Throughout the United States, state and local governments face skyrocketing costs for the pensions and health care of their current and retired teachers, firefighters, police, and other employees. Many of these costs are effectively on "autopilot": They are locked in place by law or by union contract, and lawmakers neither control nor review them. In Washington State, for example, 55-60 percent of the budget goes to pay the salaries and benefits of the state's employees, so more than half of the state budget is off limits to policymakers.
As more and more of a government budget is devoted to employee pensions and health care, lawmakers must (a) raise taxes, or (b) engage in dangerous fiscal gimmickry, or (c) take on more debt, or (d) or spend less on schools, roads, public transport, libraries, assistance for the poor, and other functions. Troublingly, many governments are choosing option (d), creating the paradox of government that spends more and more to do less and less.