Far more important than what a $405 million shortfall means for the state budget is the painful reality that it indicates for the budgets of Maryland families and small businesses.
Six years removed from the economic collapse, and far too many families and small businesses are still waiting for the recovery they keep hearing about.
We can classify a year or two outside the ordinary as simply abnormal. But more than a half decade later, we need to accept that sluggish growth and challenging economic conditions have become our new normal.
Yet, another year has passed, and ordinary families and small businesses haven’t even recovered to where they were before the financial collapse, much less made up for the wages they’ve lost over the past six years. We need to recognize that hope is not an economic strategy.
Wages and salaries are essentially stagnant. Local, independent businesses are struggling to meet payroll, cover their costs and turn a profit. Working families have cut back their spending because they just don’t have the money, they’re scared of losing their jobs, or, in many cases, both.
The housing market has failed to rebound in a sustained and meaningful way, particularly with Maryland second worst in the nation in home foreclosure rates
Combined, these economic indicators led to a Maryland economy that didn’t grow at all last year – with a 0 percent GDP growth for 2013. As we know, an economy that isn’t growing is actually retracting. This all means uncertainty for families and businesses. They are unsure about their prospects and, as a result, unwilling to make the purchases and investments our consumer-driven economy needs to grow.
We simply can’t assume that we’re around the corner from returning to the way it was, and back to the decisions we could afford to make in Maryland as a result. The fact remains that we’ll only see the economic growth we’re accustomed to when we get the private sector economy growing. We can only make that happen if we provide a sense of predictability for Maryland families and small businesses.