The downward spiral
Cutting government programs and spending only makes the economic crisis worse
In the Letters section this week, former Butte County Chief Administrative Officer Paul McIntosh makes some astute comments about the impact the cutbacks in state-funded services provided by the county will have on the local economy.
Noting that the multiplier effect of the $59 million proposed for cutting makes its actual value something like $80 million, he points out that loss of this income to the county, and the jobs that will be lost with it, will have a painful domino effect on local businesses, especially at this time of economic crisis.
We agree. And that’s part of the reason why we think Gov. Arnold Schwarzenegger’s “cuts-only” approach to resolving the state’s $24.3 billion budget deficit is wrong. Republicans argue that creating new or raising existing taxes at such a time would make the economy worse, and certainly increasing taxes at such a time is burdensome. But cutting government programs and spending is even worse. It throws more people out of work and creates more misery—economic and otherwise.
The federal government’s response to the recession has been to inject stimulus money into the system. So far it seems to be improving things. The state can’t do that—it’s required to have a balanced budget—but targeted tax hikes are appropriate in this situation. We need to resolve the budget deficit by a combination of cuts and taxes if we’re to have any hope of stopping the downward spiral.
Of course, doing so would have the added, moral benefit of keeping the state’s safety net in place for its most vulnerable citizens.