Wednesday, February 23, 2011

Why Budget Cuts Don't Bring Prosperity

The Democratic Strategist: New York Times economic columnist David Leonhardt wrote a piece yesterday that every Democratic activist and elected official should read and then try to put into as plain a form of English as possible.
Its title is plain enough: "Why Budget Cuts Don't Bring Prosperity." And its content wouldn't have seemed that striking until very recently, when one of America's two major political parties suddenly embraced the belief that government spending had somehow caused a private-sector housing and financial crisis and then a demand-side recession, and that radical cuts in government spending would put the economy on the right track via "business confidence" or some such magical term.

The simplest term for this delusion is probably Hooverism, since many Americans are aware, however dimly, that the Great Depression was significantly worsened by the policies of a president who was ideologically opposed to any major stimulation of the economy by the public sector.

Read the full story at the The Democratic Strategist.
Starving the government beast [see Forbes] in Texas Governor Perry and the Republican-controlled Texas legislature propose to cut up to $31 billion more from the next state budget, without using any money from the $9 billion rainy day fund, to cut government spending by firing tens of thousands of teachers, closing K-12 schools, closing of community colleges, eliminating tuition support for 60,000 college students, closing correctional facilities and drastic reducing state services for the poor, elderly, and young and for those with mental health problems.

Texas Republicans would rather put our children's future at risk than ask corporations to pay their fair share to help build the well educated workforce Texas businesses need to prosper in the future.

Off the Kuff:
Giving Texas Corporations Taxpayer Money: Apparently, the idea is that the [Corporate Welfare] slush funds Gov. Perry controls are good for job growth. How you can believe that while pushing budgets that would result in the firing of 100,000 teachers, among other things, is a special talent on loan to our Governor. Here’s more about this, with Sen. John Whitmire playing the “you’ve gotta be kidding me” role.

More Enterprise Fund failures - Gov. Rick Perry’s office has rewritten contracts for companies that are struggling to create the promised number of jobs after getting millions of taxpayer dollars from the Texas Enterprise Fund
Texas Observer: For many Texas legislators and conservative activists, the budget crisis is a thing of wonder—a once-in-a-generation chance to drown government in the bathtub, to use anti-tax crusader Grover Norquist’s infamous phrase.
As Lt. Gov. David Dewhurst succinctly put it in his inaugural speech: “We pronounce the word ‘C-R-I-S-I-S’ as ‘opportunity.’”

The state is short $27 billion, more than one-quarter of the state’s $100 billion discretionary budget. About 91 percent is consumed by public schools, higher education, and health and human services. Texas already spends less per capita than almost any other state, but even more “devastating” cuts are all but certain.

In case anybody’s looking for a culprit, Gov. Rick Perry said Texas’ deficit was “reflective of the national recession’s lingering impact on state revenue.” In fact, the recession has little to do with the $27 billion shortfall.

Back in 2006 the Legislature concocted a Rube Goldberg-style [school funding and business tax reform] measure that simultaneously cut property taxes, imposed a new “margins” tax on business and rejiggered the way public schools are financed. Wowee zowee—three birds with only one stone!
Problem was, as the state Legislative Budget Board pointed out at the time, the plan’s math didn’t wash because the margins tax wouldn’t bring in as much as the Legislature thought. In fact, the board said, it would leave a $5 billion hole in the state budget every year.

The upshot: Perry, who pushed the swap, knew full well he was helping to create today’s “crisis.”
The budget shortfall is not the cause of the pain. It’s the justification. For 30 years, anti-government forces have been in the ascendancy with a platform of free markets, deregulation, privatization, the evisceration of social programs and the systematic debasement of the greater good.

In Texas, where Republicans control more than two-thirds of the state House and a little less than two-thirds of the state Senate, this ideology now has its moment in the sun.

“The bottom line is there are no excuses now,” Republican Sen. Dan Patrick of Houston, the right-wing radio talk-show host and founder of the Tea Party Caucus, told the Associated Press in January. “It’s a perfect storm, in a positive way, for conservatism.”
John Heleman, chief revenue estimator for Comptroller Susan Combs, in testimony before state senators in early February 2011 said Texas' budget problems will not go away when legislators eventually sign a balanced budget later this year. The school funding and business tax reform legislation passed in 2006 generates at least a $10 billion budget short fall every year. [Texas' Finances Not As Rosy As They Seemed and Budgeting with smoke and mirrors]

That means Texas parents should expect even deeper cuts to K-12 and college education spending when the next Texas legislative session convenes two years from now in 2013. Soon the conservative dream to fully privatize public education will be a reality.

As conservatives continue their ideological push to privatize all government services they will soon cut government funding for public eduction so deeply that parents will be forced to send their children to private for profit schools.

Soon, education and the better live it brings will be within the reach of only the wealthiest children. Is that really the American Dream we want?

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