Reality vs. ideology

Originally Published in the Frederick News-Post

As I write, the number of people employed in Maryland hasn't changed since the end of the recession in June 2009.

Hundreds of well-paid people who work for Constellation Energy Group in Baltimore will soon be relieved of their duties when the company's merger with Exelon Corp. finally goes through, and will find no place to go to in the city and likely the state. Meanwhile, the state recently gave a $9.5 million loan to beg Bechtel Power Corp. to stay put in Frederick. As state Sen. David Brinkley, R-Frederick, said earlier this year of the deal, "It's a sad state that the state has to bribe a company with a loan to stay here."

Very sad. And the problem is that those in power act as if everything is OK. Gov. Martin O'Malley, when he is not traveling the country, the globe and the D.C. talk show circuit as head of the Democratic Governors Association, talks about how much better off Maryland is than the rest of the country. All that is needed is a "balanced approach" to fixing the economy and the budget in his mind. Those who earn a living from government, including public employee union representatives and nonprofit leaders, many of whose organizations would not exist without government funding, repeat his claims.

According to MarylandReporter.com, one of those nonprofit leaders, Jon Shure of the Center on Budget and Policy Priorities in Washington and a Bethesda resident, said last week of our state of affairs, "You don't have a spending problem, you have an income problem."

The issue for Mr. O'Malley and his fellow big-government travelers is that not enough people are working and making enough money to support their worldview.

The overall state budget is 14 percent larger than in 2008, when O'Malley submitted his first budget as governor.

As mentioned above, however, the number of people working in the state is just now starting to stabilize and grow again since the recession ended. And those who do have jobs are not in a position to give more of their income to government.

As Michael Snyder writes in his well-researched Economic Collapse Blog, one out of three Americans couldn't pay their mortgage or rent next month if they lost their job. He also cites a study from the BlackRock Investment Institute showing that household debt is 154 percent of personal income. That snapshot is worse than that of the federal government, where debt is 100 percent of gross domestic product.

If Maryland is going to solve its ongoing $1 billion-plus budget deficits, it needs to increase the tax base instead of trying to squeeze more from a smaller number of poorer people. Those who think otherwise live in a stilted reality driven by ideology rather than one based on revenue the state can collect. The fact that so many people in power believe that government spending should be disconnected from economic reality speaks to how far we have yet to fall.