Government: working hard to squelch recovery

Friday, November 20, 2009

Via the Drudge Report

It looks as though several city mayors are looking at budgetary problems as a result of the economic downturn.  The poor budget management of states and cities highlights the real truth about government in an economic downturn.  Government is a 2,000 pound gorilla, jumping on your back as the private sector tries to climb the hill of recovery.

"While federal stimulus funds have helped states close budget gaps and preserved jobs for many state and school-board employees, the mayors said federal money hasn't done much to ease their day-to-day budget problems. "The stimulus is going to special things," said Chuck Reed, mayor of San Jose.

Beyond budget and services cuts, the mayors discussed new ways to raise revenue at a time when incomes are stagnant and the national unemployment rate is at 10.2%. Philadelphia, for instance, has temporarily increased its sales tax while Mesa has levied a property tax for the first time."

States and local governments face different budgetary problems then the politicians at the federal level.  For example, they often have to finance lavish unfunded federal mandates that are out of their control (I'm sure they can't wait for health care reform).  However, take a look at these mayors' solutions to the problem.  Sales taxes are down, because people are buying things, because they don't have jobs.  So how do cities respond?  Raise taxes that aren't dependant on sales, like property taxes.  It is no wonder that we are headed for a second dip in the recession.  

Knock, Knock, Knock!  The Taxman cometh.


Teresa said...

The Democrats are exacerbating the economic crisis. They should not be raising taxes in a recession. It almost seems like these Dems are making the crisis worse on purpose. I hope not. But their logic is screwy.

November 20, 2009 at 4:17 PM
Unknown said...

Great blog. Keep up the good work.

November 20, 2009 at 9:30 PM

Teresa - That could be the case. My take is that they are protecting the programs that get them elected. That's why government is a drag on the economy. Self preservation and not listening to the people is their main concern

Commentator - thanks. I plan on following your blog regularly.

November 21, 2009 at 6:38 AM

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