Taxes unavoidable answer

A year ago, one state was in serious financial trouble; now most are. The difference is that the federal stimulus bill is running out.

Apparently, it did some good after all. But the solution now being discussed is worth noting. A bill will be introduced in Congress to allow states to declare bankruptcy. Bankruptcy, of course, is a legal way of saying, “I am not going to pay my bills” and getting away with it. Just the discussion of such a measure will make government bonds, once the gold standard of investments, very insecure. Who wants them if they turn to trash?

States need money to pay the bills. That comes from taxes. Politicians have been “borrowing” money from retirement funds and using other tricks to make it appear that they were getting by without receiving enough taxes to balance the budget.

Unfortunately, it has passed the point of being solvable by spending cuts alone. In California, with the largest problem, eliminating the entire state work force would solve just one-third of the shortfall. If states don’t bite the bullet and agree to higher taxes, some rather draconian events await us.

Allan N. deLaubenfels

Spokane Valley