federal spending cuts
My column from yesterday's The Fiscal Times noted that state and local governments around the country, which because of balanced budget requirements and dramatically falling revenues are facing some very tough times, are being forced to make difficult decisions.
But this story in yesterday's The New York Times about Kansas City deciding to close half its public schools and reduce the payroll by around 20 percent makes the decisions by other states to close rest stops along some highways appear to be insignificant.
The Times' story indicates that the schools and school board in Kansas City have been in terrible shape for years and, therefore, that this decision was almost inevitable. Still, the precipitating event was was the projected $50 million deficit (out of a total budget of $300 million) in the midst of the economic downturn and the prospect that it wasn't going to get any better any time soon.
My column from yesterday's The Fiscal Times shows what's ahead when the spending reductions begin.
I've spent a lot of time in the middle of the "Starve the Beast" and "Supply Side Tax Cut" debates. I formulated the Roth-Kemp tax cut in early 1977 and, after working to scale it back, helped pass it in 1981 as the Republican tax economist on the Senate Budget Committee. I formulated the Earned Income Tax Credit in 1975 and have worked for Democrats too. I hold myself out as a non-partisan Washington economist. My main goal all along has been to improve tax and budget policy. I won't claim much success, but I would offer some observations.
I know I'm beating a dead horse, but it's hard not to be impressed (or depressed, depending on your point of view) by the way earmarks and spending reductions are discussed in local communities.
Whenever the subject changes from the generic "earmarks" and the "need to reduce federal spending" to the specific dollars the locality either wants, likes, was expecting, is getting, etc., the discussion changes from how bad earmrks and overspending is to how wonderful the money is coming our way or how the decision will hurt this area.
