Fifty Herbert Hoovers

[cal04]

PAUL KRUGMAN
http://www.nytimes.com/2008/12/29/opinion/29krugman.html?_r=1&adxnnl=1&adxnnlx=1230526405-qYkGjoRGeVGXjMHCl+1/fw

No modern American president would repeat the fiscal mistake of 1932, in which the federal government tried to balance its budget in the face of a severe recession. The Obama administration will put deficit concerns on hold while it fights the economic crisis.

But even as Washington tries to rescue the economy, the nation will be reeling from the actions of 50 Herbert Hoovers — state governors who are slashing spending in a time of recession, often at the expense both of their most vulnerable constituents and of the nation’s economic future.

These state-level cutbacks range from small acts of cruelty to giant acts of panic — from cuts in South Carolina’s juvenile justice program, which will force young offenders out of group homes and into prison, to the decision by a committee that manages California state spending to halt all construction outlays for six months.

Now, state governors aren’t stupid (not all of them, anyway). They’re cutting back because they have to — because they’re caught in a fiscal trap. But let’s step back for a moment and contemplate just how crazy it is, from a national point of view, to be cutting public services and public investment right now.

Think about it: is America — not state governments, but the nation as a whole — less able to afford help to troubled teens, medical care for families, or repairs to decaying roads and bridges than it was one or two years ago? Of course not. Our capacity hasn’t been diminished; our workers haven’t lost their skills; our technological know-how is intact. Why can’t we keep doing good things?

It’s true that the economy is currently shrinking. But that’s the result of a slump in private spending. It makes no sense to add to the problem by cutting public spending, too.

[mrreowwr_kittty]

1. K and R. nt

[notesdev]

2. There's always an excuse

not to balance the budget.

No need to wonder why these budgets don't get balanced, ever.

[TygrBright]

3. Unfortunately far too many states are saddled with GOPpie-amended Constitutions...

...demanding that the Goob submit "balanced" budgets.

And State Constitutions can't be un-amended overnight.

THANKS, GOPpies!

Can't tellya how thrilled we are with the knowledge that even while we have massive unemployment, crumbling infrastructure, cities teetering on the edge of disaster, and businesses closing and declaring bankruptcy left, right, and center, at least we have "balanced" state budgets!

Way to go!

ironically,
Bright

[tomreedtoon]

4. Krugman is trying to pass the blame.

Where are those state governments supposed to get the money? From their own tax income...on businesses that are failing and shutting down and outsourcing to India. They haven't got the money and the Feds aren't kicking in money to the states, either.

Why doesn't Krugman wave his magic wand and make the money appear on the desks of the "fifty Hoovers"?

[On the Road]

5. States Have Plenty of Ways to Raise Money

I agree with Krugman's general point. The balanced budget amendments were passed in good faith and have undoubtedly helped states remain fiscally responsible, unlike the federal government.

Now, however, those same amendments are having a completely perverse effect. Something has to give, and it may not be the right thing.