A Billion-Dollar Cold Turkey Dinner for Rhode Island?

In an op-ed in today’s Projo, University of Rhode Island Economics Professor Leonard Lardaro connected the macroeconomic to the macropolitical…

The upcoming election is more important than is generally assumed for Rhode Island, because federal bailout money will no longer be available by this time next year. Fiscally, this will force us to go “cold turkey.” The resulting jolt to a fragile upturn may well force our state into a double-dip recession. The citizens of this state need to be proactive, even though our elected officials seldom are.
The impact of Federal money and of its loss is evident from a series of budget graphs presented here at Anchor Rising at the end of August.
State government expenditures in Rhode Island have been growing steadily for the past decade, and are about 50% more than they were a decade ago (adjusted for inflation) (and begging the question, do you feel you are getting 50% better service from the state compared to a decade ago?)…

RIBdgt2


Maintaing that growth trend over the past two years has required as massive infustion of Federal funds into Rhode Island’s government, which have grown by 40%-50% since just 2008

RIBdgt4


If Federal money drops back to the vicinity of 2008 levels in the next couple of years, it will represent a cut of about a billion dollars from current annual budget levels. The question is, will the legislature elected this November continue to be committed to the steady growth in RI government that has characterized the past decade (at least), and plan to continue that growth by taking a billion dollars per year in new taxes from Rhode Island residents, or will the new legislature seated in November begin to make up for the loss by reducing the spending done by the state?

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Bill
Bill
10 years ago

Most respectfully and to the contrary, there will always be “bailout” or other “funny” money from Washington for RI. Obama knows that those who become dependent on welfare, bailouts, and other such federal handouts will vote democrat. The “bailout” will likely be called something else, but I have no doubt it will arrive just in time to obviate the need for RI’s public unions and the state legislature (of course, largely one and the same) to begin thinking seriously about reforming anything.
Gee, and did I hear that Obama is coming to the area in part to support Cicilline for Congress (assuming Cicilline isn’t indicted beforehand)? That’s a good confirmation that nothing will change — the well-oiled machine will continue to print money in Washington to buy the needed democrat votes.

Sammy
Sammy
10 years ago

there will always be “bailout” or other “funny” money from Washington
posted by…Bill
The poorest states are Red States, with
GDP 25% lower than Blue States
Red states receive 20% more Federal transfer payments…. “funny money”
than the blue states…
and you honestly think rebuliclowns can cut spending…their constituency (THE RED STATES)
won’t … and cannot allow it….
red states are little more than massive set of republiclown sanctioned WELFARE states… living off the blue states… the federal government should make everyone in red states take drug tests before we cut loose another dime of entitlements to their lazy drunken sanctimonious denial ridden fat asses… if they don’t pass 100% they get nothing… .
{Delusionally titled sig line deleted.}

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