while the military spending has to be cut back as well.

It will not be a pretty day. Even with the shenanigans of Charlie Sheen!

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