My Gift to the U.S. on July 4th: fairy tax dust

An email from a friend from last week:

In the US the state of gov't finances is really grim, massive budget deficits that by law have to be balanced - talk of states like California going bankrupt unless bailed out by the Fed gov't which would unleash a floodgate. Warren Buffet spoke about this last week, saying that after the feds bailed out Wall Street banks it would be inconceivable that they would refuse to bailout a state - good point. And many US voters, in their populist uprising wisdom, have voted in laws essentially giving legislators no decent options for raising revenues, so it's cuts cuts cuts. Not long ago I read that US voters have been convinced - by the Tea Party, Republican types (and then embraced by a lot of Democrats) that they pay high taxes and don't get enough from their government when in reality they have one of the lowest tax rates in the developed world - so there is a huge ideological wall they have to climb before they can deal with this mess they have created. As Buffett quipped, he pays less tax than his secretary.

After reading this cheery email, I came upon a remarkable article in the NY Times titled Illinois Stops Paying Its Bills, but Can’t Stop Digging Hole.
Two paragraphs:
For the last few years, California stood more or less unchallenged as a symbol of the fiscal collapse of states during the recession. Now Illinois has shouldered to the fore, as its dysfunctional political class refuses to pay the state’s bills and refuses to take the painful steps — cuts and tax increases — to close a deficit of at least $12 billion, equal to nearly half the state’s budget.

...From suburban Elgin to Chicago to Rockford to Peoria, school districts have fired thousands of teachers, curtailed kindergarten and electives, drained pools and cut after-school clubs. Drug, family and mental health counseling centers have slashed their work forces and borrowed money to stave off insolvency.

My gift to the United States is an unlimited supply of fairy tax dust. When you toss it over lawmakers, it gives them the courage to raise taxes. When you toss it over the electorate, it gives them the wisdom to accept what is necessary.

Without this gift, you can launch all the fireworks you want but the country will still go nowhere but down.

For the complete article go here: http://www.nytimes.com/2010/07/03/business/economy/03illinois.html?_r=2&pagewanted=1&hp