by Roddy Harris

Created on: January 07, 2009

When there are budget crisis's it is always the easy way out to cut spending and increase taxes. The easy way is to cut spending and increase taxes and fees but does this work to actually help the state out of the financial crisis. Usually this function only shifts the burden from the state to the people who are also in financial crisis. Included in the cutting of spending is usually a cut in services for the people in society who need the services most. These functions usually effect healthcare and are targeted at the lower income levels, the disabled and the elderly. Yes I understand that most of these people do not pay into the system but they need the services to survive. What is really hard for politicians to understand is that the families of these people have to take up the slack and pay more of their own money for fewer services. Most of these people do not have the necessary financial resources to do this. The increase in taxes is an additional drain on their resources. The state and federal governments then spend money to make sure that these needy people are not ripping off the system by using the services available to them. They spend untold amounts of money with additional watchdog services making sure that the state is not being robbed by the people or institutions providing the services. This puts an additional strain on the institutions providing the services and can in some cases take away from client care. Most of the problems are because the state has instituted stricter rules and regulations that the people and service institutions must meet which put additional financial burden on them. The state takes away funding and still requires that these costly rules and regulations be followed. Who pays for them? In most cases it falls to the responsibility of the local governments to make sure that the services follow the rules and regulations instituted by the state. This is usually financed by additional property taxes paid by the landowners.

With all of the people who are having trouble making their mortgage payments the last thing they need is a huge jump in their property taxes. Now you have a double problem. Many of these people will have to go into default because of the increase in their payments by the taxes. This is a vicious cycle that does not help anybody. When the homeowners default on their loans the taxes are not paid putting an additional strain on the local government's budgets. It is something akin to the trickle down economic

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