Sunday, April 10, 2011

Wisconsin Class Warfare

Scott Walker's budget recommends a nearly 29 percent reduction in spending. Yet, for his priorities, he wants the state to borrow $75 million to combine the museums of state history and veterans into one 200,000 square foot building. Walker also wants almost $119 million to replace the Department of Transportation's headquarters.

Another Walker administration aim is ending cost-benefit analysis of outsourcing public work. The free marketeers already know that the private sector does everything better. There is no need to do such an analysis when it is already known that the private sector will do it more cheaply. (Actual Legislative Audit Bureau analysis regarding outsourcing highway projects has found the majority of work would have been cheaper had it been completed by public workers. Facts be damned in the Republican world!)

Much of Walker's anti-union rhetoric has been used to fuel a privatization push of public services. The classic Republican implication of private being good, public being bad. And, for Republicans, unions, specifically, are always bad. Yet, as Richard Florida discovered, "Unionized states are better off economically than non-unionized states. They are correlated with higher incomes across the board. Unions are associated with the country's economic winners, not its losers. The basic facts that unions are positively associated with so many key measures of prosperity suggests that their existence has little to do with state budget problems."

Walker would also like to cut funding for local roads by 10 percent, end the residency requirement, end recycling, slash the earned income tax credit, and eliminate the cap on voucher schools. These are just a few of the atrocities in a completely terrible budget.

Walker is also, now, seeking $150 million for a Hiawatha rail upgrade. After turning down over $800 million for rail upgrades and improved lines earlier this year, Walker now wants some of that money back to do some of the things it was initially offered to Wisconsin to accomplish.

The Legislative Fiscal Bureau has found Walker's budget would increase spending by 1% over two years. For all the talk of reductions in spending, it appears the Walker budget merely shuffles spending around, taking from programs for the poor and working-class, and giving tax breaks and handouts to Walker's political cronies. As citizens we should understand this, Republicans pay back their biggest campaign contributors - business.

The Institute for Wisconsin's Future has some facts that contextualize the current policy debate about our fiscal "crisis", taxes and spending, and budgets.
  • State and local spending is 25th out of the 50 states.
  • In 2009, we spent below the U.S. average per capita on public health, police, parks, and public welfare.
  • The state budget deficits is only 12.8% of one year's spending - median among the 50 states.
  • Current state taxes are at a 25-year low as a percent of state income.
  • Corporate income taxes are 12% below the national average.
  • Middle-income families pay twice as much of their income for property taxes as the wealthiest 1%.
  • Every $1 invested in public infrastructure generates $1.38 in growth.
Ezra Klein gets to the heart of Republican policy-making, "I'm not saying Republicans don't care about poor people. But so far, their policy proposals don't. And you can't chalk it up to an appetite for sacrifice, because for all that the GOP is asking from the poor, they've fought hard to protect the rich from having to make any sacrifices. So far, it's been program cuts for the poor and tax cuts for the rich. It's a disappointing set of priorities."

How do these conservative priorities play out across the country? The 10 states with the lowest median household income are red states. The states with the worst health care systems are red states. The highest divorce rates - red states. The highest teen pregnancy - red states. The fewest college graduates - red states.

As Uwe Reinhardt explains, "Americans have granted themselves a series of generous tax cuts, all the while driving up government spending. Unable to finance the resulting federal deficits fully from domestic savings, borrowing from foreigners was used to fill the gap."

"At just 15% of gross domestic product, the total U.S. tax bill is now at its lowest level since 1950," informs Perrspectives. Jon Perr also writes of a Bureau of Economic Analysis study, "Federal, state, and local taxes consumed 9.2% of all personal income in 2009, the lowest rate since 1950. That rate is far below the historic average of 12% for the last half-century."

Our taxes are historically low, yet everyday workers are feeling the pinch and either going into debt to keep up or going without, while much of our taxation appears to benefit only the top 1 percent.

In an excellent article, Tony Pugh details the failure of incessant tax-cutting, "States cut taxes in hopes of spurring economic growth, but in state after state, it hasn't worked. State corporate income taxes have fallen as well. Once nearly 10 percent of all state tax revenue in the late '70s, they accounted for only 5.4 percent in 2010." In the same article, economist Timothy Bartik notes, "If state and local taxes were at the same percentage of state personal income as they were 40 years ago, you wouldn't have all these budgetary problems."

The Economic Policy Institute has found that, "U.S. productivity grew by 62.5% from 1989 to 2010, far more than real hourly wages for both private-sector and state/local government workers, which grew 12% in the same period." We're working harder and longer hours, producing more, but our wages are not keeping up with our productivity. The Economist chronicles, "Between 1947 and 1973, the typical American family's income roughly doubled in real terms. Between 1973 and 2007, however, it grew by only 22%, and this thanks to the rise of two-worker households." This country is increasingly becoming, as Joseph Stiglitz describes, Of the 1%, by the 1%, for the 1%.

Bill Maher summed up our class warfare in his final New Rules segment. Basically begging Americans to wake up and realize the inequity we are allowing by voting for Republicans and their unfair policies. The country is not broke. We, working Americans, are simply punishing ourselves by cutting the government and allowing the rich to take more and more.

Scott Walker's budget continues this Republican-led initiative of enriching a select few at the expense of many.

1 comment:

Anonymous said...

Very nice (and alarmingly scholarly) post.
I noticed that Maher briefly mentions the real reason that ppl vote "against their own interests" when he jokes about the "poor" (or Sheen-fans) not being lifted up or getting wealthy if they drink the Kool-aid or Tiger Blood. A really sad and ingrained mind-set that Democrats don't seem to address at all when they DO make an emotional appeal to "the unwashed masses".

Then finally- I notice you quote Spock, which of course you would, since it is logical.

Spock of course was trying to say "the needs of the many outweigh the needs of the few, or the one PERCENT", but of course he was dying, and by that point he could only wheeze.