Now that I have realized that public services and benefits face years if not decades of decline, the biggest issue in public finance, the one that concerns me personally and I think about every day, is whether the NYC public schools will begin their downward spiral to the 1970s in FY 2011 or FY 2012. If the latter my younger child, having chosen to leave the Catholic system and enter public high school, would get through her junior year. I’ve already given up on her senior year, and most of her generation of NYC kids didn’t get a public elementary school education either. I’ve accepted that my taxes will soar (sales and property taxes have already increased and this is just getting started), the transit system will degrade as a result of all the debts dumped on the MTA, the parks will be unusable unless I donate to them (and perhaps even if I do), and the libraries will be open three days a week.

I don’t expect to get much of anything from Social Security, and much less from Medicare, as a result of what Generation Greed has promised itself by not paid for, expecting to grandfather itself from any sacrifice when the bills come due (already under discussion – Social Security and Medicare at 70, if you are still alive). It wouldn’t surprise me if Generation Greed’s representatives in Congress vote health care reform down. And I now know that I can’t be consoled that my paying more and getting less is a result of money being distributed to those less well off. In the era of Generation Greed, that’s not what government does anymore. So for me the whole public sector comes down to that one year of school. And now:

I read that in order to get the New York State legislature to accept a deal to pretend to address what it has done to our future, Governor Paterson has agreed to use some of the federal stimulus money intended to preserve the school system in FY 2011 right now. Advancing the funds, which will mean far less is available for the schools next year, but will not require as much trimming to be done this year. The legislature, I read, is pleased and is now prepared to begin negotiations.

Now that the path to “reasonable compromise” is clear, why not use next year’s federal education stimulus money to ensure that there are no reductions in funding for Local 1199 and the Greater New York Hospital Association today, in addition to fewer mid-year education budget cuts today? In fact, why not spend the rest of the federal education stimulus money by Election Day 2010, rather than distributing it through the end of the 2010-2011 school year? After the legislators get re-elected, after all, nothing matters – two more years for the legislature and its supporters to paid their pensions and get paid, before fleeing the state.

At this point, nothing they do can alter the outcome. Only bankruptcy can do that. But it can affect the timing. They are taking money that was intended by Congress to allow the schools to get by next year and using it to avoid ticking off the special interests this year. And you thought voting in President Obama would change things.

What cuts am I willing to see? Debt service, pension contributions (by having the beneficiaries including current employees with seniority contribute more instead), retiree health care. What taxes am I willing to see rise? Income taxes on retirement income. Not going to happen. Neither will the political class tell its supporters that they have to continue providing public services and benefits when the budget falls. The cop on the beat, the teacher in the classroom, will be laid off. The union member with seniority doing nothing in a seniority post wills stay there, or retaliate for being sent back to the field by doing nothing when they arrive.

Just remember – some day all those people who have been abused will be expected to pay back all that money Generation Greed has borrowed. Even if they appoint their offspring to replace them in the legislature, and hire goon squads to collect taxes from those not receiving public services and benefits, I don’t expect it will be that easy. I feel no moral obligation to those moral obligation bonds whatsoever. Let the bondholders collect from the state legislators, past and present.