The word “prudence” is rarely uttered in the political arena. This is particularly true in Albany where Democrats, controlling the state government, have been acting like kids in a candy store spending every penny of their allowances the day they receive it.
For those under 60, not exposed to classical and medieval thinkers who opined on “prudence,” here’s a little background.
The greatest Athenian philosopher, Aristotle (384-322 BC), distinguished scientific knowledge and craft knowledge from practical wisdom—“phronesis” or prudence. The historian John Mearsheimer, interpreted Aristotle’s position as meaning “prudence dictates that [politicians] behave according to realistic logic.” So, for instance, Albany’s politicians spending all the state’s one-shot revenues on recurring operating expenditures, would be imprudent and contrary to “realistic logic.”
In medieval times, Thomas Aquinas (1225-1275), writing in his masterpiece the “Summa Theologica,” agreed with Aristotle and defined “prudence” as “wisdom concerning human affairs” or “right reason with respect to action.”
Perhaps the most succinct definition of “prudence” was expressed by the contemporary French thinker André Comte-Sponville. “Prudence,” he noted, is “what differentiates action from impulse and heroes from hotheads.”
And having watched this year’s spending spree in Albany, I have concluded there were plenty of impulsive hotheads who have ignored practical financial reasoning.
This year the state Legislature approved a record-breaking $212 billion spending plan. They imprudently funded the budget by dispersing the unrestricted federal COVID one-shot revenues of $12.2 billion and on top of that increased taxes by $4 billion.
They also utilized various fiscal gimmicks such as deferring $3.5 billion in Medicare payments owed to providers into the next fiscal year.
The fiscal antics of the spendthrifts in Albany may get them through the 2022 elections, but as E.J. McMahon of the Empire Center for Public Policy pointed out, “after that the bottom falls out with big and growing deficits projected by mid-decade.”
There is one elected official, however, who preaches prudential fiscal realism, and that person is State Comptroller Thomas DiNapoli.
Since taking office in 2007, DiNapoli has released thoughtful annual reports analyzing the flaws in the state’s budget plans and he has warned, time and again, that steps must be taken to shore-up the state’s finances.
In a recent op-ed DiNapoli penned for Newsday, he calls for much-needed prudent fiscal measures.
DiNapoli warns that the state’s current fiscal plan has inherent risks. “A slowing recovery or a second economic downturn,” he cautions, “will upend revenue forecasts, and may create spending pressures to extend or enhance programs currently funded federally or intended to be temporary.”
Yes, a drop in capital gains revenues that the state is heavily dependent on or a mass exodus of the top 1 percent of taxpayers, who pay about 40 percent of New York’s personal income taxes, could be devastating.
To avoid a fiscal meltdown, DiNapoli made several sound recommendations:
1. “Prudently [his word] and transparently use federal recovery aid.” Avoid employing one-shot dollars “to support recurring spending, which may put spending on an unsustainable trajectory.”
2. Replenish the state’s rainy day funds that are presently significantly below the statutorily authorized $6.4 billion.
3. “Carefully consider strategic infrastructure priorities.” Proceeds from long-term bonded debt should be used prudently for projects that “are most important to improve service, enhance economic growth, or address repair needs.” In other words, avoid boondoggles like Cuomo’s scandal-ridden “Buffalo Billion.”
Following these steps, DiNapoli rightfully concludes, “will help ensure the state limits the financial impact of future risks and is able to sustain investments through downturns, disasters and other emergencies.”
The key concern of the prudent government official, Aristotle wrote, “is to determine not ends, but means to ends, i.e., what is most useful to do.”
And Comptroller DiNapoli’s recommendations are “most useful” because they are not driven by delusional ideological formulas that have no relation to reality.
Tom DiNapoli is a prudent politician whose analyses could save an ailing state.
If the leaders of the Democratic Party are wise, they would nominate DiNapoli as their gubernatorial candidate in 2022.
But don’t hold your breath. Sadly, the AOC-wing of the party will not be content until the chief executive office is controlled by one of their imprudent “tax and spend” comrades.