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Monday, December 1, 2008

We are all Keynesians now

President-elect Obama says there is no time to be lost to get the stimulus package underway (We are all Keynsians now, Boston Globe, November 25, 2008: A28).

Yet the current administration drags its feet at getting help where it is urgently needed -- unless the needy are the commercial banks. In every state of the union, revenues are falling and Governors are desperately trying to cut expenses and people in order to balance their budgets. In California there is an $11.2 billion shortfall; Michigan has a $2.00 billion shortfall which could skyrocket if the automobile companies collapse; here in Massachusetts we face a similar shortfall. The story is the same in every state and in every city and town which are constitutionally required to balance their budgets.

Why doesn't the Congress pass this part of the stimulus package immediately -- every congress person and every senator comes from an affected state. Why are they waiting?

Delay just exacerbates the situation as we begin to see layoffs among government and municipal workers. These people then file for unemployment benefits and the fiscal gap for the states and cities widens.

Of course, there are some creative ways of avoiding layoffs like everyone (from Governor and Mayor on down) in state and city taking a temporary wage cut until economic conditions improve. But I have not seen these mentioned in any of the suggested plans. Why not?

Sent to Boston Globe

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