Michigan's Upcoming Financial Crunch - Tax the People or Cut Benefits?

The Detroit News reported September 11 that lawmakers were wrestling with a 1.7 to 1.8 billion dollar deficit in Michigan's budget. The awesome ferocity of a deficit figure that large in a state this small is mind boggling to say the least. Each party is now blaming the other. The solutions that are being explored include cutting services (Republicans) and/or raising taxes (Democrats). In the meantime, it appears from news reports that "compromise" and "working together" are ideals not likely to be attained soon. If an answer isn't formulated promptly, the state could find itself shuttering its doors and curtailing many services on October 1.

Liberal bloggers are predicting a countdown to chaos, while conservatives are looking for leadership in Lansing and finding the capital city strangely quiet.

According to CNN Money.com, Michigan has the dubious distinction of leading the nation in its unemployment rate. Layoffs at the Big Three have been escalating over the years, and the recent notice of VW moving from metro Detroit hasn't helped the situation. In the meantime, other businesses have been feeling the effects of the recession through trickle down. The Michigan foreclosure rate is one of the highest in the nation, in some counties sporting an increase of over 40% from last year. Many believe the spike is due to a rash of predatory lenders who handed out beefy and easy-to-get home loans during the brief economic surge of the late 1990s.

Is it any wonder that Michigan's college graduates are leaving the state in record numbers? Who would stay here? Our best and brightest are no doubt going to where the money is.

Perhaps lawmakers should take a page out of a real person's real life. I'm not a legislator or an economist, but as a one-half of a household unit, when money is tight, I cut down on my expenses. Our family doesn't travel as much as we used to, we don't eat steak every day, I don't spend as indiscriminately as I did in the past, and the list goes on and on. However, it appears life is different if you're state worker or in state government. Look, we're sending people to a Hawaiian conference on the public dime.