can someone explain to me why a balanced budget is so important?

[rudeguy]

I live in Michigan, and this year we had a budget deficit of roughly 900 million dollars. We are having a really rough time here in Michigan. We are losing some of our biggest factories, employers are laying people off left and right, and the quality of our schools is dropping severely.

My question is, why not invest some money to keep the businesses here, improve the schools, and/or entice businesses to move up here?

 

[kylebisme]

spend what money? you can't spend what you don't have and you can only borrow so much.

 

[Perknose]

Dunno, Michigan may be a lost cause in the short run, however, you do get my vote for:

BEST SIG EVAR!!

 

[MadRat]

A government w/o a spending cap is a government that lost control of itself. In the US the people are the government, the government is not to run the people - in theory.

 

[Dman877]

You could raise taxes... but it seems that's un-American atm... forget I mentioned it.

 

[ReiAyanami]

the governator brought in bonds to finance the state

 

[Moonbeam]

It's good because you can pay for what you buy.

 

[dmcowen674]

Originally posted by: GoodDad
I live in Michigan, and this year we had a budget deficit of roughly 900 million dollars. We are having a really rough time here in Michigan. We are losing some of our biggest factories, employers are laying people off left and right, and the quality of our schools is dropping severely.

My question is, why not invest some money to keep the businesses here, improve the schools, and/or entice businesses to move up here?

For crying out loud who is lying to you there? Your fellow AT Experts CAD & Co swear and jump up and down that the Economy is "Booming and Soaring" and getting better everyday. You obviously must have a bunch of Liberals selling you a Bill of Goods that the State is 900 Million in the hole and losing jobs.

I better send you one of my Tin Foil Hats so you can see how well things are there.

 

[Dissipate]

Originally posted by: GoodDad

My question is, why not invest some money to keep the businesses here, improve the schools, and/or entice businesses to move up here?

Getting businesses there is not a matter of investing money, it is a matter of ending red tape and regulations that keep businesses away. If state laws are business friendly then businesses will definately move there.

Budget deficits on any level of government are bad, just as it is bad for an individual to rack up credit card debt. You see interest has to be paid every year on that deficit, its a complete waste of money. People need to wake up and realize that government should be on a fixed budget and save money, not be on a budget that changes with the winds of the economy all the time and spending money regardless of how much is coming in. Its not rocket science, its called a head tax. Head tax + law prohibiting issuance of state bonds + ending government programs that give people handouts + law requiring state to save money every year = fiscal responsibility.

 

[rudeguy]

Originally posted by: Dissipate

Originally posted by: GoodDad

My question is, why not invest some money to keep the businesses here, improve the schools, and/or entice businesses to move up here?

Getting businesses there is not a matter of investing money, it is a matter of ending red tape and regulations that keep businesses away. If state laws are business friendly then businesses will definately move there.

Budget deficits on any level of government are bad, just as it is bad for an individual to rack up credit card debt. You see interest has to be paid every year on that deficit, its a complete waste of money. People need to wake up and realize that government should be on a fixed budget and save money, not be on a budget that changes with the winds of the economy all the time and spending money regardless of how much is coming in. Its not rocket science, its called a head tax. Head tax + law prohibiting issuance of state bonds + ending government programs that give people handouts + law requiring state to save money every year = fiscal responsibility.

Sounds like a great formula for success. I agree with ending handouts to those that DONT need it, and I definately agree with saving money, when you can. I also think that there is alot of fat in the budget that doesnt have to come out of education or public safety, but I am just a pissant, tax paying voter, what do I know???

But back to my question. The governor had a good plan, balance the budget. She did that, now what?

Now businesses are leaving, schools are worse than ever, and taxes are on the rise (local as of right now, they are considering increasing state next year.) Obviously, balancing the budget didnt do our state a whole lot of good, unless they were looking to decrease population. I just heard some numbers that said that people 25-45 were leaving Michigan at a record pace. Isnt that the age of the workforce???

 

[rudeguy]

Originally posted by: Perknose
Dunno, Michigan may be a lost cause in the short run, however, you do get my vote for:

<STRONG>BEST SIG EVAR!!</STRONG>

thanks, I still laugh when I read that thread

 

[Perknose]

Originally posted by: GoodDad

Originally posted by: Perknose Dunno, Michigan may be a lost cause in the short run, however, you do get my vote for: BEST SIG EVAR!!

thanks, I still laugh when I read that thread

Yeah, and I didn't mean to slight your question. I can feel your desperation. In bad economic times, the individual states bear the brunt of the fiscal burden, and their citizens suffer. Maybe you can convice our emporer to slide you some of the billions being spent on the war on terror, because terror is what the unemployed and forgotten are experiencing, and a nation that forsakes it's own children's schools, on whatever level, to chase the illusion of security abroad, has sorely misplaced it's priorities.

 

[dmcowen674]

Originally posted by: Perknose

Originally posted by: GoodDad

Originally posted by: Perknose Dunno, Michigan may be a lost cause in the short run, however, you do get my vote for: <STRONG>BEST SIG EVAR!!</STRONG>

thanks, I still laugh when I read that thread

Yeah, and I didn't mean to slight your question. I can feel your desperation. In bad economic times, the individual states bear the brunt of the fiscal burden, and their citizens suffer. Maybe you can convice our emporer to slide you some of the billions being spent on the war on terror, because terror is what the unemployed and forgotten are experiencing, and a nation that forsakes it's own children's schools, on whatever level, to chase the illusion of security abroad, has sorely misplaced it's priorities.

"I can feel your desperation. In bad economic times"

Woa Woa Woa. CAD and Co insisted that I kill the Depression thread that we are in a "Sizzling" Economy, how can it be "Bad Economic Times"???

Time to start the Depression Thread again???

 

[rudeguy]

Originally posted by: Perknose

Originally posted by: GoodDad

Originally posted by: Perknose Dunno, Michigan may be a lost cause in the short run, however, you do get my vote for: <STRONG>BEST SIG EVAR!!</STRONG>

thanks, I still laugh when I read that thread

Yeah, and I didn't mean to slight your question. I can feel your desperation. In bad economic times, the individual states bear the brunt of the fiscal burden, and their citizens suffer. Maybe you can convice our emporer to slide you some of the billions being spent on the war on terror, because terror is what the unemployed and forgotten are experiencing, and a nation that forsakes it's own children's schools, on whatever level, to chase the illusion of security abroad, has sorely misplaced it's priorities.

Thanks for the thoughtful post, but our views arent quite the same. I think money spent on protecting my child is just as important as his education. However, sending people to the moon, sending remote control cars to mars, things like that could be cut down just a bit. From what I understand, funding for the schools comes mostly from within the state. I wouldnt expect the president to give our state extra money just because we are in a crunch. We need to be able to fix this ourselves.

The good thing that has came out of this is people seem to be more aware of the problems our schools are having, and are willing to help out. We have had a few millages go through recently. One was to renovate some of the schools, and one was to fund special education. Both great things. But the regular schools need help too. I volunteer at my son's school along with some of the other parents. Its kind of sad to watch teachers rationing out plain white paper because there isnt enough in the budget to buy more.

 

[amok]

Originally posted by: GoodDad

Originally posted by: Perknose

Originally posted by: GoodDad

Originally posted by: Perknose Dunno, Michigan may be a lost cause in the short run, however, you do get my vote for: <STRONG>BEST SIG EVAR!!</STRONG>

thanks, I still laugh when I read that thread

Yeah, and I didn't mean to slight your question. I can feel your desperation. In bad economic times, the individual states bear the brunt of the fiscal burden, and their citizens suffer. Maybe you can convice our emporer to slide you some of the billions being spent on the war on terror, because terror is what the unemployed and forgotten are experiencing, and a nation that forsakes it's own children's schools, on whatever level, to chase the illusion of security abroad, has sorely misplaced it's priorities.

Thanks for the thoughtful post, but our views arent quite the same. I think money spent on protecting my child is just as important as his education. However, sending people to the moon, sending remote control cars to mars, things like that could be cut down just a bit. From what I understand, funding for the schools comes mostly from within the state. I wouldnt expect the president to give our state extra money just because we are in a crunch. We need to be able to fix this ourselves.

The good thing that has came out of this is people seem to be more aware of the problems our schools are having, and are willing to help out. We have had a few millages go through recently. One was to renovate some of the schools, and one was to fund special education. Both great things. But the regular schools need help too. I volunteer at my son's school along with some of the other parents. Its kind of sad to watch teachers rationing out plain white paper because there isnt enough in the budget to buy more.

I think schools, as currently structured, are a black hole for money and other resources, and throwing more money at it does nothing to solve the problem. One of the few things I agree with the conservatives on this board about . There's a thread floating around the forum, posted by Cad, about NY's school reform. Bloomberg's statements on the matter are definitely an interesting read.

 

[Dissipate]

Originally posted by: GoodDad

Originally posted by: Perknose

Originally posted by: GoodDad

Originally posted by: Perknose Dunno, Michigan may be a lost cause in the short run, however, you do get my vote for: <STRONG>BEST SIG EVAR!!</STRONG>

thanks, I still laugh when I read that thread

Yeah, and I didn't mean to slight your question. I can feel your desperation. In bad economic times, the individual states bear the brunt of the fiscal burden, and their citizens suffer. Maybe you can convice our emporer to slide you some of the billions being spent on the war on terror, because terror is what the unemployed and forgotten are experiencing, and a nation that forsakes it's own children's schools, on whatever level, to chase the illusion of security abroad, has sorely misplaced it's priorities.

Thanks for the thoughtful post, but our views arent quite the same. I think money spent on protecting my child is just as important as his education. However, sending people to the moon, sending remote control cars to mars, things like that could be cut down just a bit. From what I understand, funding for the schools comes mostly from within the state. I wouldnt expect the president to give our state extra money just because we are in a crunch. We need to be able to fix this ourselves.

The good thing that has came out of this is people seem to be more aware of the problems our schools are having, and are willing to help out. We have had a few millages go through recently. One was to renovate some of the schools, and one was to fund special education. Both great things. But the regular schools need help too. I volunteer at my son's school along with some of the other parents. Its kind of sad to watch teachers rationing out plain white paper because there isnt enough in the budget to buy more.

Public education is actually part of the problem, NOT the solution. You see because of mandatory education laws there are kids in the schools who don't want to be there and are not benefitting from being there but they are making everyone else's life hell because they are there. You have the gangsters, the drug dealers, the bullies who are in the public education system and they can't really be kicked out because there is no place else to put them. Public education should be ended, it is an inefficient, costly and ridiculously ineffective system.

I don't think I need any statistics to back that up either, it is painfully obvious. Education should be funded out of pocket by every parent and they should send their children to private schools which have much more accountability. Charities could help parents pay for education costs also. Where this idea that education is different than any other service in the economy is beyond me, every parent should take education costs into account before bearing children. Relying on the state for such a service is just slothful.

 

[Zebo]

Same reason you must balance your books but on a very macro scale.

Budget deficits put inflationary pressure on the economy in many ways. Not only is there less money for you, me X corporation to borrow from there's less for the governemnt to borrow too. This increases the Value and intrest rate of cash when so many people are hunting for it. To recuop these costs they are going to charge higher prices for goods and services.

Secondly they are a hidden tax. At least with taxes, spending what you take in, you get something for your money in the form of services and infrastructure. Nobody ever considers "private taxes" also known as interest payments when the goverment borrows. So instead of stealth bomber costing 2B it really costs us 4B.

 

[Siddhartha]

The Republicans always make deficits a big political issue when the Democrats are in power. So they have pushed through balanced budget legislation in a lot of states to keep the Democrats honest.

In the long term, in a healthy economy big budget deficits on the Macro level lead to high interest rates. High interest rates lead to a slow business growth which lead to a recession.

 

[Jhhnn]

Michigan's problems seem to be two-fold. First off, the economy is heavily dependent on manufacturing, the hardest hit economic sector. That's not going to change. Second, it's a blue state, and therefore receives less from the federal treasury than it pays in, by a fair percentage. That won't change, either, so long as the Republicans control the federal govt.

Budgets, both personal and governmental, need to be balanced over time, not necessarily at any given moment. This requires taking the long view, something that politicians, particularly Republicans, refuse to do, for a variety of reasons. Anti-government anti-tax rhetoric sells very well to a certain % of the population, making the short term political gains of taking such an approach very attractive- it makes re-election easier. This is a factor even in states like Michigan. Cut taxes when the economy is good because we don't need the money, cut taxes when the economy is bad to, uhh, stimulate the economy. Add some false trickle-down theory to the mix to feed your campaign contributors, and voila, governments are ill-prepared to deal with reversals of fortune, simply because no debt is ever repaid, merely accumulated, and interest payments increase over time. If anything, taxes need to be raised when times are good, to build infrastructure, create surpluses, repay debt, and to allow govt more leeway when times are bad.

Ultimately, of course, the current lack of honest leadership leads to financial collapse, at least for the govt involved. Sort of like having the anti-government foxes watch over the government chicken coop- it's a ticket for disaster.

 

[Tom]

The economic advantages of manufacturing things out of steel in Michigan has largely gone away.

And it isn't mainly because of cheap labor overseas, that always existed. The real development that changed the world is a vastly improved world-wide transportation and information system. Without that development the cheaper labor wouldn't matter.

But one saving grace is that even though it hurts places like Michigan and my homestate, Ohio, this shift increases the productivity of human beings on a global scale, those low wage earners in other countries dramatically improve the standards of living in their countries.

The areas we have to be careful about are things like exploitation of the enviroment, exploitation of labor, etc. Those things do not really improve productivity, they merely hide some of the cost to create an illusion.

As far as Michigan is concerned, they need to come to grips with reality and either figure out what their people and resources could be productive at, and invest in that stuff, or figure out how to downsize the government in a rational way to meet the reduced needs of a smaller population.

 

[chess9]

Don't worry about Michigan. If re-elected, Bush has promised it to Blair since he will shortly be a man without a country. Blair plans to turn Michigan into the American version of Cost Rica, but with snow as a fringe benefit. You'll all be putting out Intel P5s in 2005. Just chill for a few weeks....

Send your resume today to: His Royal Toadiness, 1 Downing Street, London, England. I'm sure an early "entry" will get you one of the $10/hr jobs.

Balanced budgets are not necessary to a healthy state economy. Hasn't your governor heard of trickle down economics, supply side economics, and the high value of outsourcing? I knew Michigan was backwards. Move to Ohio, where enlightenment reigns...and the weather is almost as bad.

-Robert

 

[LordMagnusKain]

Originally posted by: Zebo
Same reason you must balance your books but on a very macro scale.

Budget deficits put inflationary pressure on the economy in many ways. Not only is there less money for you, me X corporation to borrow from there's less for the governemnt to borrow too. This increases the Value and intrest rate of cash when so many people are hunting for it. To recuop these costs they are going to charge higher prices for goods and services.

Secondly they are a hidden tax. At least with taxes, spending what you take in, you get something for your money in the form of services and infrastructure. Nobody ever considers "private taxes" also known as interest payments when the goverment borrows. So instead of stealth bomber costing 2B it really costs us 4B.

The state of Michigan, unlike the US, doesn't print it's own money; as such eventually the debt will need to be payed off to the creditors, and if the quality of living in your state is falling it's unlikely you'll be able to cover those debts in the future.

 

[XZeroII]

Originally posted by: LordMagnusKain

Originally posted by: Zebo
Same reason you must balance your books but on a very macro scale.

Budget deficits put inflationary pressure on the economy in many ways. Not only is there less money for you, me X corporation to borrow from there's less for the governemnt to borrow too. This increases the Value and intrest rate of cash when so many people are hunting for it. To recuop these costs they are going to charge higher prices for goods and services.

Secondly they are a hidden tax. At least with taxes, spending what you take in, you get something for your money in the form of services and infrastructure. Nobody ever considers "private taxes" also known as interest payments when the goverment borrows. So instead of stealth bomber costing 2B it really costs us 4B.

The state of Michigan, unlike the US, doesn't print it's own money; as such eventually the debt will need to be payed off to the creditors, and if the quality of living in your state is falling it's unlikely you'll be able to cover those debts in the future.

The US prints it's own money??? Since when? Last time I checked, the Federal Reserve printed our money.

 

[Dissipate]

Originally posted by: XZeroII

Originally posted by: LordMagnusKain

Originally posted by: Zebo
Same reason you must balance your books but on a very macro scale.

Budget deficits put inflationary pressure on the economy in many ways. Not only is there less money for you, me X corporation to borrow from there's less for the governemnt to borrow too. This increases the Value and intrest rate of cash when so many people are hunting for it. To recuop these costs they are going to charge higher prices for goods and services.

Secondly they are a hidden tax. At least with taxes, spending what you take in, you get something for your money in the form of services and infrastructure. Nobody ever considers "private taxes" also known as interest payments when the goverment borrows. So instead of stealth bomber costing 2B it really costs us 4B.

The state of Michigan, unlike the US, doesn't print it's own money; as such eventually the debt will need to be payed off to the creditors, and if the quality of living in your state is falling it's unlikely you'll be able to cover those debts in the future.

The US prints it's own money??? Since when? Last time I checked, the Federal Reserve printed our money.

The Federal Reserve prints money for the government. Actually the physical printing is done by the bureau of printing and engraving which is a government agency. The Fed tells the BEP when to print and how much to print then the money gets sent to member banks.

In any event the government sells bonds to the Fed which then buys those bonds with money, but the trick is that the money doesn't come from anywhere, all the Fed does is make a book keeping entry saying that X dollars were used to buy the bond. The Treasury then takes that money and puts it into government accounts which are then used to pay government employees etc. Your mailman is getting paid in dollars that literally came out of nowhere. So in this respect the U.S. government does print money, whenever it wants. It just sells bonds to the Fed.

 

[Wolfdog]

I know that this isn't michegans first major problem when it comes to economic problems. It is the place where Michael Moore got started. When the GM plant closed and laid off all of its workers. Leaving an entire community lobless. Which eventaually dried up as everyone left since the GM plant was everybodies job. The real problem is not on the state governments level. There used to be a time when public schools were heavily federally funded. As things got cut that eventually went away. Most public schools are funded by both the federal and partially from the state, but by and large the majority of funds come from the property tax. As people are laid off in mass quanities it is hard to squeeze blood out of a stone. On a local level over 500 small businesses here in the are closed as the economy went down the toilet. Sending even this state into a massive debt. Which led the state to lay off more people. Kind of a circular action isn't it? No jobs, can't pay taxes which then leads to less jobs.
A balanced budget means that the state is operating what it takes in, which means that it doesn't have to borrow which actually costs the state more money. The real problem with businesses right now is that people don't have much extra money to spend. Bush can say all the BS that he wants, but by and large the majority of the taxcut for the little people got eaten up by the newly found "energy" shortage. Electricity and gas both went up across the nation, so instead of that "extra" money being spent on extra goods and services, it went to feed into the Utility monopolies. It went to fill up your gas tank, and the rising price of core goods and services. Like groceries and the like. Alas though if you don't HAVE a job then you are out of luck altogether. A tax cut when you make nothing doesn't do crap for you.

In all reality public education is going by the wayside, not because it is bad, but because of lack of funding. When it comes down to it, the federal governmnet is by and largely behind the problem. I'm not going to qualify that statement since that would be a 100+ page paper. Although I can pretty much sum it up in a few easily to understand statements. Social security and short term unemployment payments are good, giving themselves payraises when they didn't earn it(congress,white house, sentate), and creating the largest deficit in this countries history is bad. That is money that will eventually have to be repaid. Every body and thier dog that has a credit card knows that you shouldn't spend more than you can pay off quickly. Since the compounding interest will eat you alive. The government needs to learn it, and soon.