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"A Goal Without a Plan Is Just a Wish"
-Antoine de Saint-Exupery

   

Spending Within Their Means?

 I find it fascinating to watch the Illinois budget fiasco being played out like a game of chicken between the Governor and the Senate. The Senate just overrode the Governor's veto of a tax increase. While this is good to stave off a downgrade to junk status, it is not so good for the citizens of the state. While yes, more money is available to pay for services, there is also less money that people can spend on what they need.

Already Illinois has to pay twice as much to borrow money as a more highly rated state. How is it that politicians continually vote to ignore budget problems? Instead of acting like a fiduciary in the best interests of the people they represent, they decide to spend money now for votes and figure out how to pay for it after they've left office. This is a terrible way to represent people.

The history of municipal finance is full of examples where continued borrowing at increasing rates leads to economic decline and stagnation. Government has to learn to behave like responsible families. They need to live within their means. If you have so much money coming in, then that's all they can spend. When times are tight they need to cut spending or go out and get more income. Unfortunately, with government when they get more income, it means higher taxes and eventually higher taxes drive out taxpayers.

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