Wednesday, October 15, 2008
The Rainy Day Fund
The economy is raining, pouring and the whole state of Massachusetts is snoring. Instead of trying to solve our problems, the governor is going to cut, cut, cut. He could do that taking a nap. No thanks.
This is an obvious ploy to scare people into voting no on 1. If it weren't for the fact that these cuts will create wide-sweeping and irreversible damage to the state, I'd be all for the scare tactics. Yet, once a school's doors are closed, they're not opening again. So why force dozens of them to close now when there's another way?
We have rainy day funds for the bad economic times. That's what I've been told since I was a little kid. Well, it's raining. It's raining like it hasn't since 1929. We can't play games with the budget - these are human lives the governor is playing with - so it's time to start using liberally from the rainy day fund to get us by for the rest of this year. When projected revenue goes so far south just a 1/4 of the way into the fiscal year, that's when it's time to use rainy day funds to close the gap. Midyear cuts are horrible because so much of the money is already spent - the only place to cut is in jobs. Schools can't just buy less paper, because they've already purchased it months ago.
Let's be clear: if it's not okay to use rainy day funds this year, then it never will be. If we don't use these funds now, then there's no reason to have them to begin with. Use them or my vote will go to people who will lose them.
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10 comments:
Ryan, I usually agree with you, but on this one, NAW! California attacked the forecasts months ago with the Terminator! Where has the Commonwealth been? Too little, Too late? It's about time. It may be raining like cats and dogs, but this is going to be a long one we can thank the Republicans for. History merely repeating itself. It's gonna hurt! Better to cut early and cut often.
Well, Gov Patrick argued for another $200 million in rainy day funds. That's using it, but not abusing it.
It's a natural cycle. It happens on a personal level, when you get a bonus at work put away half then splurge at the right time (for example now). On a state and national level we just never put away enough or when there is a surplus the politicians start funding new expanded programs and don't retire our accumulated debt.
Well, we have a rainy day fund with 1.6 billion. I agree that we don't save enough when times are good, but so much is cut when times are bad that these 'expanded programs' are generally getting back to where we were, if we're lucky. We're below 2000 level funding in local aid, for many communities, when accounting for inflation. This, when costs have skyrocketed, especially in health care and energy.
Who has the balls? Raise taxes!
anonymous 5:17 AM, you can't blame this one on a natural cycle...well...unless you consider the flawed fiscal policy of the Republicans a natural cycle. Trickle Down didn't work under Reagan and we weren't in so deep. Maybe it's about time they started teaching some decent economic theory in public schools. The US has been living well beyond its means, cutting taxes on the wealthy, running massive trade and budget deficits that the Chinese financed, combined with a convincing campaign to buy on credit cards and use home equity to finance any instant gratification you couldn't afford. Who thought it would last? It sure wasn't me. I don't owe any debt and am almost energy independent except for the car. I guess we can blame that damn Democratic legislature for socking away a rainy day fund!
anon 9:43 - it's a cycle in that something like this happens on a regular basis. Remember 1973 and the gas lines and ensuing recession, I do. The housing bubble of the 80's, the internet bubble that followed, now the credit bubble. Heck go back 100 years and we had the Dutch tulip bulb bubble. If you prepare on a personal level you can take advantage of these situations, I'm going to Fla soon to close on a recently purchased retirement home. If we prepared better for these occurences (which are inevitable) on a state and national level the lower income people would not be hurt so bad, Deval could maintain some of the services which he now will have to cut and education would not suffer.
correction - the tulip bulb bubble was actually in 1637:-)
(economic theory from public schools)
Sure, there are economic cycles, but there's two things going on with this one. First, the policies of this administration and the Republican leadership over the past decade and longer have lead to more, worse and longer recessions that the middle and working classes haven't recovered from. Second, their economic policies haven't helped us weather these storms at all - they've been stripping us of our means to do so.
So, yes, there's economic cycles - no doubt. But we could be far more prosperous, far more stable and a far more successful country if George W. Bush and the Republican Leadership never got in power, pursuing shortsighted policies all about the rich grabbing whatever they can now, screwing not only everyone else, but every other generation too.
Ryan there's only been one recession in the last 10 years, we're in it now. The policies that have gotten us into trouble have been from both parties and they stretch back farther than Bush.
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