Wednesday, November 7, 2007

Should Michigan have been worried about paying off debt or worry about jump starting its economy?

Last time I talked about the fact that it might not have been a smart ideal for the state of Michigan to have raised it sales tax since it could hurt small business in a time where that state should be doing what it can to boost its economy.

But looking at it the question “was raising taxes the right thing to do in Michigan” might not have really been the write one to ask. But giving the fact that Michigan is facing such economic troubles maybe the real focus shouldn’t have been worrying about the states debt at that time and instead worry about how it could get out the economic mess that it’s in.

I can understand the thinking of the governor when she stated that it would be hard to draw in businesses to Michigan if the state can’t take care of it’s own finances and I think it is very important to keep a balance budget. But giving that the state is facing near depression level unemployment, a large exodus of citizens, and a number of other issues there are more important things that the state could be focusing on, that would help solve these problems more directly.

At least of the time being I think Michigan should be taking more of a Keynesian approach. Similar to what Roosevelt did to get America out of the great depression Michigan and do things like starting public works projects. Fix the states high unemployment by putting people to work. Hire people to build (or fix) infraturctor, hire more teachers, etc.

There isn’t a need for anything premenate just enough to kick start the economy and when the economy stablizes (when the business sector in the state is well enough to hire most of the people getting a pay check from the publics works job) we can stop the programs.

I don’t know why people choice to take such a round about way to solve the problem when the more direct approch is often the best.

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