December 16, 2009 10:55:00 AM
Who doesn''t like gift cards?
Most of us do. This year, gift cards will be the No. 1 gift under the tree this holiday season, according to Deloitte, a consulting firm. That''s been true for the past six Christmases.
They seem like the perfect gift, especially during these cash-strapped times. Want to buy us something? Give us a gift card, and we''ll get what we need.
Joel Waldfogel, a professor at the University of Pennsylvania, speaks about "dead-weight spending" in his book "Scroogenomics: Why You Shouldn''t Buy Presents for the Holidays."
Christmas spending, he argues, "has givers shooting in the dark about what you like ... to make matters worse, we do much of this spending with credit, going into hock using money we don''t yet have to buy things that recipients don''t really want."
This, he says, creates no wealth or happiness for the buyer or spender. A better gift, he argues, is a gift card (or better yet, a gift to charity in the recipient''s name).
Most of us living through the Great Recession don''t need dead weight right now. We need some liquidity.
That''s certainly the case with the state budget. Tuesday, the Joint Legislative Budget Committee issued its proposed budget for the coming fiscal year. Like the proposed budget issued by the governor on Nov. 16, it predicts practically no economic growth in the coming fiscal year, compared to the one we''re in.
Once you figure in the current budget shortfall, that adds up to a $310 million cut in funding, compared to what was appropriated in this year''s budget, according to the budget committee''s plan.
Cuts are everywhere. A 6 percent cut to the Mississippi Adequate Education Program, which already suffered a 5 percent cut this year. All state jobs currently vacant would be frozen, and 3,656 jobs would be "deleted."
In all, the legislative committee imposes a 10 percent, across-the-board cut to state agencies. Some agencies under Barbour''s control would see a 12-percent cut.
So while the governor and the Legislative Budget Committee are coming at it from different directions, the intent is the same -- the state is tightening its belt. Money is tight, and we can''t afford to spend.
Compare this headline with one just out of Washington. Sitting on President Obama''s desk is a whopping $1.1 trillion "omnibus spending bill that contains thousands of earmarks and double-digit increases for several Cabinet agencies," The Washington Post reported.
Talk about "going into hock using money we don''t have." Seems the Congress is the mother of all wasteful gift-givers. Add to the spending bill another $900 billion proposed for defense spending, and we''re so deep in the red that Congress will, again, have to raise the ceiling on the amount of debt it can legally carry.
I found it ironic that while the state''s Legislative Budget Committee proposes a 10-percent cut across the board for state agencies, the federal bill includes "average spending increases of 10 percent for dozens of federal agencies," according to the Post.
Mississippi''s ''big presents''
While we don''t like spending, we tend to like presents. And, $150 million of the earmarks in the federal spending bill is headed under Mississippi''s Christmas tree.
Among it, $9.8 million is tagged for a maintenance facility at Columbus Air Force Base. Mississippi State University gets $6 million for building at its Thad Cochran Research, Technology and Economic Development Park (conveniently named after the guy who sent over the money). Other universities receive millions in funding for specific programs.
The Golden Triangle Regional Airport gets $2 million to help pay for a planned runway extension and taxiway improvements, which are essential to attract new companies to the fledgling Aerospace Industrial Park.
(Also included are funds to improve airports in Jackson, Greenville and Biloxi -- reminding me of how, if one of my brothers got a pair of socks, the other two could expect the same thing.)
Those are the "big presents," as we call them at Christmastime.
There''s also lots of small stuff -- the little presents that get lost among the wads of wrapping paper. These are the ones Pennsylvania''s Waldfogel might call "dead-weight gifts."
"The bill has funding for several Mississippi cultural projects, including $700,000 to help pay for the first phase of a Walter Anderson Arts Pavilion in Jackson County," The Associated Press reported. OK, that''s fine, I guess. Doubtful I''ll ever lay eyes on it, but fine.
The federal government also gifts "$500,000 for the Burns Belfry Community Heritage Center in Oxford," AP says. This is a restored church in one of the state''s wealthiest small towns. Our tax dollars will also fund $500,000 "to help pay for the 41-mile Hattiesburg Longleaf Trace Rails to Trails project, $300,000 for the Mississippi Children''s Museum being built in Jackson and $195,000 for an Emmett Till Memorial Complex and Trail in Tallahatchie County."
Those state employees whose jobs are "deleted" under the state plan, will at least have more free time to enjoy the walking trails under the federal one.
Yes, all these things will spur economic development and jobs, at least in the short term. But it''s hard to celebrate the largesse the federal government is going into debt to provide us, while we''re gutting schools and cutting other programs at the state level.
We may have some shiny new toys, but we''re playing with them while our house is crumbling around us. All things being equal, I''d rather take that gift card.
Steve Mullen is Managing Editor of The Dispatch.