WASHINGTON -- Following the midterm elections, attention understandably focused on those parts of the South and Midwest where the Obama coalition collapsed. But a second wave of trouble is coming for the president and his party, precisely in those states where the first wave barely reached. Having experienced the revolt of red America, Democrats must now deal with the fiscal crisis of blue America.
While massive state budget shortfalls are not limited to predominantly Democratic states, they are concentrated in them. "In California and New York," says John Hood of the John Locke Foundation, "the fiscal crisis flirts with bankruptcy." Explanations include rising Medicaid costs, increased spending on higher education, and the long-term challenge of funding public pensions. At the same time, says Hood, "All the major sources of revenue have cratered." The states doing worst are the ones, such as California and New York, that had irresponsible budgets going into the recession. States that were fiscally responsible during good economic times, such as Indiana, have had a softer landing.
And this paragraph makes the key point:
And this paragraph makes the key point:
Most significantly, the blue-state financial misery continues and deepens the ideological crisis of American liberalism. Few politicians in traditionally liberal states now speak about the expanding promise of progressive government and the welfare state. New Jersey is already in conservative revolt. New York's Democratic governor-elect, Andrew Cuomo, campaigned on a promise of budget cuts without tax increases. The New York congressional delegation shifted significantly in a Republican direction. While California remains in denial -- even after a budget crisis that has lasted for a decade -- that could rapidly change as well. It may be Democratic governors who are forced by economic reality to limit the size and ambitions of government, delivering a body blow to liberalism itself. If progressive activism can't survive in these places, it will be difficult for it to survive anywhere.
In a world where governments have made promises far exceeding their ability to pay them, where spending far outruns taxes every year there is nothing but decline and chaos and retrenchment. It is the Liberal hell - for the Liberals because government is discredited and has no resources to do 'important' new things and for everyone else because we have to live with the chaos, and the injustice and cruelty that always accompanies it. Read the whole thing.
PS: There's a third phase too. Stay tuned. Get more popcorn.
H/T Instapundit
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