Friday, August 29, 2008

The O'Malley Deficit

There is other news today. Martin O'Malley's deficit was a major story in the Washington Post today:

Maryland could face a budget shortfall of up to $1 billion in its next fiscal year despite a series of tax increases and spending reductions that were intended to largely solve the state's chronic fiscal problems.

The grim assessment, contained in a letter this week to leaders of the General Assembly, blames a sluggish economy that has significantly slowed tax collections and urges "that swift action be taken to mitigate the problem."

"If the current doldrums are seen to persist through fiscal 2010, we could be looking at . . . a problem of up to $1 billion," wrote Warren Deschenaux, the legislature's chief fiscal adviser. "Although time will tell, at this point it sure looks like we are in for a bumpy ride."
Republicans and the conservative bloggers greatly savaged O'Malley's budgetary policy. To raise taxes and simultaneously increase spending is foolhearty, arrogant, and immoral in the best of circumstances. It is damn near criminal in a poor economy, as O'Malley and the General Assembly decided was a good during the Special Session and the 2008 General Assembly session. We have noted time and time again about O'Malley's irresponsibility when it comes to fiscal matters. And time and time again, we have been proved right.

Annapolis Democrats like to pretend that our economy is recession-proof. In April, I wrote:
The state budget should have adequately prepared for increases in Medicaid and unemployment claims when the General Assembly adopted it last week, but I'm sure that pet projects were more important to legislative leadership than this already existent spending.

The argument that Maryland does not spend enough and that we should continue to maintain current spending levels during the O'Malley Recession flies in the face of responsible government....
And we have been proven right time and time again that increased spending to cover pet projects and to make special interest groups happy is more important than being responsible fiscal stewards. They continue to spend it like they stole it.

Clearly, with diminishing tax revenues due to the combination of higher costs of living, the national recession, and the O'Malley tax hikes, the state is now reaping what it has sowed. The O'Malley Recession and how given us the O'Malley Deficit. There are only two ways out of this. The question now is whether O'Malley and his reckless spenders are going to do the right thing (cutting taxes and cutting spending) or the wrong thing (raising even more taxes).

I look forward to showing them the way to their reckoning.

(Crossposted)

2 comments:

warpmine said...

So sad but of course predictable. Question is who are THEY going to blame?
Can't be the Bush economy as it was still strong in MD. Growth last quarter was 3.3%. Can they blame Gov. Ehrlich?
One thing you can't explain to a liberal is economic related tax policy. High taxes and spending produce sluggish economy and less revenue. Oh, never mind, just but the blinders on and the ear plugs in and keep on trucking er taxing.

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