Friday, October 24, 2008

even the economy has mood swings

 when referring to state government issues, business cycle refers to the ups and downs of economic activity. There are shifts between periods of rapid growth of output and then periods of stagnation or decline (recession). what makes the job difficult for the budget office to create an effective state budget is that the business cycle is not easy to predict in terms of patterns. i have realized that writing budgets at this level requires a creative mind capable of great guessing.  “Rainy-day funds” are sometimes established for use during a recession to boost the economy. However, most legislatures do not see why the governor does not use the extra funds to fix immediate problems with the budget or programs. The budget really needs reserves so it does not suffer too much stress when the business cycle turns down. i actually think this is rather worth knowing. not worth participating in, but one must spend copious amounts of time studying what they distain if they wish to destroy it, someday. 

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