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Over the decades many of us have wanted government to take care of us – when we are feeble, when we retire or are poor and unable to work, when our property floods, when a tornado hits, when a neighbor does something that is irritating, when aged aunt Bessie has to be institutionalized, or when we need some place to park the kiddies so we can work all day. Elected officials have been eager to accommodate by designing taxpayer funded programs and services ranging from Food Stamps to disaster assistance and code enforcement, programs to protect the vulnerable and serve the disadvantaged and, to provide child care for the working poor, and – of course – public schools for the kids.
Somehow government has found a way to pay for all that help. Government coffers have been funded by everything from the federal deficits to voter supported tax increases and the government revenue surge produced by the housing and finance driven economic bubble until it burst in 2008, starting us all on an economic downhill slide.
Most of us have seen our retirement savings and our plans for the future eroded by the 2008 bubble recession. Many have lost jobs, others of us wonder how long our current job will last. The value of our homes, if not foreclosed upon already, has declined and we are still wondering where the bottom is. We have all been hurt by this bubble recession and worry about what is just around the next economic corner. Most of us are struggling to cut our costs and are not interested in paying more for anything – including taxes.
In this environment of declining wealth and uncertainty we read daily about government at all levels lacking the income to support current levels of service and programs. We are beginning to realize that going forward the things that government has been doing for us (some would argue it is “to us”) do not seem financially sustainable. There is growing support for cutting back government to fit the funding that is available to it and to do it now – as the saying goes, to “bite the bullet”.
With growing alarm at the size of the ballooning federal deficit, it appears Congress is poised to begin doing just that. Most states, which do not have the luxury of being able to deficit spend, are faced with large deficits and a legal mandate to balance their budgets. From New York State to Florida, Wisconsin, Nevada and California, governors have submitted budgets calling for dramatic cut-backs in order to match state expenses with income.
In California Governor Brown has proposed plugging a $25 billion dollar budget gap with a combination of program and service cuts and an extension of tax increases approved by the legislature and then Governor Schwarzenegger a couple of years go. Generally speaking, half the $25 billion would be covered by cuts, and half by the tax extension.
The Republican minority in the California legislature is in the cat-bird seat. At least a few of them would have to join Democrat legislators to vote to put the tax extension issue before the voters, and for now Republican party leadership is saying no way. Once the deadline passes to schedule an election before the July 1 start of a new budget year, it will be too late to do anything but craft a budget that covers the entire $25 billion shortfall with cuts. That deadline appears to be some time in March. If the legislative votes are not there to put the tax extension on the ballot by then, the legislature and governor will have no choice but to pursue a balanced budget achieved almost totally by cost and service reductions. Of course if the voters did get the chance to vote on these tax extensions, the governor and legislature would be faced with the same budget cutting challenge if the voters rejected the extension proposal.
At that point many of the state programs and services that various of us utilize either directly or indirectly will be reduced or eliminated by the biggest state budget cutting exercise in memory. California will of necessity take a giant step toward the elimination of the welfare state. Some seem to think such reductions would be painless – perhaps invisible – to the average California citizen but $25 billion is such a big figure it is hard to fathom how that could be.
Many of us will have to learn to become a little more self-sufficient and to reduce our expectations that government will take care of the number of our needs that we are used to. This promises to be an exciting trip. Fasten your seat belt.
The only way to even approach bridging the deficit gap is to roll pack pay and benefits of public employees that have ramped out of control of the past two decades. We have been told the fairy tale that the government can “cure all ills” which has created an atmosphere in which people no longer take personal responsibility for their actions or for their future. Its about time we wake up and take care of our own business and return government to the very few tasks that it was created for.
Can someone – anyone – explain how the “welfare state” is responsible for this latest economic crises? Or the last one? Or the one before that? Did “the welfare state” cause major houses of finance to fold, or to require billions of tax dollars (not “welfare”) to remain afloat? Did the “welfare state” cause Congress and Bill Clinton to authorize the creation of financial instruments such as credit default swaps that cost taxpayers hundreds of billions of dollars? Did the “welfare state” cause Bush and friends to wage a 2 trillion dollar war, and put it on their grandkids’ credit? Did the “welfare state” cause the deregulation that allowed Enron to funnel over 14 billion dollars out of California while (literally) laughing about it? What exactly did the “welfare state” do to allow the biggest increase in wealth inequality in over 100 years in the United States?
Here is a novel idea. Where should “the people” get the money to solve this fiscal crises? Why don’t they go where the money is? Why don’t they take it back from those who stole it from them, instead of those who have none?
nice over simplification of just about everything. The welfare state mentality promoting lack of personal responsibility directly contributed to the housing crisis. The other issues you raise are nothing more than a deflection of the issues raised in the post. Typical move from the left – lose an argument and simply shift ground and talk about whatever irrelevancies you want to talk about.
What do you need me to “under-simplify” for you? What specifically did I say that is not true? What issues did I raise that are not DIRECTLY related to the current federal and/or state fiscal crises?
So, I say it again – and it is a simple question. How is the “welfare state” responsible for our current fiscal crisis?
“Our current fiscal crisis” in the context of both events in Wisconsin and California relate to measure only within state control. At the very top of the state funding list is the explosion of public employee salaries and huge unfunded pensions.
The vast majority of the points you raise are at a federal level and outside of the control of state legislatures. I can’t make it any simpler than that.
Outstanding post and response, ww. Note the opposition just parrots the usual–Government pay! That’s the cause of all evil!–and completely ignores the truth as to why we’re all getting screwed, except for the small percentage of the uber rich. There is a serious question begged as to whether there has been a “welfare state” anyway; if so, it’s been fairly parsimonious as far as helping the poor.
Sadly, with a governor and legislature unwilling to address the crushing public employee pay and benefits (the massive unfunded liability, in particular), drastically cutting the welfare programs is one of the few alternative government has to do something about our crushing budget deficit. We already have endured two years of the largest tax increase in US history, and we still have a $25 billion deficit. Maybe if people start to see programs they rely on cut to the bone, they will start paying attention to the unsustainable pay and benefits the public employees enjoy. At that point, we have a shot at real change.
Stop all program to any one that can not prove there legal status………….the over head is to much for any state… Must of the people know how to work the system. LET me give you an example Santa Ana has a big problem, must of the business in downtown are own by people that has not legal documents, there are properties owner , buss owners and they collect welfare… with two or more childrens.
This is the an answer to Aunt Betsy… why she can get her benefit.
Please do like DMV.. CHECK ALL DOCUMENTS TO START A BUSS. Buss Lic department must verify al document same as code enforcement… this is not descriminating against anybody is just a fact.
“The vast majority of the points you raise are at a federal level and outside of the control of state legislatures. I can’t make it any simpler than that.”
IF the article were only about state-level responses to fiscal crises, then my response would in fact be incongruent. However, much of the article is clearly about “about government at all levels.” Thus, my responses are hardly out of line with the focus of the article.
WW and Geoff – Here is my take, for what it is worth. If the debate is about what originated the current recession that has victimized us all, I would argue that it is a combination of several things. Those things are failed federal government oversight of financial institutions, greed on several fronts, a blind embracing by most of us of what was thoutht to be the free market economy that was driving up real estate values, and a herd mentality that prompted many of our fellow citizens to bet on future increased asset and income values vs. living within their current means. As for states, in most cases their governors and legislatures reaped the windfall tax revenues from all that “prosperity” and spent it in ways that people expected to continue – from new or expanded programs to public sector wage and benefit increases – but the party did not continue, revenues plummeted as the recession bubble burst and here we are. The retrenchment that states must now face will add another layer of dismayed, angry and victimized people to the larger pool of recession bubble victims, including public sector employees (some of whom have already experienced pay and benefit reductions, layoffs, etc – but more is coming) . We are all pretty much victims of this bubble recession, and it does seem like some of the major players who either let it happen or caused it have continued on their merry way (Bernie Madoff is an exception) while the masses are left with the impacts. We are all justified to feel that we have been let down. Not many happy campers out there.
Good points, and as an additional one, can anyone explain the teflon quality of the odious Chris Cox? He was appointed head of the SEC to do just what he was supposed to do–look the other way. Now the republicans want more restriction on SEC funding, saying it didn’t work, Of course it didn’t when it was headed by a corporate shill.
Rapscalion – While Cox was at the helm when the ship hit the rocks, and must bear a good part of the responsibility, we also need to realize this was the culmination of decades of laissez -faire attitude toward banking and wall street. There is plenty of blame to be applied to both political parties. As for Cox, I wonder what he is doing now – it would not suprise me if he is working for a law or finance firm with strong ties to Wall Street. It seems he has just disappeared from the public eye, which given the circumstances is probably wise on his part.
My larger point is that pointing the finger at “the welfare state” is a bit disingenuous in the face of a 7 trillion dollar financial swindle, a 2 trillion dollar war, Enron, the S&L Scandal, etc. Geoff, seems to think that by raising these points, I am somehow a “liberal.” Hardly. Had he read closely, he would have noted my reference to Clinton as a primary accomplice in the signing of the Financial Services Modernization Act, which repealed import parts of the Glass–Steagall Act and allowed for the massive proliferation of credit default swaps and other speculative financial instruments. In important ways as well, Jimmy Carter opened the door for the beginning of the deregulation of the financial and banking sectors with has windfall gift to banks (DIDMCA) in 1980.
So no, my argument is not a partisan one. Rather, it is a factual one. The facts do not support the argument that the “welfare state” is responsible for this economic crisis, nor the last one, nor the one before that. To be sure, pensions, entitlements and other social welfare spending becoming a major problem – but as countless studies have indicated, the primary driver of this is demographic changes (i.e. an aging population) and the fact that such a high degree of federal and state revenues are fairly locked in even before discussions about discretionary spending begin.
So, is “welfare” spending a problem? Yes. And it is likely going to get worse. For conservatives in particular, however, the “welfare state” has also been fetishized to the point that they are immune to the facts of the overall transfer of wealth away from the working and middle classes to a very small number of very rich people. The United States has the greatest inequality of wealth in its recorded history . . . . and the reason for this is not “the welfare state.”
Good discussion posters! I did not intend to blame the so-called welfare state for the current government fiscal crisis, rather to point out that as state revenues grew because of the false prosperity of the bubble economy the welfare state expanded to utilize that revenue by adding services and programs. With the bubble recession’s revenue decline, it is those same expanded programs that will now be on the chopping block. The underlying message is – better get used to reduced government services, if in need of a helping hand look on the end of your own arm. That is where I think this is going. For those who are public policy wonks, there will be a lot to watch and study as whatever happens unfolds over the next few months.
Over,
Keep up the good work – entertaining posts that avoid the name-calling traps, and simply present the facts for all to digest. You’re on a roll.