Wednesday, December 31, 2008

The Economy III

This little snowfall we’re expecting this morning in Southern Maine is giving me a small headache. Because of my mobility problems, I normally don’t venture outside in snow. But I’ve been waiting for nearly six months for this day as I have an appointment with my ophthalmologist. Or is it with my optometrist? I get these two mixed up. Anyway, I have an appointment with someone to prescribe some new glasses for me.

As I begin this morning, it’s six A.M., snow hasn’t yet arrived yet. But Ch. 6 weatherman Kevin says we are on the fringe of up to about 4 inches, if the storm tracks as forecast. From Portsmouth, NH, on south and through the Boston/Cape Cod areas, a foot of new snow is possible. Portsmouth is in the six inch plus area.

Gator Wife takes real good care of me. She has arranged with her boss at her part time job to go in early this morning, get the work she is assigned done, and come home early so she can drive me to the eye exam place. Her car has all-wheel drive so this little snow probably won’t slow it down too much. From what Kevin was saying this morning, we’ll be heading out right around the storm takes hold here.

I’ve been offering my unsubstantiated opinion of the state of the economy for the last couple of days. Maine is not immune to the problems facing the nation and other states. The economy here is in deep trouble, too. Our state legislature has approved spending, and more spending for the last 30 or more years.

It seems just about any time any group wants more money, our state simply enacts a new tax or increases an existing one to pay for it. As a result, we’ve become one of the most socialist states in the nation and our taxes are near the highest of all the states.

Now the state must cut its current budget by more than $100 million between now and June 30th due to a projected revenue shortfall. To make matters even worse, it is now projected that the state will fall short by nearly a billion dollars for the next two-year budget. The choice it must make is simple: cut spending or increase taxes.

I read an editorial last week in the Lewiston Sun-Journal, I think it was last Monday, that offered a suggestion for the state. It was a combination of spending cuts and a stimulus package. Those last two words caught my eye because in general I’m opposed to such packages. Giving away “free” money simply doesn’t work. And the state is hoping the federal government gives away some of that “free” money to states.

All government money, whether federal, state or local, is our money, money we’ve given to them in the form of taxes. Without new sources money will eventually run out. That editorial stimulus package pointed that out. It suggested that along with those suggested spending cuts, the state should also cut some of its taxes. It primarily mentioned the income tax rate.

That’s the type of stimulus package I could support. Leaving me more of my money to spend as I wish can only help out the business community to invest in its products and services thus creating the potential for increased employment. That, in turn, would create more income tax revenue for the government. The economy would slowly climb out of its current abyss.

The success of the formula has been proven. Two of the most notable leaders to employ the formula were Democrat John F. Kennedy and Republican Ronald Reagan. George Bush One tried but then he gave in to the pressure of the Democrats and went along with raising taxes. He was defeated in the next election.

The Democrats want to follow a formula of the 1930s where government stepped in to hand out the “free” money with bailouts. Most economists say that only prolonged the Great Depression. And so the handouts and bailouts will only prolong our current recession. We simply do not learn from history. And that’s a waste.

2008 is drawing to a close. So has this little three day personal expression of the economy. I hope the year is leaving you and your family with good health and we will all now look to a Happy and More Successful New Year.