K-12 Tax & Spending Climate: The Great Debt Bailout

"Hellasious":

This blog was created in late 2006 in order to "vent" my frustration over the huge debt bubble and what I perceived to be the risks it posed to the global economy. In summary, I claimed that the economy had become hooked on debt to create additional GDP growth - or "growth" in quotation marks - and that the finance "tail" was wagging the real economy "dog".

Soon thereafter, the bubble burst - first in the U.S. and then everywhere else. What followed was the worst economic crisis since the Great Depression. And we are still in the midst of it, albeit in ever-mutating form, so today's post is meant as a tour d'horizon, a quick summary of how I see things shaping up today.

I believe all that has happened so far is The Great Debt Bailout. Governments and central banks have issued trillions in new government-backed debt, some to replace private debt gone bad (bailouts for billionaires) and some to finance massive budget deficits (pennies for penniless). It is a policy mishmash produced by the combination of (a) Bernankean revulsion to monetary deflation and (b) Keynesian aversion to economic recession.

As School Districts consider property tax increases to address spending growth and flat or reduced redistributed state and federal tax dollars, it may well be useful to keep local goodwill in reserve for future funding challenges.

Related: Peter Gorenstein: Pray For Inflation -- It's Our Only Hope and New Jersey's K-12 Staffing growth.

Posted by Jim Zellmer at April 10, 2010 6:56 AM
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