The mood has turned sour at the Capitol in Denver over the past few months as our state government has faced an alarming shortfall in tax revenue. This has led the Colorado government to cut funding for the disabled, elderly, universities and even go so far as to release thousands of prisoners from our jails early.
Sadly, the traditional method of thinking about budgeting has led our leaders into the stale policy-making approach of cutting spending and raising taxes to try to fill the cancerous hole in our state’s finances.
What’s needed is a new and modern approach, and that’s where America’s indefatigably creative financial system can help.
When banks ran into trouble in 2007 and 2008, they didn’t try to cut expenses as Colorado has done; instead they went to the government and demanded low-interest loans.
To get our own loan, we must concoct a big lie to prove our neediness. Ben Bernanke and President Bush teamed up to tell us that thousands of banks would fail and we’d re-enter the economic dark ages should we not agree to the $700 billion Troubled Asset Relief Program (TARP) boondoggle.
While it wouldn’t be plausible to argue that the collapse of Colorado’s economy would cause a return to the Stone Age, we could threaten to turn Vail into America’s largest homeless shelter; that might convince the wealthy vacationing elites in Congress to give us a large no-strings-attached loan. Threatening to turn Rocky Mountain National Park into a giant oil field might also scare the feds into giving us a bailout.
Once we secure the large loan, it’d be tempting to merely use the proceeds to pay our bills, but Coloradans, we must think bigger! What did large banks do with their taxpayer-donated bailout funds? They speculated in the stock market, real estate and commodities.
Colorado should use our loan to, like JP Morgan has already done, try to drive up the price of oil by buying supertankers and hoarding crude supplies. We Coloradans can profit off the misery of others to fix our budget problems.
If our bets work out, we’ve solved our budget crisis and we come off looking like geniuses. Like Goldman Sachs, we repay our loan early, keep the profits from our manipulation and pay big bonuses to all our officials — I bet Gov. Bill Ritter could use a new Gulfstream jet, right?
However, there is the possibility that, like AIG, Bear Stearns and Lehman Brothers before us, we will lose our speculative bet and blow billions of dollars in taxpayer-bailout funding. We’d be in real trouble then, right?
Not so fast. AIG, formerly America’s largest insurer, lost more than $60 billion last year and received even more government assistance from gullible taxpayers. Other stupid ideas, like the bailout for GM, threaten to waste even more than that.
However, should we not manage to beg, extort or steal any more money from the federal government, a merger is the next option.
It is unprecedented for a state to merge with another. However, it was also unprecedented for Ben Bernanke, the sitting Fed chairmen, to allegedly violate the law by forcing Merrill Lynch to be sold to Bank of America, against Lynch’s will.
Should Colorado’s finances deteriorate further, we simply demand to be merged into some other failing state, such as Arizona or California. When the newly-merged Colofornia goes bust, it then can demand an even bigger bailout, starting the process anew.
Fraud is also a promising possibility. Much of the American banking system’s recent ill-gotten profits have been driven by mortgage fraud, and to have a shot at getting appointed to Obama’s cabinet, tax fraud was a required prerequisite. In an economy this bad, if you aren’t committing fraud, you’re not really trying.
Treasury Secretary Timothy “TurboTax Timmy” Geithner is an inspiration for all of us; if the head of the American Treasury cheats on his taxes, what’s to stop Colorado from bilking a few billion from the federal government anyway?
One thing is clear: Colorado’s austere budgeting must change. Instead of cutting spending, let’s indulge from the federal treasury at the expense of the other 49 lame states. Obama and Bush have wasted so much money that Americans will never notice a tiny little bailout for Colorado.
Editorials Editor Ian Bezek is a senior economics major. His column appears Mondays in the Collegian. Letters and feedback can be sent to email@example.com.