As Goes Kansas City . .

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So goes the Nation . . .

While John Covington closes schools and fires employees in his School District, and the nation's newsources watches and recounts the events, the same scenario goes on in almost every School District in at least 47 of the 50 states . .

The federal government and the courts have mandated state spending in their school districts all over the country to become "Politically Correct" or to hew to rules made by Federal legislators and not funding those same mandates . . Now the federal government is looking at increasing the unfunded mandates that create and support Medicaid, while cutting Federal aid to the schools. In order to balance their budgets, the states have cut school funding, and are scratching to keep their states above water . . some districts and states will fail . . probably more than we can currently predict . .

Eventually, we, the taxpayers, are going to have to make some hard decisions. Among them will be taking the "Cadillac" out of our schools, decentralizing and de-consolidating big districts, paying for it when we get it, and getting the federal government out of Education. We also must find legislators who understand that spending more money is no solution to the problems facing society, mainly because, we are out of money . .

A couple of things are going to be hard but necessary. Taxes are going to have to go up. (we have to pay for what we have already spent) and we are going to have to quit spending federal money on neighborhoods and the "less fortunate" . . as well as any other "Feel Good" expense that doesn't generate more than it costs . . Which, so far, like Perpetual Motion, we have yet to find . .

[Sandra]

There are no easy answers for the question as to how to rescue ourselves from the messes we've gotten ourselves into.

[davide]

I would put another .25 tax on a bottle of beer and another .25 tax on a pack of cigarettes. In the words of Mr. Bojangles I "drinks a bit" and I do not consider this any type of a "sin tax".

The reality is the costs on society that are inflicted by alcohol and cigarettes in health,accident, and violence are not compensated for. This money should be applied directly to the deficit.

The profit margins of the cigarette and alcohol conglomorates are HUGE and millions of Americans are addicted to thier products.

As a responsible social drinker I would be glad to kick in an extra .
.25 a beer to help our country.

[Chuckie]

A couple of things are going to be hard but necessary. Taxes are going to have to go up.
Any freshman economics major would tell you the exact opposite. When taxes go down it actually increases tax revenue because money gets transferred from hand to hand more often. Those transactions are considered income for someone so the government takes a smaller share more often.

That increased activity also means that those businesses will likely have to hire someone. That means there are new employees paying income taxes as well. Thus, more revenue for the state and federal coffers.

If taxes are raised the exact opposite happens for the same reasons.

As far as Davide's idea to put "sin taxes" on Tobacco and Alcohol...Do you know who uses those products the most? People making under 20K a year. Therefore, you are advocating a tax on the poor.

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Trust me Chuckie, I'm not spouting Keynesian Economy here . . It's just basic math. when your wife (just working an example here) goes on a spending spree, and you get the credit card bill, you have a choice, get a second job or quit eating . . that's about where we're at today in this country (and state) . .

Normally, a tax reduction (or stabilization) would create enough certainty that businesses would invest and hire . . In the current national and world situation, there is no stability, thus no certainty, leading us further down (or up) the "Yellow Brick Road" . .

This puts us in a different situation than our dads had after WWII . . They didn't owe another country three times the GDP . . Our states weren't burdened by unfunded mandates the idiots in D.C. keep dropping on them . . and somehow, because our states seem to have constitutions that require a Balanced Budget, they don't seem to be keeping up . . Which calls for either . . sh*tcanning about all of the entitlement programs that the state finances . . and telling Congress to shove Medicaid where the sun don't shine . . which we know ain't gonna happen . . or raising taxes . .

Hey, hey, hey, I'm just the messenger!

As for davide's ideas, hey, he's just a "dork" . . What do whales know about politics or economies ?

[west4567]

There are no easy answers for the question as to how to rescue ourselves from the messes we've gotten ourselves into.

There's an easy answer, but that doesn't make it a good answer: I believe the Obama administration is willfully bringing on a huge wave of inflation. If they decrease the value of the dollar (let's say, cut the value in half), the amount of the debt effectively gets cut in half, and real revenues to the government increase.

How's that? Well, salaries and corporate income will rise with inflation (in this example, they'll double, but each dollar will be worth half as much). Tax revenue will MORE THAN double, and in fact, individuals making $75K will go from the 25% bracket to the 28% bracket. Those making $30K will go from the 15% bracket to the 25% bracket.

Debt will become manageable, because it will stay fixed and get paid off with inflated dollars, really ripping off the lender (which is why the Chinese are so worried). All but the lowest income taxpayers will be paying at a higher rate without really increasing their spending power, and government continues to grow, providing more and more support to the poorest Americans; it's income redistribution wearing the disguise of an inflation problem. Those on fixed incomes that aren't inflation-adjusted will take a huge hit.

This would be a perfect solution for anyone who believes government should be in charge of most aspects of our lives, except that the economy will be characterized by the revived name of "stagflation." It's gonna be hard for Obama to dodge that name, and perhaps hard to dodge a fate similar to the one that befell the original architect of stagflation.

[Bob Nattering]

West4567 has an excellent point about the likelihood of future inflation. Also keep in mind that the money the FED has piled into financial institutions results in a vested interest the FED has in the profitability of those institutions. The best way to insure that is for the FED to keep interest rates low at the expense of their job to control inflation. Therefore, they will most likely be very late in responding to signs of inflation. That means it will be too late by the time they do.

As for the treasury, it will be business as it has been for a long time. Talk a strong dollar, but act in a totally different way. That has been the policy under administrations from both parties.

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None of this will help the states in their attempts to balance their budgets, but in fact put more states in financial peril . . And, as we are seeing, the first blood to run is the public education system . . And following closely will be state infrastructure . . we are just beginning to see that happening . .

And a good share of the money that should be being spent on "Our" Schools and highways (etc.) is instead being spent to fulfill unfunded Federal mandates for Medicaid and welfare programs.

This might even cause the states to depend upon the federal government for aid and assistance (by receiving more worthless dollars) and giving up their constitutional rights, becoming nothing more than different colored entities on a paper map . . in other words, relinquishing their "State's rights" . .

ButwotthehelldoIknow?