Local Commentaries
10:42 am
Wed September 23, 2009

Bill Knight - September 24

Macomb, IL – Without a second government stimulus, states such as Illinois face cutbacks in libraries and schools, community colleges and parks, agency office hours and services.

And there's no political reason not to use the power conferred by voters who elected Democrats to their offices.

The Obama administration's first stimulus of some $780 billion is working, some, as the drop in economic growth slowed to just 1% in the second quarter, compared to a decline of more than 6% in the first quarter, and rising prices have been minimized
However, state - and local - governments still need help.

And joblessness continues to make this Great Recession dangerously close to a Depression, Great or not.

Illinois and most states require balanced budgets in their constitutions, so in such economic upheavals, their choices are to raise more money, spend less, or both. The General Assembly doesn't seem to have the political backbone to do what's necessary on the revenue side - arguably, lawmakers put their political futures ahead of the state's fiscal health, or defer to ideology and ambition instead of forethought and reason. So the impulse in Springfield is to hack programs, lay off workers, toy with budgets and otherwise tinker around the edges of the crisis.

The country needs another stimulus, and one idea is to draw on Republican Richard Nixon for a model. (Hope that didn't force you to do a hot-coffee spit-take.) In the 1970s, Nixon proposed general revenue sharing as emergency assistance to states.

Sure, the Consumer Price Index shows that prices for many goods and services have dropped more in the last year than in some six decades - more than 2% overall. But that's somewhat of an illusion, too. The good news is that prices for utility (piped) gas in Illinois have dropped 54% in the last year, and gasoline has similarly fallen 37%.

However, that's as much to do with the ridiculously high prices of a year ago as with consumer austerity or common sense since then. Further, prices for electricity are up 3.3% in the Midwest overall in the last 12 months, and medical care in Illinois is up 7.7% -- both easily outpacing the slow rise in wages.

Unemployment data also is a mixed bag. The jobless rate in July fell in 17 states, and 21 states added jobs, but the District of Columbia and 15 states - including Illinois - have unemployment rates higher than 10%.

Illinois' went up, in fact, from 10.3% in June to 10.4% in July.

Twenty-six states had higher jobless rates in July than June.

Already, dozens of states are trying to slash funding for child care and education, from elementary and secondary to higher education. Also, 21 states have cut low-income health insurance or otherwise cut access to health care, according to the Center on Budget and Policy Priorities. And 1.5 million U.S. workers are about to lose their unemployment benefits.

Americans and Illinoisans must resist the temptation to think the Great Recession is over, the consequences dwindling. Actually, if there's not another federal stimulus package, the modest improvements that have been assisted thus far will vanish like summer with this week's equinox.

There are Democratic majorities in Washington and Springfield. They should use their position to serve their constituents, whether it's genuine health-care reform, the Employee Free Choice Act, or a second stimulus package. Energy and effort are wasted trying to accommodate opponents maneuvering for political gain at the expense of the nation.

The future is at stake. The time is now.