State Budget Problems

As has been discussed here on a number of occasions, almost all of the state governments are having budget shortfalls. I found an extensive report on how they are addressing these problems from the National Conference of State Legislatures. It’s long and only really interesting to other numbers geeks like me.

However, what I found interesting is this summary of how the states are planning to deal with their shortfalls.

Cutting spending (26 states)

Tapping a variety of state funds (23 states)

Using tobacco settlement funds (16 states)

Increasing taxes (16 states)

Tapping rainy day funds (12 states)

Raising fees (10 states)

I was actually quite surprised to see that 26 states would even consider cutting their spending, because normally that side of the equation is untouchable. Obviously, since we don’t yet have 103 states, some states are planning more than one approach. Many people would consider raising fees and raising taxes to be essentially the same thing.

KMK

Privatizing Social Security

As we all expected, the opponents of allowing people to have any control over their own retirement money are exploiting the stock market drop as an excuse to keep all of the power in the hands of our rulers in DC. As I have explained before, and Matt Moore discusses here, that is complete garbage.

KMK

Truth About The Reagan Tax Cuts

Jeff Jacoby has a good & accurate description of the very positive effects the Reagan tax rate cuts had on the country.

It makes me sick every time I hear those rate cuts blamed for the deficit, when that was completely the fault of rampant spending by Congress. It makes me doubly sick when even so-called Republicans, such as Warren Rudman, consistently parrot this liberal lie. When will the GOP stand up against this historical revisionism and smack down anyone who perpetuates this lie?

In fact, if Bush weren’t so afraid of offending the liberals, he would take steps to reduce tax rates right now and we would see the benefits to the economy very quickly. As I have explained on several occasions, he has the power to unilaterally chop the effective tax rate on capital gains by redefining the cost basis to include adjustments for the effects of inflation. Unfortunately, he is too wimpy to use that power, exactly as his father was.

KMK