Thursday, April 24, 2008
States face Budget Gaps/ Potential Crisis looming?
This is what happens.
1) economy picks up
2) states spend more
3) economy tanks
4) politicians and state goes WHOOPS!
The bottom line is that states spent too much during the boom times due to the real estate boom. How about some tightening of the belt or reduction of some spending for once? This is VERY common in 3rd world economies. You frequently see stuff like this happening during a "currency crisis" where the gov't spends more than they take in for several years or gets impacted SIGNIFICANTLY by some time of external shock to its revenue base.
Will Venenzuala, as an example, be able to spend $$$ the way they currently are if oil goes to $50? Probably not....and social unrest will occur.
Here in the ole U.S. , where we live more comfortably than 99% of the world, people will whine a bit but we don't see the type of lobbying/people gathering/movements like we used to see in the past. Call it apathy?? I don't know but taxes are going to go up BIG TIME, in my opinion, in the next 5-10 years so people better wake up!