Economists in Massachusetts have indicated that we are going to have a very slow recovery from the recession. Last month’s revenues, despite higher sales and other taxes, were off by $243 million and it is projected by the Department of Revenue that we have to reduce projections by $600 million for the next year.
This does not bode well for the Commonwealth, obviously. We are spending down our federal stimulus money and have about $600 million left in the stabilization fund. Next year’s budget is going to have to cut more spending at a time when many services have already been severely cut back.
If you are one of the two or three people who read this blog on a regular basis, you know that I have been saying that consumer spending is not rebounding and that job loss will continue to impact our recovery. At this recent hearing, many of the economists who spoke mentioned both of these factors. Let me once again state that in this time of fiscal downturn, we need to invest money into our efforts to create jobs in Massachusetts. While some are saying we have too many economic development agencies in the state, I believe we need to take advantage of all of the programs that have worked in the past to try to prepare ourselves as we come out of this economic crisis. The only way to restore fiscal health is the creation of jobs and that means working with the employers of the state to find ways to remove barriers on job creation. More on this in future posts.
2 comments:
Dan - you are so right! Every time a job is outsourced, or one person is laid off - 20 people at elask "hunker down" and stop spending money. I wish rather than cutting jobs UMASS and Harvard and state government added jobs - just maybe EACH job causes 20 people to take hope, and stop that bunker mentality.
Most of the economy runs on hope. The economic stimulus plan seems like a lot of money, but in the trillions spent on the economy in a year, it is a drop in the bucket. The stability comes from confidence in the marketplace that things won't get worse. it is behavior modification. The problem this time is that people have no expendable income and that will slow growth. Getting better slower is probably better in the long run (unless Wall Street goes nuts and we return to that destructive behavior), but that is little comfort now when people are working to the end of the week and having a hard time. There has to be a balance. I don't think we are there yet.
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