This picture is worth a thousand words:
Current debt is within the range of historical debt. How can you have a "crisis" when things are within a normal range? As Lav & McNichol point out, there is no structural crisis, it is purely a short term operating crisis because of the loss of revenue from a recession. Since recessions are transient, the revenues will return and the crisis will go away:
A spate of recent articles regarding the fiscal situation of states and localities have lumped together their current fiscal problems, stemming largely from the recession, with longer-term issues relating to debt, pension obligations, and retiree health costs, to create the mistaken impression that drastic and immediate measures are needed to avoid an imminent fiscal meltdown.It looks like I've been suckered by the right wing yet again. They have a way of framing an issue in a way that gets you to buy into their vision of America (have to slash social spending because times are "tough" and "tough decisions" have to be made). But as Lav and McNichol point out, that viewpoint disappears when you take a different perspective.
The large operating deficits that most states are projecting for the 2012 fiscal year, which they have to close before the fiscal year begins (on July 1 in most states), are caused largely by the weak economy. State revenues have stabilized after record losses but remain 12 percent below pre-recession levels, and localities also are experiencing diminished revenues. At the same time that revenues have declined, the need for public services has increased due to the rise in poverty and unemployment. Over the past three years, states and localities have used a combination of reserve funds and federal stimulus funds, along with budget cuts and tax increases, to close these recession-induced deficits. While these deficits have caused severe problems and states and localities are struggling to maintain needed services, this is a cyclical problem that ultimately will ease as the economy recovers.
Unlike the projected operating deficits for fiscal year 2012, which require near-term solutions to meet states’ and localities’ balanced-budget requirements, longer-term issues related to bond indebtedness, pension obligations, and retiree health insurance — discussed more fully below — can be addressed over the next several decades. It is not appropriate to add these longer-term costs to projected operating deficits. Nor should the size and implications of these longer-term costs be exaggerated, as some recent discussions have done. Such mistakes can lead to inappropriate policy prescriptions.
This is the heart of political dialog. In honest debate, each side sees the same facts from a different perspective. The argument then comes down to which perspective is "right" or "most useful" for dealing with reality. This is a civilized debate and it can linger because it is genuinely hard to know which perspective is right for the problem at hand.
But the right in the US has long ago given up on rational debate. They bend and twist fact, they systematically misrepresent in order to "sell" their solutions which generally come down to give more tax breaks to the rich while removing any social amenities or social assistance to those in the bottom 99% of the population. The viciousness of this "sales job" is what makes politics ugly. The guys selling it know they are selling lies, but since their jobs depend on them selling the lie, they sell it:
It is difficult to get a man to understand something when his job depends on not understanding it. (Upton Sinclair, 1878-1968)