Roughly half a million adults in South Carolina are unemployed, underemployed or have given up looking.
That is nearly 1 in 4 eligible workers in the state. And the months ahead look grim to John Rainey, South Carolina’s chief economic forecaster.
“I don’t feel hopeless, but it’s hard to feel hopeful,” Rainey said. He is chairman of the state Board of Economic Advisors, which tracks tax collections and unemployment filings and sets revenue forecasts for government spending.
Back in 08, when I was asked in business settings what I thought the economy would do in 09 — if it would recover by mid-09, as incidentally so many prognosticators were predicting — I was able to confidently assert that it would not, not even by the end of 09.
I can revise my prediction now and say that I believe 10 will be just as hard or harder than 09. And the businesses with which I work will be basing their efforts and strategies on that.
I didn’t say why, of course, I could so confidently predict continuing economic malaise, but it was because Obama’s policies would inevitably mire the country deeper and delay the necessary recovery. Which it has nicely done.
We are now about a year and a delayed from beginning what needs to be done in order to recover.
And we are far far far far deeper in debt now, having spent so foolishly on things that would at best serve to somewhat disguise and paper over the mess we are in.
To name just one small instance — we have destroyed perfectly good old cars, and given vast sums of money to people to buy new cars [a double hit, in that the old cars didn’t go to people who needed them], in order to provide an infinitesimal bump to the car companies that should have gone bankrupt long before they did and without the billions we used to bail them out in order to keep them from going bankrupt [remember — “an impossibility” at the time] which they now have done, and this with families many of whom should not have bought the new cars even with the government help.
That is just one small sampling of the incredibly foolish and harmful actions that have taken place over the past 1.5 years, which have served merely to add to our debt and the money supply and not at all to actually help the country recover from the financial industry meltdown.
What a mess.
Solid and thoughtful businesses will, however, work hard with all of that in mind, understanding just how challenging a market 2010 will provide. We’ll be working harder and smarter as much as we can in order to make up for the sheer buffoonery of what our elected officials have now done to us.
I note that the main point of the article — mentioned at the end — is the perfectly natural decrease in tax revenue that occurs during a recession. They say that like this is a bad thing!
Truth is, during the fat years our state and others spent like drunken congressmen. They did not store up for the lean years. Instead they fully allocated all that they received and expanded budgets. Now they are having to cut those budgets back down again — but they should have stored up, not spent.
The article states: “The issue: State revenue is out of whack. The recession forced massive budget cuts worth nearly $1.6 billion, or about 24 percent of general funds, since 2007. General funds pay for public schools, higher education, prisons and social welfare programs and come primarily from sales and income taxes. Total government spending is about $20.2 billion in South Carolina, when including federal money and other sources such as tuition and license fees.”
And makes the usual implication that if only we had not repealed so many property taxes and transferred that to sales taxes, all would be well.
What that really means is this: had we not repealed some property taxes, those hit hard by the recession [i]would be forced to pay the same amount or more as before the recession in property taxes, and would have no recourse to simply not buy stuff, as they are doing now.[/i]
But that’s precisely why the switch away from property taxes towards sales taxes should have occurred. In fact, we should have more of that, please!!! We need to repeal house property taxes as well.
When the economy shrinks, the government should recede. That is only natural and right. Instead we have this mistaken notion that the government should expand [through tax dollars that those struck with the recession can ill afford] when the economy shrinks. And of course, the government should expand when the economy expands too.
The government should ever expand, according to some.
I have no sympathy at all — none whatsoever — for the drunken legislators of SC who spent so freely during the fat years. Let the government shrink.