Thursday, August 14, 2008

Economic Growth

SEARCH BLOG: MICHIGAN and TAXES

It took a little digging, but on page 100 of the Michigan "Executive Budget Fiscal Year 2009" I was able to locate the state budget summary for 1999 through 2009. The "bottom line" is compared with state employment totals from the Bureau of Labor Statistics [I averaged the monthly numbers].

Except for the brief rise in employment in 2000, the state has shed 300,000 employed people. During that same time, the automobile industry has been struggling to survive... the primary source of the lost employment... and generating lower profits.

But somehow the state has managed to see its budget grow by $12 billion or 37% from 1999 to 2009. Inflation, as measured by the CPI, was up about 30%, so real government spending increased by about 7%. That is small for 10 years. Hardly noticeable... except the revenue base was leaving the state.
I might be wrong here, but it seems like something... or someone... may be getting squeezed to feed that growth.
Admittedly, a lot of the growth occurred before the state government intelligence gathering agency recognized the severity of the economic situation facing businesses and individuals. But that didn't stop the economic growth... of the government.
Perhaps I missed the part where Lincoln spoke about "Government of the Government, by the Government, and for the Government." But it seems to me that an inflation-adjusted decline of 7% may have been more appropriate for the government's budget.
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