New Jersey’s Money Well is Dry; yet the Pumping Continues.

When the money is no longer there, it simply is no longer there.  This has become painfully obvious as governmental entities attempt to bring state, local, and school board budgets under control, and away from their unsustainably high growth trend.

A person would have to have been in solitary isolation, away from TV, newspapers, and the Internet not to have been bombarded by the news of fiscal chaos in many of our large states, much of which is related to underfunded public pension and benefit plans.  In New Jersey, such plans are reported to be in the red by tens of billions, with no imminent consensus for improvement.

The blame game is in full swing, as Garden State politicians point at each other and, in some instances, at the public labor unions themselves. The unions, not without cause, accuse Trenton of not having adequately funded their public pension plans for years.

Organized labor has a valid point in noting the fact that previous New Jersey legislators and governors let slip their funding responsibility.  However, what public unions don’t point out is that those plans were in serious need of structural reform long before the tsunami hit.

Trenton legislators and governors did not fund those plans because they knew that the cash wasn’t there.  Yet they steadfastly abstained from reforming them at a time when the pain might have been less.  It was a weak political decision, one that was deferred to the future for someone else to address at crisis stage.

Only the present Governor, Chris Christie – love him or hate him – has had the fortitude to put the issue squarely on the table of the New Jersey Legislature.  At least that body now seems to be responding, however discordant the relationship may be.  That’s more than can be said for the previous string of politicians who stuck their heads in the sand.

The economist Thomas Sowell writes that, “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it.”

“The first lesson of politics is to disregard the first lesson of economics”

In New Jersey, the salad days of ignoring the first lesson of economics are over.  There is no longer enough state income – if there ever was – to satisfy the ongoing demands for steadily increasing pay and benefits in the public sector.  The well is dry.