Debate Continues Over More National Debt

Americans seem to like simple arguments with simple solutions. Case in point: Recent polls indicate increasing concern over and opposition to the nation’s growing debt, despite the fact that there has been very good reasons for the added government spending. The economy has plummeted, therefore unemployment and other social service needs have skyrocketed while at the same time, government spending was needed to stimulate the economy.

Accepting this is far from simple for most people. And, so, the reason often gets lost in the argument, as was the case when Michigan Gov. Jennifer Granholm and Indiana Gov. Mitch Daniels recently sparred over the $787 billion stimulus package and job creation on Fox News Sunday, comments from which were later posted by Politico.

Granholm, a Democrat, said Michigan’s $3.7 billion in stimulus money has created or retained roughly 33,000 jobs in her state, where unemployment is 15.2 percent. Part of that can be attributed to green initiatives that have benefitted the auto industry, she said.”But clearly some states need more help,” she added. “There aren’t jobs on the back side right now. We need to be able to extend unemployment benefits.”

But Daniels, a Republican, stated the stimulus hasn’t helped his state, where the unemployment rate was 9.7 percent in August. “Government spending doesn’t create jobs …We have to improve the conditions for people to create wealth,” he said. Daniels added that targeted funds for states struggling to balance budgets such as California is not fair.

Bottom line: Most economists agree that without the additional government spending, the economic situation would be much worse. At the same time, in a bad economy, with significant unemployment rates, more people need assistance from Government. It’s hard to believe any governor would oppose receiving state fiscal relief from the Federal Government given the threat of not being able to provide basic services and massive layoffs without it. Most communities are built around government and additional cuts in government spending are likely to lead to layoffs, which in turn will further hurt the employment situation. Think about it – the government does employ many in your community – from trash collectors to police to firefighters.

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