by Robert Stadnik

Created on: January 27, 2009

Most states are now grappling with deficits in their budgets and are debating how to close the gap. Common notions have been that states must either slash their spending or raise taxes to prop up falling revenue. But look at California: the state has one of the highest taxes in the country yet is facing an unprecedented budget deficit. Raising taxes never solves the problem because our genius politicians will always find a way to spend the extra money. If states are to solve their budget problems then they must exercise fiscal responsibility.

During prosperous periods states receive a plethora of revenue that fills their coffers. That money is eagerly spent by state legislators on all sorts of programs. No one looks ahead at saving money to have on-hand when a recessionary cycle hits. Politicians are only interested in one thing: reelection. They willingly spend state money to fund all sorts of entitlement programs that will appease them to various voter groups and ensure their reelection to office next term. They're not interested in planning ahead and preparing the state for when revenue falls.

There has been a lot of blame placed on individuals who spent money on houses they couldn't afford, purchasing flat screen televisions or a new car rather than putting money in the bank for a raining day. State governments acted no differently. It was easy for legislators to fund programs that would win them popularity or earn them their mark in their political careers. Now politicians argue amongst themselves how to get the state out of the red.

Fiscal responsibility is the only avenue that will resolve the deficit problem in states facing them. Politicians don't want to exercise that practice as they view it as unpopular. They don't want to alienate a voter group by cutting spending in any particular area. But it has to be done. As stated above raising taxes won't solve the problem because the government will always find a way to spend the money. States must cut their budgets not only to eliminate their deficits but to also start saving for when the next recession hits. If individuals are to practice financial responsibility then the government should lead by example. If states, and the federal government, continue to increase their deficits eventually the dollar will be devalued and not worth anything in the international market which will bring a sleuth of new problems.

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