Monday, October 18, 2010

Restoring Colorado's Economy: Interview Blog

Despite reports of economic recovery, Colorado remains in a precarious state that citizen’s fear could be worsened by proposed tax cuts. Unemployment is at 8.2 percent, enrollment in Medicaid and the Children’s Basic Health Program has grown 35.2 percent, and the number of individuals receiving food stamps has steadily grown to over 400,000. Not surprisingly, such staggering statistics have many people blaming local and national government figures for misappropriating the billions of dollars Colorado has received under The American Recovery and Investment Act.

Just take a look around town. The “hope” and “change” mantras of 2008 have been replaced with a plethora of negative advertisements critiquing local and national figures. For instance, the Who Said You Said campaign sponsored by the Colorado non-profit Citizen Media, have set up 100 billboards throughout the state that read “Stop Payment” next to images of Hickenlooper, Obama, Bennet, Markey, Perlmutter, and Salazar. However, Carol Hedges, the director of the Colorado Fiscal Policy Institute, assures reckless outflow is not the case.

“I think the economic problems we are experiencing have very little to do with government spending” she said. “Fundamentally, we are in the middle of permanent economic restructuring…the stimulus was a tool to try to offset the effects of the private sector adjustments but too many people mistakenly concluded it was a solution to the problem.”

As a result of this erroneous mindset, some citizens are more likely to embrace the proposed tax cuts out of fear. “People are afraid and feel like their own economic situations are very fragile,” said Hedges. “Their sense of connection to the broader public good is overwhelmed by their own economic conditions.”

Yet their own economic conditions are exactly what citizens should be focused on. It is a well known fact that the abuse of credit in the form of mortgages, and consumer spending greatly contributed to the economic meltdown. But even with this knowledge families are having a hard time adjusting because, as Hedges said, “credit may seem like the way to pay ongoing bills,” in the face of unemployment.

Therefore, one of the solutions seems to be finding a balance between spending and saving. “I think greater saving by households can help with future downturns,” said Hedges, “but not spending will have an effect on the current economy” such as slowing its recovery.

Other solutions include investing in renewable energy, emerging technologies, digital media, and education. Denver is one of the most highly-educated cities in the nation with 35.7 percent of adults having a bachelor’s degree or higher. College diplomas equal higher earnings, which expands the middle class, raises tax revenue for the federal government, and potentially lowers the overall tax burden.
Clearly, improving the economy is going to take time despite the urgency political candidates and citizens are feeling. The Great Recession unmasked numerous long-standing defects in local and national governments, which America as a whole is struggling to cope with. Like Hedges emphasized, “There are no easy answers to the questions about the future.” But regardless of its shaky foundation, Colorado should not give up.

1 comment:

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