Despite the drama about the health care debate the country continues down its path to austerity. The only way we can get off the path is if the economy shows a robust, vigorous recovery of permanent employment and consumer spending. The states, counties, and cities desperately need more tax revenue. It is not surprising that this week Arizona’s governor signed a budget-balancing bill that cuts benefits immediately and threatens to cut even more benefits if a sale tax increase is not approved. Like most states Arizona has been trying to develop a budget to deal with the shortfall in tax revenue. It is ironic that one of the major spending cuts is a $385 million cut in the state’s Medicaid program. For many states the growth in Medicaid has become too large a burden for a weak economy. When it comes down to laying off teachers, police men, or cutting Medicaid, Medicaid is going to get cut. Many states view the Medicaid expansion as an unfunded mandate. So Congress votes to expand Medicaid coverage and Arizona cuts it.
