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Colorado Springs is a Model for the Rest of the Country

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A story to keep an eye on as the “Great Recession” continues to unfold is the city finances and cutback in services of Colorado Springs, Colorado. While many local governments and states are facing bankruptcy due to spending levels that cannot be met with dwindling tax revenues, the city that is home to the U.S. Olympic Committee is maintaining its low tax rates and living within its means. Colorado Spring’s experience just could have many Americans wondering why we rely on government for so much.

Now, I should fess up. I first heard of this story while watching the Ed Show hosted by far-left radio and TV political pundit Ed Schultz. I do occasionally like to amuse myself with the laughable commentary of the likes of Ed and his other MSNBC comrades Keith Olberman and Rachel Maddow.

Nevertheless, at issue in Colorado Springs was a desperate plea from city officials about 7 months ago to the voters asking for approval to raise taxes to pay for routine services. It was the same old story – the recession had caused a decline in tax revenues and the city faced a shortfall of around $24 million. Without an increase in the local sales tax, city services would have to be curtailed. With the result of the referendum, the people had spoken – city government, you will get no tax increase; do what you can with current revenue levels.

Unlike California, where for years the electorate demanded more from government without the obligation to pay for it, the good folks of Colorado Springs not only rejected higher taxes but took it upon themselves to remedy their own problem. Private citizens volunteered to pick up trash in parks. Swim clubs took over public pools. Churches and private organizations, like the U.S. Olympic committee, raised money to keep community centers and city fountains running. Admirably, one anonymous woman donated $37,000 to keep Nancy Lewis Park green and clean. Of course, Ed Schultz neglected to report these positive facets of the story, dwelling instead on how aghast he was that voters would vote down tax increases to fund non-essential government services like museums, parks, and pools. As a good statist it is inconceivable to him how normal people could live without being dependent on government for these needs.

And that should be the question raised by Colorado Springs’s experience – why do Americans rely so heavily on government even to the point of extreme bankruptcy for needs that could be taken care of by the private sector? Perhaps it’s because we have been so socialized by public schools, the so-called mainstream media, and the likes of Ed Schultz to believe that our greatness comes from government and not from within each one of us as citizens. That’s why Schultz deliberately ignored the volunteerism and charity of the folks in Colorado Springs that confronted the budget cuts head on. Or maybe Americans have gotten so use to the Federal Reserve monetizing debt at the federal level that we have become oblivious to the limits of state power.

After all, Uncle Sam has run up over $13 trillion in debt with the help of the printing presses at the Fed, and it is hard to see how that has negatively affected our lives. But it has. All one has to do is buy one of those novelty cards that lists what things cost in the year of your birth. As I looked at the cost of a slice of pizza ($.15) in the year of my birth, I became incredulous since I had just spent $2.50 for a slice on Saturday. Why has the cost of things increased so much over time? It is because of the inflationary policies of government and the Federal Reserve in particular.

Government does have limits as we are seeing in this most recent economic crisis. Even when times are good, government at all levels feel pressure to raise additional revenue to cover the increased costs of services produced by the Fed’s inflationary policies. To break this endless cycle, Americans must wean themselves off their dependence on government. If some services cannot function without government subsidies, then perhaps they should be done away with. For instance, because budget cuts have forced the buses to stop running at 6:15 p.m.in Colorado Springs indicates that the bus line is not self-sufficient after that time (for the sake of argument let’s assume it is self-sufficient before 6:15 p.m.). After the budget crisis ends, why should the city spend money on running buses at night? Wouldn’t that be a misallocation of scarce resources since demand for bus service at night is not at the level where the bus line can at least pay its bills? Would a restaurant knowingly stay open beyond a time that is profitable? – Of course not. I know that restaurants and public transit are not exactly the same animal, but they are alike in that they both must deal with scarce resources. Like the restaurant owner, city managers must make decisions with the least amount of waste possible or face financial hardship.

User fees could be used for services like parks, pools, and libraries. Whoever said these services should be “free” anyway? Like the gas tax is to roads, fees to use parks, pools, and sign out books is more just than forcing homeowners to subsidize the leisure activities of others.

By cutting services that do not make economic sense and imposing user fees on others, could local governments drastically reduce taxes? Would this provide for a better allocation of scarce resources to more urgent needs? How many fixed-budget seniors would avoid losing their homes because of ever-increasing taxes? How many young homeowners, just starting out, would be able to afford health care if they didn’t have to pay for fountains, parks, libraries, and other non-essential services? As we have seen in Colorado Springs, would local citizens fill the void left by government?

These are just a few of the questions that need to be explored. On the other side of this current economic crisis the American people are going to have to change and come up with more creative ways to operate. The system is broke and broken at all levels of government. Colorado Springs could offer a glimpse of what is to come. We should all stay tuned to this unfolding story for the good and the bad aspects of it. That’s assuming the mainstream media and the Ed Schultz’s of the world report it accurately.

 

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About Kenn Jacobine

  • Baronius

    Interesting article, Kenn, except for the rote criticism of the Fed. (You don’t have to hit the same notes in every song, you know.) What you wrote about is a really interesting and largely unnoticed story, with a good political moral. Nice job.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    I do wonder if it’s all wine and roses in Colorado Springs, as Kenn depicts. Will have to look into it a little more.

    There certainly are many creative ways for local governments to make the tax dollar stretch. Kenn mentions public libraries, and it’s worth noting that libraries have for many years subsidised the continuing provision of free book borrowing – which in many locales is a legal obligation – by charging fees for a range of peripheral services such as photocopying, video and audio lending, internet access and inter-library loans.

    In the same way, unprofitable but vital public transit routes can be and often are subsidised by those which are profitable. I’m not prepared, as Kenn is, to simply assume that no-one needs to use the bus in Colorado Springs after 6:30. It’s more likely that the city arbitrarily chose that time as a cut-off.

  • John Wilson

    Of course, the first and most important government expenditure to suspend is subsidies to businesses. The only reason for ANY subsidy to a business is the hope that eventually the benefit will trickle down to employees. In our capitalist system businesses should succeed or fail on their own. Yet we repeatedly grant tax subsidies and outright gifts to various businesses and business organizations.

    In California we try to bribe movie companies to stay in the state with 100s of millions of dollars, and other states bribe them too, in a useless waste of tax money by all states.

    50 years ago we didn’t have these local budget problems and we had swimming pools, libraries, transit systems, etc., but then we decided that every expenditure had to run through some company. Privatization is killing us.

  • Baronius

    Dread, your objection to the article is that you don’t have any information about the subject, so maybe Kenn is wrong? That’s a bad hill to make a stand on.

  • Kenn Jacobine

    Baronius,

    It’s just that Fed policies affect most everything that is going wrong in the country.

  • http://takeitorleaveit.typepad.com roger nowosielski

    It would seem that Dreadful’s objection touched upon one point and one point only, not the general tenor of the article.

    To object to that one objection is a bad hill to make a stand on.

  • Baronius

    Kenn – That may be true, but it’s alienating.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    Baronius, I don’t believe that scepticism is in any way a bad hill to stand on. I’m not saying that Kenn is wrong, just that depictions of Utopia generally turn out to be anything but.

    Just in reading the Durango Herald article Kenn links to, I note that streetlights are being turned off in Colorado Springs to save money. But not to worry. Undaunted, the city’s residents are voluntarily paying extra to have them switched back on outside their homes.

    Those who can afford to pay, of course.

  • Kenn Jacobine

    “Alienating”? To whom? The tone of my piece was to study the situation in C.S. I wasn’t implying that it was a utopia. In terms of street lights, having lived on four different continents, I haven’t always had them and didn’t necessarily miss them. Americans do have this birthrite mentality about a lot of things. I guess my view from abroad has taught me that some things that we feel are necessities aren’t. You only realize that when you live without them.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    The streetlights are an illustration. It just strikes me that under Jacobinesque idealism, it always seems to be the already-haves who come out on top.

  • Kenn Jacobine

    Dr. D.

    Do you really think that streetlights are more important than somebody having health care? Economics is about scarce resources and folks need to set priorities. Hell, I would love a new Mercedez but I need a new roof on my house instead. As a responsible citizen I am going with the roof since needs win over wants with me. Too many people in America buys wants before needs, find themselves in trouble, and turn to the rest of us for support. America is bankrupt because of this and so at all levels of government we must prioritize our spending to meet our needs. For instance, turn the lights off, which aren’t necessary anyway, and put the money into police and education – which are essential needs.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Jacobinesque?

    Let’s not confuse it with the Jacobins and the Reign of Terror. Kenn would turn in his grave.

  • Jordan Richardson

    Yep, poor people are poor because they bought sports cars before food. You got that whole poverty thing pegged, Kenn.

  • http://www.joannehuspek.wordpress.com Joanne Huspek

    I was drawn to your article since I grew up in the Springs. The first paragraph says it all – they live within their means, or are trying to. That’s the difference between here (Michigan) and there. We’re still in the mindset that government should pay for everything and we should have everything.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    Kenn, if we extend your own argument to its logical conclusion, we need to consider that most countries did not have an organized police force, nor a comprehensive education system, until comparatively recently; some still do not. So those aren’t strictly essentials either.

  • Kenn Jacobine

    Dr. D.

    I do believe that police protection and a court system are fundamental essentials. I suppose they could be done privately as well. Education in my view is a societal essential, but done better by the private sector.

    The problem of course with countries, most of the developing world, that do not have police and/or education systems is that it keeps them underdeveloped. There is not an educated workforce and a government system that protects private property. Thus, local entrepreneurialism is almost non-existent and when it exists usually bribes and other perks are required to protect it from corrupt government officials.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    Kenn, you’re most likely right about the private sector doing education better, but unless there’s some sort of reining-in of the for-profit aspect of private enterprise, we just end up with the same conundrum we arrived at with the streetlights: the kids whose parents can afford it get to go to the best schools (which also attract the best teachers because they can pay them more), while the rest end up in the crappy ones or without an education at all.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    As for the notion of privatised police, you can look at the favelas in Brazil for an idea of what might happen at the infra end of the spectrum.

    In Brazil, the police do not go into the favelas, partly through fear and partly because the favelas themselves do not officially exist. The drug gangs which control them do keep law and order of a sort, and the residents look to them for protection. But I doubt it’s all that comforting to rely on a group of guys who’re as likely to come back and shoot you tomorrow for not paying them as they are to actually take care of whatever problem you may be having.

  • John Wilson

    Privatisation seems to be a big failure. Where has it succeeded?

  • Kenn Jacobine

    John,

    In American industry.

  • John Wilson

    Kenn,

    Every industry in the USA is heavily subsidized by the government, either in tax favors or direct disbursements. Our capitalist system is propped up by taxation on individuals. That’s why business pays the Big Bux to bribe politicians and officials.

    We’ve been subsidizing US business since the Republic was formed. For example, we sent the Marines to beat the pirates to protect US shipping business. So when the railroads started they said “hey, you subsidize our competitors with boats so you have to subsidize us too”. So they did, and then the truck companies said “hey, you subsidize our competitors with boats and trains so you gotta subsidize us, too”. So we did. Then the airplane guys said “hey, you subsidize our competitors with boats and trains and trucks so you gotta subsidize us, too”.

    And so it goes.

    There is no corner of American business that hasn’t benefited from government subsidy.

    The whole damn thing is propped up and controlled by the federal government. We have a sovietized capitalist system.

    Look how the government snapped to attention and started doling out trillions when the financiers threatened utter collapse a couple years ago. Republicans and democrats alike were suddenly energized when their masters in the Wall Street suites made demands.

    Bush privatized the wars in Iraq and Afghanistan and although they both have cost and will cost extraordinary amounts of money ($1million per year per soldier, at least) we are losing them and have no prospects of winning. After 9 years. If Iraq is Vietnam plus privatization then it is a disaster.