"Wisconsin's $3.6 billion shortfall represents 13 percent of state revenues, well below the average shortfall among all the states of 20 percent," as the Center on Budget & Policy Priorities reported. Hardly a crisis. Plus, tax revenue has actually increased 11.4% from July 2009 to September 2010. Putting the recently-available investment dollars to work could have added to this momentum, created demand, and increased purchasing power. This is what a recovery would look like. Instead we see an ideological zealot, Scott Walker, manufacturing a crisis to ram through a discredited partisan platform, which in no way qualifies as good public policy or good governance.
The New York Times has editorialized about Walker's hollow cry of broke. "Scare tactics[s] employed for political ends. A country with a deficit is not necessarily any more broke than a family with a mortgage or a college loan...Much [budget shortfall] is because the recession has driven down tax revenues." Even PolitiFact can see the whole "we're broke" canard for what it truly is.
As Andrew Reschovsky explains, "The benefit reduction in the so-called budget repair bill saves only $30 million. Additional revenue could be raised by eliminating any of a large number of exemptions, deductions, or exclusions from the Wisconsin tax system. Fees, underused in Wisconsin, could be raised. Wisconsin's budget woes are considerably less severe than those of many other states. As the best public sector workers leave, the result will be lower quality public services. In the long run, unless Wisconsin can retain a high-quality public sector labor force, the state's ability to compete in the global economy will be jeopardized."
Kelly Nolan reveals a few more details, "While Wisconsin does face a $3.6 billion deficit in its spending cycle over the next two years, that is equivalent to about 0.75% of its economic output over than time...Wisconsin's $1.8 billion deficits for fiscal 2012 is just 12.8% of its current fiscal year budget." For comparison, Illinois' deficit for 2012 is 45% of its current fiscal year budget. California's is almost 30%.
Mark Zandi's latest research warns that such cuts and austerity - as being proposed by Republicans on the federal, state and local levels - will derail the recovery. Proposals would reduce 2011 GDP growth by 0.5 and 2012 by 0.2 percentage points. This equates to 400,000 fewer jobs in 2011 and 700,000 less in 2012. Alec Phillips, economic forecaster for Goldmann Sachs, thinks the GOP plan will slow economic growth by 2%. Even the bankers know this strategy of cutting off our nose to spite our face is counterproductive.
These are policy choices. These are the reasons - fairness, social justice, equality of opportunity - we elect people to legislate on our behalf. That's what public service is supposed to be - service in the interest of the majority. Jon Perr found some explanatory data which elaborates the disconnect between opinion and actual economic interest, "The Census Bureau's 2011 Statistical Abstract shows per capita income and median household income is worst where GOP's laissez-faire crowd finds its strongest support." The Republicans have a lot of people fooled about whose side they're really on. As union numbers have declined this Republican manipulation has been increasingly effective.
Joe Conason reminds us of some of the rights we can thank unions for,"Law's provisions prohibiting child labor and mandating minimum wages, safe working conditions, overtime pay." He continues with some thoughts on the conservative worldview, "Their core belief is that the state should never interfere with capital...Their ultimate project is to return this country to the absolute dominion of the wealthy that existed before the rise of the Progressive Movement and the New Deal." Conason next outlines the connection between unions and quality of life, "The United States enjoyed a far better distribution of income and a steady improvement of our productivity and power when the labor movement was strong...As labor's power diminished, income and wealth skewed upward."
Sima Gandhi has a helpful list of corporate giveaways we could end and thus bring billions back into government's coffers to be put to more productive use and broadly-based benefit. Farm, oil & gas, timber, luxury items, and capital assets, to name a few. Again, there is plenty of money out there. Plenty of money for Medicaid, for Social Security, for pensions, and for living wages. We just need to redistribute it from the Haves to the Have-Nots. This involves getting money out of politics and unions having a bigger seat at the policy-making table.
Union decline mirrors corporate tax revenue as a share of GDP. (Corporate tax revenue has fallen from 6% in the early 1950s to just over 1% today.) The government has collected less and less in taxes from corporations over the years, and this has occurred alongside an eerily similar decline in unionization. As labor has gotten weaker, corporations have filled the political gap and used that power to avoid paying their fair share. Of 19 countries, the average corporate tax rate of the U.S. ranked 15th. The continual drum-beating for more corporate tax cuts as some sort of panacea is at odds with reality. The neutered revenue-generating ability of the corporate tax, and its already comparatively low burden, make the pleas of the right-wing for more cuts, as the solution to our problems, a blatantly selfish slap to our collective face. Even more so when they're doing this while also telling working Americans they have to pay more and get by with less.
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