"In the most shocking cut yet seen in the nationwide state budget cutting frenzy, 38,000 poor children in Arizona no longer have health insurance. Arizona policymakers eliminated the State Children’s Health Insurance Program–a first for any state–as a budget gap closing measure.
Like many governors faced with a budget crisis caused by the Great Recession, Arizona Governor Janice Brewer said she had a duty to cut this program in order “to preserve State government’s fiscal integrity and to ensure Arizona’s long-term health.
But if the Governor really wanted to achieve these two important goals, she would have put the budget ax back in the shed.
This does not imply that state governments should stop looking for new efficiencies or dismiss concerns for frugality. These efforts must continue, as always.
The problem is that budget cuts during a recession are counterproductive. They deepen the recession and stifle recovery by immediately putting people out of work, reducing public and private investment, and abandoning residents in their hour of need. [...]
Since budget cuts are harmful, do states have another choice? After all, states, unlike the federal government, are limited in their ability to engage in “deficit spending”—spending more than the money they raise each year.
Yes, there is an alternative. The best choice is progressive tax policy– not “progressive” in a political sense of being generally pro-tax, but in the economic sense of taxing individuals and businesses based on their ability to pay. [...]"
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