This week, our debt will pass $13 trillion. Nouriel Roubini, former Clinton White House economist, said on Fox News, "What has happened in Greece could happen in the U.S. We could have serious problems. We have the debt of the federal government. Many state and local governments are bankrupt. There are unfunded liabilities for social security. There are unfunded liabilities for state pensions." Trillion dollar deficits are not sustainable.
Politicians and government administrators talk about the pain involved in cutting government spending, and there are consequences that impact employees and those served. But, too often, they forget the pain citizens are experiencing in having to pay more fees and a variety of higher taxes. Governments don’t bear the cost of anything; their citizens do.
The late Peter Drucker was a leadership truth teller: “I think you could probably merge agriculture and commerce and have one department of the economy. Instead, my prediction is coming true. I predicted in 1960 that, by the year 2000, there would be more employees of the Department of Agriculture than American farmers…. Cutting back on any government service is still anathema to liberals…. So if you are a Democratic Party dependent on labor votes, cutting government services is not exactly popular.”
Unfortunately, too many politicians in power are more interested in being popular than responsible. They’re spending more, expanding entitlements and printing money rather than cutting budgets.
Tackling the Deficit is controversial, and it isn’t easy. Leadership never is. Ross Perot captured it best: “The deficit is like the guy that finds a rattlesnake in his pants. He knows he's got to shoot it, but he doesn't want to hit anything important.”
Both leaders and citizens would like more money to spend, but the stark economic realities are forcing all to decide where to cut? There is a sign in the CA State Finance Department that should have been put up long ago: “Nothing inspires genius like a tight budget.”
The most common mistake is organizational egalitarianism. Leaders take 10% away from everybody, instead of separating out what's core. We need leaders to embrace a scrounger mentality—you do what you have to do with what you have. Be tight where you can and spend only where it’s critical. Don’t just think more with less; do the RIGHT less with less! Mission centric services should receive priority funding. Some expenses are nice only if you can afford them, and other costs could have been cut years ago. Keep all the stakeholders focused on being responsive and working smart on real priorities that are worth doing.