Is the public sector entering a permanent fiscal crisis? David Osborne thinks so. In his new book, The Price of Government, co-authored by Peter Hutchinson, Osborne meticulously documents the yawning gap between expenses and revenue at every level of government -- and how that gap isn't going away, thanks to soaring health-care costs, a graying population and fierce resistance to new taxes in any form.

Osborne has written about government and ways to reform it for years. His most famous work, Reinventing Government, emerged at a desperate time, when the majority of Americans didn't trust government to do its job right. That effort triggered a surge of interest and activity aimed at reforming government's bureaucracy.

Back then, Osborne and co-author Ted Gaebler noted the growing disparity between declining revenues and rising demands for services. The difference today is that "we've fallen off a fiscal cliff," said Osborne.

Unfortunately we can't wait for it to go away, as the problem appeared to do in the mid-1990s when revenues began rising again. "Most people assume it will go away," cautions Osborne, "but this time it won't."

That's why Osborne and Hutchinson have taken a new look at how government must change its responses to the ongoing crisis, emphasizing the need to budget for outcomes and buy value, rather than expend energy finding ways to cut costs on an annual basis.

In this issue, we have an excerpt from The Price of Government that focuses on the need for smarter leadership in government, or as Osborne puts it, "managing change from the radical center." Occupying that position are a small but brave band of government executives, such as Gov. Gary Locke of Washington and former New York City Mayor Rudy Giuliani.

Osborne and Hutchinson show how these men -- and a few others -- broke out of the traditional boxes for governing and applied new rules that have begun to transform how services are delivered and funded.

With the recent announcement that the Medicare trust fund will be broke in 2019 -- years ahead of schedule -- it's clear, as Osborne adamantly points out, the fiscal situation isn't getting better. Now is the time to begin work on getting the government we need to thrive and prosper.

Tod Newcombe  |  Senior Editor

With more than 20 years of experience covering state and local government, Tod previously was the editor of Public CIO, e.Republic’s award-winning publication for information technology executives in the public sector. He is now a senior editor for Government Technology and a columnist at Governing magazine.