Gov. Scott Walker (R-WI) will face a recall election tomorrow. What is driving the election: public-sector labor unions.
Walker–during his campaign–promised to curb the powers of public sector unions in order to bring the state budget into balance. He has kept his promise: like Gov. Chris Christie (R-NJ), he has taken on the teacher unions in order to make tough–bur necessary–spending cuts.
Teacher unions–and other public employee unions–are understandably angry. No one enjoys having their compensation frozen or cut. No one likes having their health benefits curtailed, or having to pay more of a premium for insurance than they did before. Especially given the price inflation that government keeps telling us doesn’t really exist.
Still, public employees, who–with few exceptions–produce nothing economically, must face the music: fairly or unfairly, their pension guarantees, and health care guarantees, are worth the paper on which they are written. Those promises are only as good as the power of the guarantor to deliver on them.
That power–once considered immutable–has sustained severe hits. And it’s not just in Wisconsin. California, Illinois, New Jersey, and Kentucky are all facing actuarial imbalances in their public employee pension systems. Where many states used stimulus money to plug holes in their budgets for the last 3 years, that stimulus money has now run out without real economic growth returning to pre-disaster levels.
Making matters worse, budgets were prepared–and promises were made–with the assumption that the revenue pictures would be better than they are.
As a result, you have three ways you can attempt to cover these shortfalls:
(a) raise taxes
(b) cut spending,
(c) some combination of (a) and (b).
(Yes, you can take out debt to defer current obligations at lower rates while you figure out the financial structure you wish to incorporate (a) and/or (b), but that only changes the amounts and/or degree that (a) and/or (b) are used. Ergo, I don’t list that borrowing as a separate choice.)
As for Gov. Walker, I hope he wins, even though–at best–he is a middle-of-the-road version of what needs to happen.
As for the people of Wisconsin: they will get the government they deserve. Gov. Walker has kept his promises, and done the prudent thing. If they reward him by removing him from office, then they will be telling the whole world that they don’t really care about financial responsibility.
If they reject the recall, they will be telling the whole world that they are not going to be intimidated by union dollars.