Gov. Martin O'Malley (D) has begun chipping away at the problem, starting with the outlays. Predictably, he is under attack -- from liberals and unions who say the cuts are pitiless and cruel and from Republicans who say they don't go far enough. That's a good sign that the governor is on the right track.
...The original fiscal sin, nearly a decade ago, was to cut taxes when it was clearly irresponsible to do so; that misstep was compounded by massive new spending on education and soaring health costs.
...As the governor has said, higher taxes will have to be a part of the solution. Yet he has wisely started with budget-cutting -- $153 million from the fiscal year that started this month...The $153 million trim represents just 1 percent of the state's general fund spending, but there's no denying that some of it will hurt.
This page links to the appropriations summary for the state of Maryland in FY 1998 and FY 2007, according to which appropriations roughly doubled, from $16 billion to $29 billion. Over this same period, the U.S. economy grew from a GDP of $8.5 trillion to $14 trillion.
If Maryland spending had kept pace with the U.S. economy, it would be at $26.4 billion. This would represent a cut of $2.6 billion, not $153 million. Imagine how painful that would be!
Tax increases, of course, are completely painless.
Which is good, because we are on a path where at the Federal level taxes as a percent of GDP will soon rise to unprecedented levels.