Future US Economic Policy Could Hurt Coral Gables

There is a lot of talk about resolving the fiscal crisis in the US by having higher taxes (letting the Bush tax cut expire for the wealthy) and slowing the growth and reducing spending on social security, medicare and medicare.

This will hurt Coral Gables in several ways.

  • Reduced spending will hit the State of Florida’s budget and cut transfers to local government and  education spending (putting more pressure on property taxes);
  • Reduced spending will not be helpful in getting the economy back on track and this will hit consumer spending;
  • There will be less money available to carry out needed infrastructure investments locally;
  • Unemployment will continue to have bad effects since there is pressure to cut compensation for people who are unemployed for long time periods;
  • Retail sales and spending will remain sluggish;
  • It very hard to imagine that there will be a willingness to set up national disaster insurance and relief; and
  • There will be no relief in sight to help cover the costs of excessive local salaries and pensions.

This gives greater urgency to keep property taxes and fees down,  and to do something about salaries and pensions in Coral Gables and build up local reserves.

About Stephen E. McGaughey
International consultant in economic development programs and projects

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