To the People

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or TO THE PEOPLE.

Thursday, January 24, 2008

States and Cities "Cut" Budgets While Still Increasing Spending

George Orwell, in his dystopian novel 1984, created the word "doublethink." To quote Orwell, doublethink is,
To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient.
The concept of doublethink in Orwell's invention of it applied to governments and is relevant to the states and municpalities who are telling the people they are making "painful cuts" to government spending while they are actually increasing spending and the tax burden in a difficult time.

Exhibit #1 Maryland: Governor O'Malley raised taxes $1.4BN to address the "structural deficit" (another Orwellian term) and made $500MM of "cuts." Yet the MD budget is increasing 5.9% in 2008.

Exhibit #2 New York City: Mayor Bloomberg has "cut" the city budget. A NYT article headlined "Bloomberg Plans Cuts for City Agencies" reads,
With an already dim fiscal picture turning darker, Mayor Michael R. Bloomberg on Thursday proposed a budget that would increase spending by 3.7 percent but cut money from every city department, from sanitation to schools
The big conclusion here is that they are indeed cutting back every department but still are spending more money each year despite the cuts in services. The reason: out of market promises to union workers in terms of wage increases and retirement and health benefits. If you didn't like the real estate bubble, wait till this one comes home to roost.

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