BY DANNY DE GRACIA II – As Neil Abercrombie prepares to take office as the seventh governor of Hawaii, many political observers and concerned citizens alike are wondering how his “New Day” reform strategy will be paid for. Abercrombie comes to the fifth floor of the capitol at a time when the state budget is already precariously cobbled together through a battery of triages and at the national level, the disparity between tax revenues and government spending has led to a budget deficit of $1.3 trillion just for FY2010 alone – estimated to reach $1.5 trillion by the end of the year – adding to the already whopping national debt of $13.7 trillion.
According to Abercrombie’s “A New Day In Hawaii” campaign white paper, “An Abercrombie Administration will use its relationships and knowledge of Washington, D.C. to capture hundreds of millions of dollars left on the table for projects in transportation, housing, healthcare, education, energy, environmental sustainability, technology, agriculture, and small business” (p.8). Unfortunately for Abercrombie, since he resigned from the U.S. House of Representatives to campaign for governor, he undoubtedly missed this year’s June 9 hearing of the House Budget Committee in which Federal Reserve Chairman Ben Bernanke warned, “Our nation’s fiscal position has deteriorated appreciably since the onset of the financial crisis and the recession … Even after economic and financial conditions have returned to normal, however, in the absence of further policy options, the federal budget appears to be on an unsustainable path. A variety of projects that extrapolate current policies and make plausible assumptions about the future evolution of the economy show a structural budget gap that is both large relative to the size of the economy and increasing over time.”
Abercrombie’s exit from Washington also caused him to miss last week’s Nov. 10 announcment by the National Commission on Fiscal Responsibility and Reform in which President Obama’s experts released a document warning that “It Is Cruelly Wrong to Make Promises We Can’t Keep” and proposing staggered cuts in spending starting with $69 billion dollars in 2012 to as much as $3.8 trillion in cuts by 2020. The Commission went on to say in its report, “America cannot be great if we go broke. Out economy will not grow and our country will not be able to compete without a plan to get this crushing debt burden off our back.” Cutting all forms of spending, scaling back subsidies, repealing tax credits and most of all increasing the gasoline tax, the panel’s proposals would appear to be incompatible with Neil Abercrombie’s plans for relying on Washington to float the already deficit sinking State of Hawaii.
So how then will Abercrombie and the State Legislature fund this “New Day”? Most political pundits seem to forecast more furloughs and higher GET taxes are the most likely answer, but I say forget about those, that was yesterday … there now are other more terrifying possibilities and exotic temptations available to our new elected officials:
Creation of a local State Owned Bank
House Concurrent Resolution 200 (2010) asked the Legislative Reference Bureau to begin laying the foundations for a state owned bank by researching its feasibility. Several candidates who ran for office this year even made state owned banking part of their campaign platform. The theory is that the state can simply make loans to whomever it pleases and play with interest rates as a means to provide unlimited funding for public projects, unlimited tax revenue and unlimited private investment. In case our state legislators missed it, at the national level the FOMC has already tried that and failed miserably by holding the funds rate at a range of 0 to 0.25% since December 2008. So bad is the continuing financial crisis that the Federal Reserve has recently announced that it will purchase upwards of $600 billion in Treasuries in an attempt to stimulate even more risky private and public spending alike.
As any student of Thomas Paine knows, “money is money, and paper is paper” – if the state of Hawaii takes hold of the power of public fractional reserve banking, local inflation will skyrocket, causing greater public and private debts alike, higher prices and more corruption throughout all levels of society.
The other draconian alternative that is available to legislators is to mimic at the local level a proposal already gaining ground both nationally and internationally: using the fear of global warming as a pretext to enact a tax against carbon footprints for the expressed purpose of raising revenues. Abroad, European Council President Herman Van Rompuy has already stated that the carbon tax is a perfect vehicle for funding the European Union, setting the precedent for funding things “out of thin air” at the public’s expense. Here in America, the city of Boulder, Colorado implemented a carbon tax in 2007 and voted to raise it again last year, garnering $810,000 from the public to fund government. Don’t think for one moment it won’t come here to Hawaii. As it is, Senate Bill 1233 (2009) spoke of an apocalypse in which “the Pacific ocean may innundate most of Waikiki, the business district in Honolulu, and coastal resort areas on other islands” and used that as a justification to propose a rigid carbon emissions control here in Hawaii. That bill won’t be the last attempt. It would not be a far reach of the imagination to suggest that the Hawaii State Legislature may soon consider enacting laws which would send carbon inspectors to your doorstep to calculate the total carbon value of your house, automobile, even your children – much like the way a property tax is calculated – and send you the bill for just for being on Earth.
This is what we now face.
Will we lose more of our freedoms with this “New Day”? What price comes with Abercrombie’s “New Day”? Contrary to what you may have heard by politicians on either the left or right, we face extremely dark days ahead here in Hawaii as we stare down a devaluing dollar, a crumbling state and federal government and skyrocketing prices which make what little we earn and have left for ourselves worth less towards the basic necessities of life. Neil Abercrombie’s assertion that with his election “a New Day in Hawaii has begun” is a truly terrifying statement that reminds me of something former UK Prime Minister Gordon Brown said at the G20 summit last year: “I think the New World Order is emerging”.
Hawaii proved decisively in the 2010 midterm elections that its people could not handle the burden of freedom with only 38% of the one million eligible voters turning out to vote. By contrast, in afflicted and troubled Iraq’s 2010 parlimentary elections, 62% of their 19 million eligible voters came out to vote despite sectarian violence. We asked for a “New Day” here in Hawaii and didn’t even stop to consider what the cost would be.
Good luck, Hawaii – you’re gonna need it.