In “How to Cut the Budget” I suggested that we cut 10% per year for 5 straight years to get back to a balanced budget.  If you listen to those entrenched in the system, you would believe that this is impossible.  Not the 10% for five years.  Just cutting 10% once is impossible, they say.  I actually think they are right.   If they are unwilling to do things different from what they have in the past, it may well be impossible.  However, if they are willing to try something different, they just might find that it can be done.  Witness Sandy Springs, Georgia……

Two things in the video that struck home with me were:

None of their employees have “defined benefit” pension plans, only “defined contribution” or 401k plans.  The cost of “defined benefit” plans is driving up the price of government as fast as anything.  It may not be easy, but every government at every level could get an actuary to determine the cost to convert from defined benefit to defined contribution.  They could then set a standard as to how much can be contributed in the future to the value currently held by each employee and start the transition.  The cost would begin to go down immediately and would accelerate in its downard cost push for many years to come.  It would then be possible to budget.

Second, was the statement that ” the difficulty is……..simply the political situation.”  The real barrier to running effective governments is not a lack of ideas.  The Public-Private Partnership Model is just one idea.  It is not a lack of skills.  It is not even a lack of desire.  It is politics.  Public Employee Unions don’t want to lose power.  Politicians don’t want to lose power.  Those entrenched in the system don’t want change.  That is a tough hill to climb, but, with the political will, it can be done.