Personal Freedom and Prosperity 110: The Rule of Law:
A government with moral and legal authority promulgates written rules and universally, impartially and uniformly enforces those rules, which provides a predictable and stable legal order on which to base economic and personal decisions. The law prevails, not the proclamation or arbitrary decision of a ruler, government bureaucrat, enforcer (e.g., policeman) or judge.
ObamaCare: Cities and States want America to Pay for their Past Corruption and Incompetence
Democratically elected governments have failed horribly in America. As explained in Democracy’s Great Flaw, elected politicians curry favor with their voting constituents at the expense of future workers. Politicians give goodies to present voters – lavish pensions and retirement benefits – and make future workers pay for the unpaid and mostly unfunded, promised benefits. How big is the catastrophe? The New York Times reports:
A study issued this year by the Pew Charitable Trusts found 61 of the nation’s major cities wrestling with $126 billion in retiree health costs, all but 6 percent of that unfunded.
Openly, governments as diverse as Chicago, Detroit, Sheboygan County, Wisconsin and Stockton, California, and Harrisburg, Pennsylvania, intend to dump their pension debts into ObamaCare. Pff! The debt created and owed by these cities became the debt of every American taxpayer. ObamaCare magically shifted the cities’ past corruption and incompetence into the American taxpayer’s lap. As Dan Miller of Harrisburg said:
“I’m applauding Detroit,” said Dan Miller, the controller in Harrisburg, Pa., who added that in the future a similar plan might interest his city, where a state-appointed receiver is seeking to restructure hundreds of millions of dollars of debt. “I’m hoping that Obamacare turns out to be a great solution, and I would love for our city to have the opportunity to do that.”
Again, shifting the burden on every American taxpayer is expressed by an aid of Chicago’s Mayor Rahm Emanuel:
Sarah Hamilton, a spokeswoman for Mayor Rahm Emanuel, adding that most of the city’s retirees over 65 were already covered by Medicare. “We will ensure that they have all the information needed to navigate the options available going forward, while saving vital taxpayer dollars.”
More correct is “vital” Chicago “taxpayer dollars.”
Almost every city will attempt to shift the cost to all American taxpayers, as stated by the National League of Cities.
“The Affordable Care Act does change the possibilities here dramatically,” said Neil Bomberg, a program director at the National League of Cities. “It offers a very high-quality, potentially very affordable way to get people into health care without the burden falling back onto the city and town.”
Through Obamacare, insolvent cities are abrogating and destroying the rule of law, and the consequences will be very bad for America.
First, if this backdoor bailout of the cities prevails, the federal government will take on more debt. Consequently, tax receipts will be severely reduced for many other federal programs – education, welfare, roads, Medicare, defense, medical research and the rest.
Second, this will increase the power and control of the federal government, which inevitably destroys freedom and prosperity. Why? This scheme violates the rule of law and government’s duty to protect and honor contracts.
The solution is for these cities to follow the law and go through bankruptcy. Ultimately, the judicial process will decide how to reduce these terrible debts. Most likely, the bond holders will be wiped-out and municipal pensions will be reduced. Tragically, there will be harm, misery, and sorrow.
However, the ObamaCare bailout will quickly lead to more federal control and a further decline of our freedom and prosperity. Individuals, families, and communities will all become dependent on a central government. Federal taxes will need to be increased. Americans will have less power to utilize their money – to spend, save, and invest. The power and control of the federal government will further erode the essential elements that enable freedom – the rule of law and private property.
Private property and the rule of law facilitates limitless exchange of ideas and products, which fosters more knowledge and ingenuity. Competing ideas and products propels commerce, science, and art – and society advances. Restoring private property and the rule of law is essential to restore liberty and prosperity in America.
Detroit, Chicago, Illinois, Harrisburg, Stockton and the rest must go through the bankruptcy process. Otherwise the federal government will grow and the corruption and incompetence of big and centralized government will continue to destroy freedom and prosperity.