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Over the last two years, the private sector grew at an average annual rate of 3.2 percent, while the government shrank at an annual rate of 1.4 percent.The combined result has been economic growth of 2.3 percent. David Leonhardt, Economix NYT January % average -1/4% average

January 29, 2012, 9:20 Paul Krugman Destructive Austerity, USA Destructive Austerity, USA

National Strikes in Belgium

Efficiency of state government But voters have positive views toward their state government. They say their state government is efficient by 55% to 43%. 7 Conducted by Douglas E. Schoen, LLC for the Manhattan Institute

STATE BUDGET CRISES – WHO IS TO BLAME? 8 As you may know, many U.S. state governments are facing large budget deficits this year, meaning that their spending has exceeded the amount of revenue that they have brought in from fees and taxes. This has caused many public employee pension plans and healthcare plans to be greatly underfunded. What would you say is the main reason for these problems? Elected state officials made careless and self-serving decisions48% State governments spent too much money28% Public employees’ benefits are too high and unsustainable13% State governments did not tax enough6% A plurality (48%) blame their elected officials for their state’s budget deficit. Conducted by Douglas E. Schoen, LLC for the Manhattan Institute 8

STATE & LOCAL GOV FUNDS – CUT SOCIAL SERVICE PROGRAMS? Voters would also not be willing to have state social service programs cut so that the salaries and benefits of current public employees could be paid at current levels if states did not have the money to pay them, 51% to 36%. 9 Conducted by Douglas E. Schoen, LLC for the Manhattan Institute 9

STATE & LOCAL GOV FUNDS – RAISE TAXES BY PARTY 10 Conducted by Douglas E. Schoen, LLC for the Manhattan Institute 10

STATE BUDGET CRISES – BEST SOLUTION 11 In your opinion, what is the best way to address the problem of states not being able to afford public employee benefits? Cut government spending47% Require current public employees to contribute more towards their benefits 31% Raise taxes13% Require retired public employees to contribute more towards their benefits 1% A plurality (47%) say that cutting government spending is the best way to address the problem of states not being able to afford public employee benefits. Conducted by Douglas E. Schoen, LLC for the Manhattan Institute 11