Morris: Indiana Should Stick with the Red-State Model

July 26, 2013

by Leo Morris

Indiana can take a lesson from Detroit — the biggest city in American history to declare bankruptcy: Stick with your “red model” of governing based on restraint and fiscal discipline. Resist those who urge you to drift closer to the “blue model” of high taxation, profligate spending and unsustainable benefits.

Yes, there are many culprits in Detroit’s downfall, including the collapse of an auto industry that once dominated the world and the exodus of urban residents who made up the tax base. But let’s keep our eye on the ball. For each of the last five years, the city has spent on average $100 million more than it took in. Its $11 billion in unsecured debt includes $6 billion in health and other retirement benefits and $3 billion in retiree pensions for its 20,000 city pensioners.

How could Detroit not collapse? Look at all the other states and cities courting financial ruin — they all follow the blue model. And, of course, there is the best example of blue-model recklessness, the federal government, with a debt of $16 trillion and unfunded liabilities approaching $90 trillion. Heaven help us all when that financial house of cards comes crashing down.

We don’t hear much about impending-doom worries from red-model cities and states, because restraint and discipline work. If you don’t overspend, you won’t pile up the debt.

Of course, the tradeoff is that government does less for us, which means we have to do more for ourselves. That is the largest complaint of the blue-model advocates.

That complaining has been getting a little louder in Indiana lately with the announcement that the state ended the fiscal year with a structural surplus of $483 million, which was $93 million more than expected, and now has reserves approaching $2 billion. That’s no reason to celebrate, said House Minority Leader Scott Pelath, D-Michigan City: “Our unemployment rate still remains around 8 percent. Families are still struggling to keep their heads above water. Our local schools still must grapple with doing more with less. Their voices are ignored by the people who focus solely on numbers.”

Fine, that’s a legitimate point to make in the fiscal debate. When the state has more money than expected, it makes sense to reconsider some of the cuts that have been made. But that’s not the only thing to consider any more than “focusing solely on the numbers” is. Giving people some of their money back is also a valid consideration.

And staying financially healthy always has to be the goal. That promotes a good business climate, which provides what will most help suffering Hoosiers: jobs.

Leo Morris is editorial page editor of the Fort Wayne News-Sentinel. A version of this essay originally appeared as an editorial in the July 22 issue of the newspaper.

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