The Logic Lifeline

A logical approach to sorting out world events. Where logic, opinion and speculation are combined to produce a reasoned, but entertaining reading experience. The unofficial hometown conservative blog of Woodridge, Il

Monday, June 22, 2009

Overspending at the Economic Peak

We are seeing many references in the news about the severe budget shortfalls in states with most focus on California and New York. Without getting into a discussion about Federal deficit spending, I would point to city and state level as a clear government level that requires strict budgetary discipline. At this level, there should never be significant deficit spending. Yet what we see is that at the economic peak where revenues are highest, states are spending at lease as much as comes in and often more.

For decades we have seen economies rise and fall in a constant cycle. Economies can never sustain unending growth, eventually succumbing to a recession where revenues crash back to earth. While we enjoy the spring, summer and fall of each cycle; there is always a winter. Each time we hear of state budget woes. Attempts are made to raise taxes to make up the difference. When wiser minds prevail, cost cuts are made instead; although too often the wrong areas are cut.

During the economic highs, nobody is ever wise enough to prepare for the fall. States should set aside at least 10% of their revenues during the good times to tap into during the bad times. States should retain a reserve from the fruitful seasons to fall back on during economic winter. Unfortunately, this does not happen. There is no serious pressure for budgetary restraint. Instead there is a hand out at every corner. Instead votes are purchased from public coffers.

We are always hearing about looking for solutions to societal problems. Unfortunately, the best time to find and enact a solution is before the problem occurs not after.

1 Comments:

  • At 1:05 PM, Blogger SkyePuppy said…

    Looking for this kind of solution would take wisdom. Unfortunately, most politicians are little more than popularity- and power-seeking attention grabbers, and as such they leave no room in their hearts for the kind of wisdom it takes to make responsible decisions.

     

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