President Obama didn’t discuss the nation’s massive, swelling debt in his State of the Union address. Mitch Daniels did, and good for him: the flood of red ink really is the Niagara. Our accelerating drift toard the cliff, moreover, entails not only fiscal and economic but also institutional and constitutional consequences of grave import. State and local debts are a comparatively small tributary to the great stream, but they illustrate the point. State and local debts are composed of about upwards of $4 trillion in unfunded pension obligations; upwards of a half-trillion in other pension benefit obligations (mostly for health benefits), also unfunded; and about $2.9 trillion in municipal (state and local bonds). These debts will not be paid (at least not in real dollars), because they cannot be paid. The question is how and to whom our federal system is going to administer the haircut—and what changes it is likely to undergo in the process. Today’s post deals with the background causes and conditions of state debt; tomorrow’s, with federal bailouts; Monday’s, with fiscal federalism’s future. (It’s not the EU. It’s Argentina.) Read more
Friday Roundup, June 1
- Don’t miss Jim Huffman’s excellent review here at Law and Liberty of Ralph Rossum’s The Supreme Court and Tribal Gaming: California v. Cabazon Band of Mission Indians.
- The Center for Class Action Fairness scores a victory in rolling back the class action settlement in Dewey v. Franklin.
- Austerity in Spain, they say, has led that nation to the brink of disaster. But what is the truth? Juan Carlos Hidalgo at Cato@Liberty looks at the data and argues otherwise.
- James Caeser on recovering political constitutionalism in the just released edition of the Claremont Review of Books:
Political constitutionalism consists of the public presentation of views of what is (or is not) constitutional policy, not just in a legal sense, but in a way that looks to the goals the Constitution was meant to promote and the kind of government it was designed to create. Political constitutionalism was once a concept widely understood. Virtually no one before the 1960s would ever have thought that courts should—or could—be tasked with resolving all, or even most, constitutional issues. Very few would have thought that the Constitution was exclusively or primarily a matter for determination by legal experts operating in a judicial setting. Instead, most would have expected something as fundamental as the Constitution to be defended by political means in a political context. Political constitutionalism, a concept that had no name because it was so much a part of the nation’s thinking, would have been seen as the main “instrument,” aided by judicial interpretation, separation of powers, and federalism, in maintaining the Constitution.
- George Will defends free speech against the Montana Supremes.
- Russ Roberts writes about the misery of debt at Cafe Hayek with a wise quotation from Adam Smith in his Theory of Moral Sentiments, “What can be added to the happiness of the man who is in health, who is out of debt, and has a clear conscience?”
- Joel Kotkin reminds in a new piece that much of European decline begins at home.
