Bangor Daily News, Aug. 20
To get a sense of the struggle states have to balance their budgets and stimulate the economy, consider the holes in their budgets. States are expected to cut spending this year another $45 billion to $50 billion, roughly the amount of the president’s tax cut bill this year dedicated to economic stimulus, bringing their three-year budget cuts to $186 billion. Some of the need for these cuts can be attributed to money lost in the declining stock market, but much of it – and most, long term – comes from federal tax cuts that many states are expected to match.

The debate in Washington is whether this is a good thing: Do shrinking taxes eventually produce a bigger base from which to tax, lightening the load for all even as it supplies sufficient funds to carry out government or does it just leave permanent shortfalls? The Congressional Budget Office this year found very little to suggest the kinds of cuts passed by Congress would ever pay for themselves. That, however, is the Washington-level debate; it has theories to explain all sorts of fiscal policy. But the public doesn’t want a theory of health insurance or a theory of road building. It wants the insurance and the roads, and that’s where state and local governments come in. …

Though Washington commonly accepts the idea that states brought on this problem themselves through profligate spending, the Center for Budget and Policy Priorities reports that states in the 1990s increased spending at a much slower pace than they had in the previous decade. Tax cuts were in vogue at the state level starting in about 1997, a fashion many states are reversing now to keep essential programs going.

Everyone wants firefighters to be paid and safe bridges and excellent schools and children protected. Congress and the administration can say these things even while passing more tax cuts, but state and local governments cannot. President Bush last week concluded that he had cut taxes enough to jolt the economy into moving again and that further cuts may not be necessary.

Trickle-down theories aside, the relief from tax relief would have been welcome in state capitols.


Military pay matters


The Mississippi Press, Pascagoula, Aug. 17
For an administration that claims to support our soldiers overseas, the past few days won’t score well on the credibility index.

First, the Pentagon wanted to roll back “imminent danger pay” by $75 a month and “family separation allowances” by $150 a month, a slap in the face to the 157,000 troops in Iraq and Afghanistan. …

By Thursday, in an attempt to cool the firestorm, the administration backed away from the proposal. Now, the White House says it wants to extend the provisions, currently set to expire Sept. 30. …

House and Senate measures awaiting Congress after the recess would do just that.

The Senate bill, which would make the combat pay hikes permanent, should be passed, quickly, when Congress reconvenes. …

But even considering a betrayal of our military like the combat pay rollback should send shivers down the back of the most ardent administration supporter.


Penalties are too severe


The Stuart (Fla.) News, Aug. 18
One of the almost forgotten sidelights of the Iraq war was the “human shields.”

Some 300 of these self-styled peace activists, about 20 of them Americans, journeyed to Iraq before the war with the intention of placing themselves in schools and hospitals to discourage air strikes.

Most of them left before the bombing, many of them disillusioned by the Saddam regime’s use of them for propaganda purposes and its suggestion that they might more usefully be placed around military targets. Those shields that stayed survived the war, unwitting testimony to the precision of the allies’ attack.

Now, those Americans who went to Iraq are receiving letters from the U.S. Treasury noting that they face up to 12 years in prison and fines of up to $275,000 for violating U.S. sanctions against Iraq. …

The human shields and the few dollars they brought with them were of no material benefit to the Iraqis, did not affect the outcome of the war, and engendered more ridicule than emulation. These are not John Walker Lindhs. …


Resort to innovation


China Daily, Beijing, Aug. 18
World economic restructuring has meant that many countries play changing roles in production. But now, with some U.S. manufacturers claiming bankruptcy and dismissing employees, many Americans are blaming China for the crunch their country is feeling.

However, the charge is unfounded, and what is happening in the United States is simply a part of the larger restructuring phenomenon. …

The world’s labor-intensive industries naturally migrate to locations where abundant labor is available, and low wages are a major factor in cutting production costs. …

China has become a part of the global production chain, whether others like it or not. …

Americans railing at mass layoffs may forget they are enjoying the comfortable prices and good quality of China-made products themselves. …

The cure for the problems of U.S. industry is not to erect trade barriers, but to resort to innovation to enhance its competitiveness. …

China and the United States have common interests. Their roles are decided by their different economic endowments. …

Ignorance of that difference and unfair charges can do nothing but hurt normal trade relations between the two sides.