In addtion to the $15.6 trillion federal deficit, the collective debt of the individual states amounts to an astounding $5.547 trillion dollars. $3.1 trillion of that enormous sum is due to unfunded pension costs. The imposition of Obamacare will force that already indigestible figure to skyrocket even further.
State governments cannot continue on the path that led to their current precarious position. The Heartland Institute is advocating a 10 point program to address fiscal problems in the states:
1. Keep taxes low. High taxes hinder economic growth and prosperity.
2. Don’t penalize earnings and investment.
3. Avoid ‘sin’ taxes. Taxes on specific goods and services are often unfair, unreliable and regressive.
4. Create a transparent and accountable budget. Focus attention and resources on providing those services that are the core function of state government.
5. Privatize public services.
6. Avoid corporate subsidies. Subsidies to corporations and selective tax abatement are questionable politics and bad economics.
7. Cap taxes and expenditures.
8. Fund students, not schools. States and cities that have experimented with school choice have seen gains in academic achievement.
9. Reform Medicaid programs to eliminate waste and fraud.
10. Prohibit state and local unions from deducting funds used for political purposes from the paychecks of public workers.
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