Money, money, money... It always seems to be at the center of controversy. Listening to the debate about the deficit, taxes, jobs, and the budget, one can almost picture a family arguing around the dinner table. Mom thinks Dad should earn more, or get a second job (increase taxes), Dad thinks Mom should learn to get by with less (cut spending), and the kids want more allowance, while the credit cards get maxed out every month.

In this analogy, the states are the kids. Every state has some method for raising revenue to perform the essential functions of government, and different states do it in different ways. Some via income taxes, some via sales taxes, some via tourist dollars, or some combination thereof. They also get money from the Federal government. The recession hit the states hard, with less dollars coming both locally and federally. Unlike the Federal government, some states are not allowed to run up deficits and debt. Therefore, they are scrambling to make up the shortfall.

The most visible result of this currently is occurring in Wisconsin. There, the state is cutting education, laying off teachers, and - for some "odd" reason - trying to bust the teacher's union:

Where should cuts come? Is education really the best place to cut? That seems to be the target in New York City, where "New York City Mayor Michael Bloomberg on Thursday unveiled a $65.6 billion budget plan for fiscal year 2012 that calls for firing 4,666 teachers". Michigan is looking at cutting education, and California is cutting funds for state colleges. Colorado will be losing teachers, reducing funding for state colleges, and closing state parks as well.

It's not all bad news. For Indiana, it's bad news for some rural and urban schools where cuts will occur, but overall state spending will remain flat. North Carolina is proposing budget cuts, but is planning on ensuring no teachers' jobs are lost. For NC, the pain will roll downhill to the counties.

So who else will be hurting from these cuts? Here in Virginia, the disabled will be without help. And perhaps most shocking of all, Massachusetts may not have the funds to hold presidential primaries in 2012. When the very fabric, the root core of our democracy is threatened by financial crisis, then something MUST be done.

Texas is looking at gambling to bring in additional dollars. Is preying on the weakness and desperation of the poor really the best way to do it? Connecticut's governor is doing the politically incorrect thing - raising taxes. Naturally, that is wildly unpopular, but is it really worse than losing teachers and cutting medical services to the most needy? At some point, don't we need to be grownups and say, "ok - I can toss in just a little bit more with everyone else, so we can have good schools, plowed streets, and a weekend in the state park"?

There is one other little wrinkle in this. In the original analogy, the kids were the states and got their allowance from the Fed. The reality, though, is that the Fed gets all of its funds from the states, keeps most for itself, and then returns some back to the states. However, not all states give and get in equal proportion. Take a look at these graphics. At the "most screwed state" end of the spectrum is New Jersey, which gets back 61 cents for every tax dollar sent to DC. At the "welfare state" end of the spectrum is New Mexico which gets back $2.03 for every tax dollar sent to DC. It's understood that in most cases, this is to help those poor states to prevent them from sliding into complete poverty, and ensure they can keep the water running and the school doors open.

But consider this - look at the states having budgetary problems, and look at which states get the most federal funding per tax dollar. Also consider which states are "red states", electing Republicans who are consistently trying to reduce the flow of tax dollars to the federal government. Perhaps if they weren't receiving such a lopsided return, it wouldn't seem so hypocritical.

The solution to this budget mess means - yes - cutting spending. But it also means increasing revenue. No one likes to raise taxes. But this country was quite prosperous and creating jobs when tax rates were higher than they are now. Higher taxes will not mean fewer jobs. Teachers and state and federal workers spend money too, money that is used to buy products and services that are provided by other private sector workers, and thus - jobs.

Money only works when it is in motion.