Gov. Baldacci’s recent comments about cutting state spending in order to balance the budget in the midst of a recession are very troubling. Wasn’t it John Maynard Keynes who advised against such practices, stating that it was the role of government to run a deficit in order to stave off recession?
In a shrinking economy it doesn’t make sense to further reduce spending as a tool to strengthen that economy. Maintaining a balanced budget now will not heal the wound; it will only make the wound deeper. For example, the governor has saddled the University of Maine System with a $12.5 million budget cut. Given that UMS pumps eight dollars into Maine’s economy for every dollar of state appropriation, the $12.5 million in savings will cost Maine approximately $100 million.
Unfortunately, now is the time of sacrifice. Balancing the budget will have to wait.