Blog for Boomers

Fear Mongers

The Fear Mongers are back. This time they are spouting opinions and misleading the public to believe they are facts about federal budget deficits. Paul Krugman of the New York Times writes on his blog:  “The point is that running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs.”  (you can access his NY Times Blog by clicking here)

California did not have a rainy day fund when the recession hit. Spending is being cut dramatically including the furloughing of State workers. State law requires a balanced budget and accounting gimmicks provide the illusion of a balanced budget until unrealistic revenue projections do not materialize. With all the spending cuts including salaries of state employees, it is no surprise that only five states have higher unemployment rates than California.

If California does not want to repeat this cycle of huge deficits and high unemployment, the state constitution should be changed so the  budget is  passed by majority rule and a rainy day fund should be set up and increased as the economy improves.  Until these two things happen the state will be cutting spending during recessions instead of shortening recessions by pumping money into the economy. Yes, spending is a great thing to do in a recession, especially if you are improving your infrastructure and putting people back to work.

That is just one blogger opinion and should not be confused with facts or fear mongering.