Christine Stuart reports that a top economist is saying up to 90,000 jobs could be lost in Connecticut thanks to the financial services meltdown:
Lanza told officials that direct industry loss of financial services jobs will likely top 30,000, while indirectly it could trigger reductions of more than 55,000 jobs. “So total job cuts could approach 90,000,” he said.
“Connecticut will probably become one of the hardest hit states in the country,” Lanza said. (Stuart)
Connecticut has been hard hit by recessions in the past. The one that we suffered through during the early 1990s is the worst in my own memory, but each time we’ve managed to come back.
It may be much more difficult to come back this time.
Lanza’s solution, predictably, is to cut as much from the budget as possible to make ends meet, rather than raising taxes–which “makes things worse.”
I wonder about that.
It’s taken as a given that raising taxes by any amount will hurt the economy more. But exactly how true is it? Is it worth losing bus services, for example, at a time when more people are relying on public transportation? What about cutting human services during times of crisis and trauma, or cutting criminal justice programs when, due to rising unemployment, crime spikes?
How about cutting library services now that more and more people are using the library? Or, as the article suggests, cutting money going to state colleges and universities when more and more people want to go back to school to earn another degree, and find work in a different field? Isn’t that one of the points of the state university system, to help our citizens better themselves in order survive crises like this?
The fact of the matter is that now, when our government is looking to curtail state services, is when people need those services the most.
Raising taxes cuts into buying power. But cutting state spending essentially does the same thing, as state workers, people working on state projects and those who rely on them have less money–even if, as has often been suggested, state employee unions give up some concessions in either salary or benefits. Neither option is good.
The question then becomes one of priorities and philosophy. Should we cut spending and not raise taxes, and hope that the effects on our economy are as mild as possible, and that the lack of suddenly missing services will be counterbalanced by more jobs and a quicker recovery? Or should we cut some spending, perhaps lowering salaries or getting rid of nonessential services (whatever those might be) and raise taxes to cover the cost of services that we feel are real priorities, like transportation, education, human services, programs that help children and criminal justice?
That might prolong the recession in Connecticut, but our people will have the services they need.
It’s not an easy choice. Governor Rell has already signaled that she is in favor of cutting spending rather than raising taxes even a little. This means that the cuts she’ll need to put through in order to balance the budget will be deep and incredibly painful, and she’ll have to fight every step of the way to get them all enacted.
This is an excellent time for government to discover what its mission truly should be, and how best to accomplish that mission as effectively and efficiently as possible during these tough economic times. But if we cut out government services that people truly need, the “core missions” of government that Rell herself has talked about, even in the name of balancing the budget, then the state will fail in its mission.
When the need to cut spending bumps up against the need to keep the state’s “core mission” services going, all options should be on the table.
Stuart, Christine. “What Goes Up Must Come Down.” CT News Junkie 10 December, 2008.