Saturday, February 20, 2010

Oregon Looks to World's Biggest Debtor for Economic Help


The state of Oregon is facing a budget crunch in the next seven years. And where does it look for an answer? To a bailout, of course. Not only that. It's a bailout from a source with even bigger financial problems than Oregon's.
"Oregon needs another federal bailout or it will face massive, billion-dollar-plus shortfalls for the foreseeable future, one of the Legislature's chief budget writers cautioned Wednesday.

The state has enough money to get through the current two-year budget cycle -- barely -- said Rep. Peter Buckley, D-Ashland, co-chairman of the Joint Ways and Means Committee. But the state's financial picture turns increasingly grim after that."
So, Oregon looks to Uncle Sam (who owes $13.4 TRILLION) for a bailout for it's piddling $2.5 BILLION estimated shortfall for 2011-2013.

On a graph of debt this is how silly it looks:

The problem is that Oregon has "snail-paced economic growth" and the Democratic state leaders don't want to raise taxes again after just raising them (a raise not thought out well enough to be of real help beyond the current year) or cut spending.

Further, just to come close to this year's budget needs the state is "transferring" dedicated funds to the general fund including:

- "Oregon Public Utilities Commission's operating budget"
- "a 'protection and education' fund in the Department of Justice"
- "a fund that covers unemployment benefits if a self-insured business goes bankrupt"
- "a pot that pays for administering worker compensation claims"

If a private person or company co-opted dedicated funds, they would be facing a lawsuit and even prison. But, the state of Oregon can do it because Democratic legislators are "out of options".
"Buckley acknowledged the sweeps have stirred the ire of some influential companies. But he said lawmakers are out of options."
As though this were a fat cat issue. How does the Oregon Public Utilities Commission help "influential companies"? Or a Department of Justice fund for protection and education? Not to mention unemployment benefits for a bankrupt self-insured business or administering worker compensation claims?

The option that most Oregonians choose when faced with too little income and too many expenses is to cut expenses. But, Rep. Buckley and his fellow Democrats find cutting expenses too difficult. Which is a major reason for Oregon's "snail-paced economic growth".

Elections have consequences.

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