JACKSON – When the economy is bad and revenue slows, we have to cut back on household expenses, and government should trim spending, too.
That is a common mantra from both sides of the political aisle. Politicians were uttering it time and time again during tough and intense budget debates at the state Capitol earlier this year.
On the national level, politicians say the same thing.
Another popular bumper-sticker slogan: Government should be run like a business.
The only problem is, government is not like a business or a household.
If it were, we would all be in trouble.
Government has a different role than a business. Business’s primary function is to make a profit. Government’s role, most would agree, is to provide public safety, transportation, education and economic development.
Many others – a vast majority, I would argue – would agree that the government is supposed to provide a core level of support, such as food stamps for the needy, unemployment benefits, retirement benefits. And yes, many include health care – at least for some – in the core level of support.
True, in tough economic times, our family, like many, has had to cut back. Some of the cuts actually hurt, but many are more of an inconvenience. If we do not get the new floors that my lovely wife and I are considering, we will not be hurt.
Disappointed? Yes. Hurt? No.
But that is a different kind of hurt. Perhaps we deserve it for even considering such major expenditure in these tough times.
When the economy sours and revenue collections drop, that is the time that citizens need government the most.
And unfortunately, the increased needs of citizens cost government more.
More people losing their jobs costs more in unemployment benefits or food stamps. More families falling below a certain income level means additional children eligible for Medicaid or for the similarly designed Children’s Health Insurance Program.
For his whole time on the political scene, Haley Barbour has preached with a certain amount of passion smaller government and reduced government spending. He considers himself a fiscal conservative. Most would agree with that assessment.
But guess who is trying with all his might to avoid cutting Medicaid during the current prolonged slowdown in Mississippi tax collections? That’s right – Republican Gov. Haley Barbour.
One of the primary reasons Barbour gives for not wanting to cut Medicaid is that in the tough economic times, more people need it.
That’s right. Government has a bigger role when the economy is poor.
So state policy makers have to deal with crafting a budget with less revenue when the demands on government are the greatest. That is one of the reasons House and Senate leaders and Barbour struggled so to pass a state budget earlier this year. Expect more of the same in the coming year.
If not for federal stimulus funds sent to the states to help in numerous areas, but especially in Medicaid and education, the cuts that state leaders would have had to make would have been devastating.
Business does not have to worry about such issues. If revenue falls during tough economic times, businesses can lay off people to ensure some type of profit.
And what happens to the people who get laid off?
They hope government can provide some relief until they find another job.
That’s the difference. Government is a last resort. Business is not.
Contact Daily Journal Capitol Bureau reporter Bobby Harrison at (601) 353-3119 or email@example.com.
Bobby Harrison/NEMS Daily Journal