Slide 1What’s going on?Slide 31. Does Frank understand the "multiplier effect"?Slide 5Slide 6Slide 7What links unemployment and the state budget deficit?By Pierce, Emily, and KatieWhat’s going on?•The state's anticipated revenues have fallen well short of its anticipated expenditures over the coming year•Solution…–Balance down  reduced expenditures, indirectly or directly–Balance up  increased revenues through taxes1. Does Frank understand the "multiplier effect"?•No•Pipeline analogy•Multiplier effected weakenedHow does the typical explanation of "leakages" have to be amended to handle Frank's case?•Expanded definition•Living outside his means•Withholding money from circulation•Spending with credit2. If the state government balances down through "cutting fraud and waste", will that still lead to reduced employment?•Fraud–When information is misrepresented, concealed, or omitted for personal gain/benefit.–Ex. Gov. Spending Excess $•Waste–Unnecessary spending•Employees from gov’t waste3. Which type of expenditure is more likely to support a North Carolina job: state government or private citizen?•http://abclocal.go.com/wtvd/story?section=news/local&id=6784337•State government•Wage cuts vs. massive