Because what happens is, as the economy suffers, tax revenues go down. But unlike businesses, where at least your variable costs go down, in government your variable costs go up: unemployment insurance, workmen's compensation, health care benefits, welfare, you name it.

Summary

This quote highlights the impact of economic downturns on government finances. It explains that when the economy suffers, tax revenues decrease. Unlike businesses where costs can be adjusted, government expenses (such as unemployment insurance, workmen's compensation, healthcare benefits, and welfare) tend to increase during these times. This suggests that during economic hardships, governments face the challenge of balancing declining revenues with rising variable costs, putting further strain on their financial resources.

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