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Saturday, September 29, 2007

Michigan is in a pinch

The article. http://www.freepress.com/apps/pbcs.dll/article?AID=/20070928/NEWS06/70928070
I came across this very interesting article about a big pinch that the state of Michigan is currently in. As of October 1, 2007 35,000 state workers are being laid off due to a 1.75 billion budget deficit. Only one-third of the states employees, about 17,000 will remain to work in the constitutionally responsible jobs. The main areas that will still be running are the prison system and state patrol but only 200 officers. The Michigan state police stations however will all be closed. Most of the public health programs will still be in effect but on limited staffing. The courts will still be running but again on limited staff. The state lottery will close and the casinos will also have to be shut down do to having no gaming regulators on site to monitor operations. All agriculture departments will be shut down; this means that there is no one to monitor the transportation of livestock and dry grain out of the state and therefore no exportation. Every state run department is ether going to be closed or on minimal staffing. Of the departments being closed or minimally staffed only the very necessary departments will have the minimal staffing. State run departments such as national defense and in state defense such as cops will still be in place but minimally staffed. Security of water sources and emergency health and care of the needy will be also be minimally staffed.
It seems as though the state is going to be reverted back to a libertarian minimalist governed state. Back to where only the necessary protection of the population will be in power. The “nanny” state that has been in place looks to have failed and is coming to a crashing halt over budgeting issues. The budgeting issue is also a simple one; they don’t have the revenue to support all the departments they want to run. This huge crisis as the media is calling it is no different than a business that is not selling enough products to support all the employees it has. When a company cannot afford its employees, it fires a few of them. I don’t think this would have been a huge problem if the departments were not so centrally run. The budget of the state is being debated on and has till Sunday the thirtieth at midnight to come up with a new budget. This budget encompasses all aspects of all state run programs. It feels the same as a centrally planned government from the cold war era; where market forces are not getting the vital information to companies so they can better manage their business. Now that the budget is in huge turmoil and down to the wire everyone is panicking and has a huge discussion to make in a relatively short amount of time. If the departments were not so centrally planned, I think it would have been easier to have managed the turndown in the state revenue. Even privatizing departments could have lessened the blow of laying off 35,000 people all at once. In the article it states that the department of labor & economic growth will be mostly shut down however unemployment claims can still be made over the internet and that unemployment checks will still be processed. I do not envy the few people there that get to come to work on Monday when 35,000 people are axed from their jobs. I think this is a good wakeup call for what the future could hold If the government were to get to large to be able to effectively see the market forces at work. The moral of the story, don’t put all your eggs in one basket because if you were to trip over a rock you didn’t see, you could end up with only a scrambled mess.
Robbe Uhrhammer

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