Thursday, November 24, 2005

State Budgets

Jack Kennedy surrounded himself with great writers. The rising tide lifts all boats is one of the best explanations of why capital gains taxes should be rolled back. Now as the best Christmas shopping season is about to hit, NYT points out Bushonomics is helping states. The 5% unemployment rate means states are cashing in. (Hat tip:

According to the National Association of State Budget Officers, is that only five states were forced to make midyear budget cuts, totaling $634 million, in the fiscal year that ended, for most states, on June 30.

That's a bass-ackward way of saying 45 states are on target or rolling in money. The New York Times story buries the fact that the five states include Louisiana, which basically was killed by Hurricane Katrina.
But states face major problems. Medicaid (health insurance for the poor) and public employee pension plans are torpedos headed for their bows. Projections in Florida is Medicaid will consume 61% of its budget in the next 10 years, up from 24%. Attempts to rein that sucker in will require political fortitude that sadly is lacking nationally. The Terminator going oh-fer-eight on his ballot initiatives in California is not encouraging.
Still, the national economy is strong. Now is the time to fix these internal problems. I doubt that will happen.
Cross posted at Don Surber.

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