First, I’m back. Second, I didn’t pay a whole lot of attention to politics while I was gone (funny how life in the Caribbean doesn’t revolve around US politics!) I did however, pay a bit of attention to the on going economic nonsense. A quick observation/comment on that front.
While I was gone the Dow was:
Down 700
Down 100
Up 940
Down 77
Down 730
Up 400
Down 120
Anybody got some Tums?
As I mentioned before I left, the stock markets have left any semblence of “investing” and have become simply “betting.” That said, I’m betting that “investing” returns within the next few weeks. It looks like we’re watching the final swings of a pendulum that got released from a very overextended position and has to redetermine center.
It doesn’t matter whether you are retired, self employed, unemployed, wealthy or just making ends meet, the current economic uneasiness is not fun for anyone. However, silver linings can be found even in these challenging times; you just need to know where to look.
As I was traveling home I saw this headline in the USATODAY:
Amid meltdown, cities slash services
Seems that states and local communities are finding that decreasing home values and purchasing along with softening incomes have decreased all of the main funding mechanisms these entities rely on. Unlike the Federal Government, local and state governments don’t have the luxury of printing more money to solve their budget problems. Instead, local and state governments are left with the options of either increasing taxes or cutting budgets GASP!
Yes, cities across the country are going to see drastic cutbacks:
Last fiscal year, Phoenix’s tax revenue fell $89 million short. So the city doubled the cost of swimming lessons at city pools to $12 per session
and
Even wealthy cities are feeling the pain. Aspen, Colo., will delay construction of a $360,000 foam pit for training snowboarders in the city gym.
The money quote from the article is this:
“There’s just no choice,” Fairbanks said. “With all the cuts we’ve made in the past, I don’t think there’s anything left that someone in the community doesn’t highly value.”
And that’s the problem. Cities and states have gotten fat, dumb and happy while they’ve seen their incomes rise in unprecedented fashion during the past decade. Rather than focusing on “needs” and essential services, states and cities have found things that the “community highly values” to justify increased taxes.
Have any of you lived through a government shut down because of budget issues? Minnesota had one a few years back. The State cut back only to essential services meaning public safety, everything else was shut down. I don’t know of anyone that was clamoring for the budget to be settled to get all of their lost services back!
Especially at the city/county level, now is the time to stay engaged in the process. As your local officials work to adjust budgets to recognize their new economic environments stay close and focus them on needs versus wants. It’s far too easy for Mayors to start talking about “cutting police protection” when they should be talking about cutting administrative staff and programs that are outside of essential services.
If budgets are adjusted simply on a % basis, you may have a smaller budget but one that is still funding “highly valued” but nonessential services while underfunding the services, like police, that really are one of the key responsibilities of government.
If diligence is pursued during these difficult times you’ll have a much better base to work from when things improve. A little work now can surely make for a silver lining later on.
