Red-Ink Tsunami: Why Old Ideas Can't Fix the New Government Perma-Crisis

State and local governments have faced big budget gaps before. Typically, things get tight for a while, then the economy perks up, tax revenues recover, and deficits are eliminated. Life goes back to normal. For a variety of reasons, however, today’s budget deficits are different. Government at all levels now faces an inescapable reality – the promises of public services exceed our ability to pay for them – and will do so regardless of when the recession ends. The steady increase in the quantity and cost of public services, coupled with the needs of an aging population and public pension costs have produced a long term, structural deficit.