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Taking Just a Pinch

Chances are that if you hear someone is promising to give you a good, quick pinch, you are going to move out of the way. Why? That’s simple. Pinches hurt, and we’re not just talking about pinching body parts.

You can be rest assured that when the government decides to start doing pinching, it is going to hurt (subscription):

The gap between expenditures and state revenue has grown steadily over the last three months as New Mexico increasingly finds itself being pulled into the national recession. For just the third time in 20 years, the state now faces the prospect of a revenue decline during the current budget year.

Miller and other members of the Richardson administration said Monday that they believe the combination of recouping unspent infrastructure appropriations, imposing minor budget cuts and a hiring freeze on state agencies, and taking a pinch of help from the state’s cash reserves can balance the budget for the current fiscal year that ends June 30.

Ok, let’s start by repeating the obvious. Facing a budget deficit should not have come as big surprise to anyone. We have had to do it three other times in the last the twenty years. You’d think government would learn. You can’t spend, spend, spend in good years, because inevitably there will be lean years, and then you’re going to have to make some cuts.

Now, what should the government do first to fix this problem? Well, that’s relatively simple. They should look at all new recurring services and expenditures that have been added since Richardson came into office, and start cutting them.

The thought that they can fix this problem by simply “recouping unspent infrastructure appropriations” is ridiculous. Let me re-state that. If you think this is a one-time momentary blip in an otherwise booming economy, than it makes sense to just cut back on previously planned expenditures.

But, if you face reality and acknowledge that next year is likely to be just as bad, if not worse, then you realize that approach is nothing more than sticking a finger in a collapsing dam to plug a hole. The only thing worse than that approach is “taking a pinch of help from the state’s cash reserves.”

Taking a pinch from our reserves is the equivalent of robbing our children blind while they sleep. Rather than readjust to a budget that is within our means, we are talking about guaranteeing higher taxes on our children.

Plus, consider that this economy could sink further before it begins to rebound. If we’re deciding to “pinch” at the first sign of economic weakness, then we’re practically guaranteeing that we’re going to be amputating when this gets worse, and it will get worse before it gets better.