As you read this, U.S. and European stock markets are unstable.  

Why?

Washington and our European partners have an excess of debt and a shortage of leadership. The recent market drops are merely a reflection of their actions–or lack thereof–and they have a serious effect on all of us.  

For the past seven months, we’ve worked in Lansing to approve a responsible, yet very difficult balanced budget with one goal in mind: to place Michigan at the top of places to live, work and raise a family. 

Our plan included necessary reforms for our state to compete on the world stage. It also was the earliest balanced budget completed in a generation, since Gov. Milliken was in office. We made a promise to our communities to get spending under control, and we delivered.

Michigan’s balanced budget is proof that fiscal responsibility works – especially in tough times. If only Washington could follow our lead.

Just last week, just after our nation's credit was downgraded, the Fitch rating agency gave Michigan high marks for approving a balanced budget without “one-time measures” and for beginning to tuck away money into a rainy day fund.

As a result, Fitch upgraded Michigan's credit rating from “stable” to “positive." This positive news means we may have the opportunity to lower our debt payments because of a lower interest rate.

Instead, the debate last week in Washington highlighted the fact that our federal government is currently incapable of bringing its spending under control.

To really understand the enormity of Washington’s debt, let’s imagine the federal government is our neighbor, Joe:

Joe makes $22,000 a year in income. He spends $37,000 a year–$15,000 more than he brings in. Between his credit cards and home mortgage, Joe has incurred $148,000 of debt–of which he pays $2,130 in annual interest. What do you think Joe should do?

A.  Borrow $15,000 more each year from you so that he can continue his lifestyle. 

B. Spend no more than he brings in and create a plan to reduce his debt of $148,000.

If your answer is A:  Joe has a very gracious neighbor (China) that is willing to give him a handout. However, one day his neighbor is going to wonder how Joe’s able to live beyond his means. Next, they’ll question why they ever gave Joe a handout. It might even get to the point where Joe offers to cut their grass, wash their car, or even cook them dinner in an attempt to pay off the debt. And, if that's not enough and the relationship goes sour, perhaps Joe forecloses his home–his neighbor now owns all of his personal property.

If your answer is B:  Joe makes some tough decisions.  He'll need to get rid of his cable TV, downgrade his car to eliminate a monthly car payment, find a roommate, or even move in with his parents. By reducing his expenses–after a period of time and with Joe's income going up slowly–he can eventually pay off his debts, have money in the bank, and one day have enough investments so that he does not have to work as hard. He may even be able to retire.

Michigan legislators, with the governor's lead, have made difficult, yet necessary decisions that have affected us all–we created a structurally balanced budget to secure the future of our beloved state.

It's time the president and Congress show the bold leadership and fiscal restraint befitting a deserving nation. The people deserve better and we cannot afford to let them down again.

Otherwise, this country will be washing our distant neighbor's car.

–State Representative Anthony Forlini

24th District