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Saturday, July 2, 2011

A French Priest Predicted It All..Almost 200 Years Ago

Early in the 19th Century, a French priest named Alexis de Touqueville came to the newly created United States of America to study this new form of governance, democracy.  He wrote a book in 1835 called "Democracy in America".  His insights into the functioning of democracy were so prescient that his book is stilled used in university class rooms today.

His powerful insight was that the major problem with democracy is that the people have the power to spend more money on themselves than there is to spend!

This article in today's Washington Post validates de Touqeville exactly.

Minnesota government shutdown reflects widespread budget paralysis

There is a giant gap between what many of the world’s governments have promised and what they can afford. Now, the headlines from the across the United States and overseas show what happens when the clunky machinery of democracy goes about trying to close that gap.
The latest: The Minnesota government shut down Friday, locking families out of state parks on a normally busy holiday weekend after the Democratic governor and Republican-controlled legislature failed to reach agreement on whether to close a projected $5 billion budget deficit in part with tax increases.

Hours after a political impasse forced a widespread government shutdown, Minnesota's most vulnerable residents and about 22,000 laid-off state employees began feeling the effects on Friday. (July 1)
Hours after a political impasse forced a widespread government shutdown, Minnesota's most vulnerable residents and about 22,000 laid-off state employees began feeling the effects on Friday. (July 1)
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It is just one skirmish in the great reckoning of our age. The United States can maintain the retiree health benefits, costly wars, public pensions and social welfare programs promised to a generation of citizens. Or it can maintain the low taxes to which Americans have become accustomed. But it will be nearly impossible to maintain both.
Something has to give, and figuring out what that something is will be the crux of many of the great political battles happening around the world.
This week, thousands took to the streets in Greece to protest a plan to slash government services and public pensions and to raise taxes. The plan was passed by Parliament as a condition for the latest round of bailout funds. The riots that followed sent dozens to hospitals as a fog of tear gas hung over parts of Athens.
In Britain, 75,000 teachers and civil servants went on strike last week, protesting changes that could require them to contribute more to their pensions.
And in Washington, the Treasury Department confirmed Friday that the United States will hit its legal debt limit. The Obama administration and congressional Republicans remain engaged in a high-stakes standoff over what conditions will be attached to raising it. If they fail to reach agreement, the nation could default on its debt.
In the best of times, lawmaking can be as ugly as sausagemaking, according to the cliche. It is, therefore, unsurprising that reaching a new agreement on how to revise the social contract would require all the theatrics, street protests and brinksmanship evident in capitals around the world.
The challenge for policymakers against that backdrop is to reach agreement on that core question of how taxes and spending will be changed without causing too much collateral damage in the process.
In the standoff over raising the U.S. debt ceiling, the risk is that delays could cause global investors to lose faith in the government’s ability to honor its debts, potentially causing interest rates to spike and sparking a new financial crisis.
The details of the Minnesota government’s shutdown show what can go wrong when no agreement can be reached. Last week, a judge ruled that only core government functions — public safety, welfare programs, care for residents in state facilities such as prisons, preservation of the government financial system and necessary administration functions — would continue if the government were shuttered.
When lawmakers failed to fend off the shutdown, about 20,000 state workers were officially laid off.

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