A recent editorial echoed a rather misguided report that says that reduced tax collections should lead to cutbacks in state and other government spending. First off, one must recognize that groups like this have defined debt as bad by any means. These are the same groups that have promoted such disproven concepts as trickle down economics In fact, debt has a meaningful place in all budgets and that is to balance available funds and required expenses. By required, I don’t mean drop dead expenses — I mean reasonable investments that lead to increased while later benefits. Now is definitely the time to use such debt to drive recovery and, even more so, address delays that have been growing.
This is especially clear if one looks at roads and bridges in Western Mass. Let’s take a closer look at what State expenditures really mean. This money doesn’t vanish, it goes into local economies as projects, and the debt accrued is at a better rate than individuals can borrow. In the end, the state economy gets a boost which, in turn, does lead to better tax revenue sooner. There is plenty of evidence that this works and austerity doesn’t.
Don’t get caught in the call for debt reduction at the wrong time. For a very visible historic case, just study FDR and the New Deal.
Rich Roth
Greenfield