Don’t Just Cut Spending, Cut The Shibai

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BY DANNY DE GRACIA II – Two weeks ago I was walking past a frozen duck pond in front of the Federal Reserve Building and saw a public sign that read: “Do not feed the animals. You will create a dependency that changes their behavior and alters their environment.”

I couldn’t help but wonder after reading that advisory that in the spirit of the same logic, there weren’t signs in front of the Fed or U.S. Capitol reading, “Do not stimulate the economy. You will create human dependencies that will change their behavior and alter the markets.” As we look across the United States but especially here in Hawaii to resolve the financial crisis, my advice to Governor Neil Abercrombie and the 26th Legislature is simple: don’t just cut spending, cut the government shibai.


While our elected officials and most of the local mainstream media seem to think that the most pressing problem to face Hawaii is the disproportionate gap between revenues and spending, I believe that is merely a superficial, presenting problem. The core problem is the belief that the solution to any problem on any given day is to give government a mandate to remedy it. Allow me for a moment to explain by taking you along memory lane.

My first exposure to Hawaii politics was in December 2005 when the average person had no fears about the economy aside from elevated gas prices and Hawaii’s state budget was showing a significant surplus. People were using houses as indicators of their wealth, Hummers bought with cheap credit were parked in air conditioned garages and at the State Capitol, everyone had ideas for how to plan the future.

As the committee clerk to the chairman of the House Human Services Committee, I was sent on behalf of the chair to an informal roundtable discussion with various community stakeholders and lobbyists who had needs they wanted the Legislature to address. Nearly every person prefaced their statements with “the state should …” and asked for either tax credits, subsidies or a law to stop someone from doing something they didn’t like.

As far as I can tell, nearly every idea that was requested in that room was introduced and later enacted into mandate. Fast-forward to the present day. Can you imagine how many other  “the state should …” magic genie wishes have been granted over the last six years?

Imagine the private compliance costs to all the new laws, the operating costs for agencies and departments to execute those mandates, not to mention the necessary appropriations and taxes to make it all work. Let’s just put it this way: in 2005 we had a budget surplus, but today – six years and $89,200,000,000 in spent tax dollars later we don’t.

The economist Ludwig von Mises observed that “All this talk – ‘the state should do this or that’ – ultimately means ‘the police should force consumers to behave otherwise than the would behave spontaneously.” We need to stop saying “the state should …” and start saying “the state shouldn’t.”

Nearly 52% of this year’s tax dollars go towards funding human services, public education and handling of the state’s budget and finances. By contrast, the amount spent on the Attorney General, public safety/defense and transportation – areas generally considered to be more traditionally core constitutional aspects of government – amount for only 11% of the budget.

This isn’t an issue of Democrat vs. Republican. This is an issue of self-control vs. government control. Our elected officials and those dependent on their favors would have you believe that if we terminated mandates, shut down whole agencies and cut spending that – to take license from former Treasury Secretary Paulson’s 2008 warning to Congress – there will people being eaten by lions in the street, the sky will fall and martial law will have to be imposed. Give me a break!  The only thing we have to fear by shutting down government is offending people with bad headlines.

It’s not higher taxes that Hawaii’s residents should be concerned about. That was yesterday. Forget the budget gap. Our state has all of at more than $26,111,383,024 in taxpayer exposure to debt – and the interest clock is ticking away. Do we really need government to be responsible and in control of everything?

Can’t we have the freedom to eat and drink without being penalized, start a business without paying for failing businesses, innovate without being regulated and most importantly of all, can’t we have the freedom to make mistakes and be the only ones who suffer the consequences of our decisions? Do we really need to destroy ourselves just to win one more election or earn a few extra cheers at a rally?

We’re either going to be free to own and enjoy private property or we’re all going to be servants to a 21st century form of plantation where the only private property will be your toothbrush or underwear. So elected officials, if you want to save Hawaii, don’t just cut the spending – cut the shibai.