When the Sky Falls, What’s the Fix?

“The sky is falling,” exclaimed Chicken Little after something fell and hit her on the head. She ran to tell the king so he could fix it.

Something needs to thump the heads of our wannabe kings (governor candidates) to get them to tell us how they will fix Mississippi’s descending sky.

In 2005, Hurricane Katrina fell from the sky, devastated the Gulf Coast, decimated half the state, and walloped our state economy. We leaned on $24 billion in federal funds to finance our recovery.

In 2008, the Great Recession fell from Wall Street and smacked us back down. We leaned on nearly $3 billion in federal funds to finance continued recovery.

Still, unemployment hovers over 10%, state and local governments continue to slash budgets, and private sector job growth remains sluggish. Who knows how bad things might be if we hadn’t had billions of federal dollars to lean on?

We may soon know.

Just as the Katrina and stimulus funds drop off, massive federal spending cuts are about to fall on Mississippi. That’s a double whammy with Chicken Little portent.

Even before Katrina, Mississippi’s economy heavily leaned on federal spending. Nearly 38% of the state’s 2004 total budget came from federal funds versus 48% for 2011. In addition, Mississippi ranks at the top in getting federal transfer payments to individuals in the form of Social Security and SSI payments, Medicare, unemployment benefits, Veterans’ pensions and disability payments, military medical insurance, food and nutrition supplements, education and training grants, and more. Then, there are numerous military and government facilities and industries with military and government contracts. And so on.

Yes, Mississippi is addicted to federal spending like few other states. Consequently, big spending cuts will stagger our economy and our state budget.

For example, a House Republican plan eliminates the federal “Community Development Fund.” That would wipe out Mississippi’s CDBG (community development block grant) funds, our primary source of economic development funding. A similar Senate proposal would cut CDBG funds by over 60%. Either proposal will stagger job creation.

Similar proposed cuts would impact universities, law enforcement, agriculture, hospitals, transportation, military, and more.

This is not an argument against cuts. Out of control federal spending must be reined in. Rather, this is an argument Mississippi should be prepared. But, our governor candidates don’t appear to see the darkening sky or be readying plans to deal with the severe fallout that is likely to come.

Like with any addiction, withdrawal and recovery will be grueling. Unlike the Katrina and Great Recession troubles, we won’t have substantial outside help to lean on.

Look up from politics, governor candidates! What are your fixes to this potential crash? Your role won’t be to play Chicken Little.

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