What does the tea-party acronym stand for again? Taxed Enough Already, as some of you recall. That’s the credo for our age, whether or not there’s any truth to the sentiment. If people are paying higher taxes, they’re doing so on the local level; as county and municipal governments try to grapple with austerity policies from above, they resort to whatever means of revenue generation that may be available to them. Federal austerity starves state coffers; that in turn negatively impacts localities. Combine that with the fact that we are in the midst of a depression of sorts – i.e. a period when people need greater assistance from the government, not less – and that causes upward pressure on local taxes.
When that happens, people inevitably look for someone to blame. Lately that someone has been unionized public employees. Sad to say, my fellow Americans are all too quick to think the worst of them. That’s not surprising. A lot of editorial ink, political rhetoric, and advertising resources have been placed against vilifying the very notion of working for government. It’s a waste of money, they’re a bunch of lazy layabouts who can’t make it in the private sector, etc., etc. For a long time that blanket criticism seemed confined to, say, the people down at the DMV, but in recent years it’s been expanded to teachers and even public safety employees.
Here’s what the critics – at least, the non-cynical critics – don’t appear to understand: When you lay off public workers, you create more problems than you solve. For one thing, you make whatever institution they worked for less effective; that means less value to the taxpayers. For another, those individuals are now out in the public sector workforce, competing for the same jobs that everyone else is trying to get. Thirdly, their lost income results in less consumer spending (yes, public workers buy groceries, clothes, and gasoline just like the rest of us), which means lower consumption tax revenues, which means – yep – budget gaps of the type we’re grappling with now.
What’s needed, as Jim Galbraith, Paul Krugman, and others have pointed out, is federal stimulus – aid to state and local governments so that they can stop shedding jobs and adding to the ranks of the unemployed, infrastructure spending that will build out the economy and create jobs at the same time, and other public investments.
Perhaps if the GOP could take a break from passing radical anti-abortion legislation for about five minutes, perhaps they’d consider doing something about this depression. Just saying.
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John Dewey had it about right when he said that politics is the shadow cast on society by big business. I suppose in his day it wasn’t very different – the wealthy have always pressed their advantage. Perhaps the period from World War II through the 1970s will be seen as unique in American history in the sense that workers had some influence on the economic life of the nation. There was a social contract between the rich and the not-rich that provided the latter with a modest share of the wealth they themselves were creating through their labor. That model has been under attack for decades now, and it is crumbling.
This is where the faulty economic theory part comes in. Take pretty much any one of the Republican candidates’ tax plans, to the extent that they’ve been articulated thus far. Romney, for instance, is touting a 20% across-the-board tax cut. What he’s actually talking about is raising taxes on the bottom third of wage earners, which the G.O.P. field has for several months been describing as woefully undertaxed. Meanwhile, at the top end, the richest of the rich (i.e. the parents of kids too rich to want to hang around with Richy Rich), folks will be seeing an extra $400K or so in their yearly income. All well and good, right? These are the “job creators”, right? The folks who fired your ass so they could afford a second Bentley. They were the ones paying too much, as George W. Bush lamented back in 2000 (which he later fixed with his massive tax cuts).