You say austerity, I say prosperity

Reactions to New Jersey governor, Chris Christie’s cuts and privatizations are mixed depending on where you fall on the ideological spectrum. But one thing that irks me is the reaction that all these spending cuts “hurt” the poor, while not ratcheting up already high taxes on the rich somehow doesn’t hurt them enough.

I think we blur the conversation enormously when we talk about those from the lower income "suffering" because of spending cuts while not making the rich "suffer" enough through higher taxes, as though state spending is the only determining factor of society’s suffering. What about lost jobs because of increasingly high taxes needed to pay for enormous public pensions? What about lost investment in the private sphere due to ever bloated tax rates to line the pockets of teachers unions and other public workers?  Spending cuts do not equal "suffering" anymore than higher taxation means that someone benefits. This may be the language we use to talk about all of this, but I think it’s a huge illusion.

"Austerity" is the wrong word altogether to describe what we do when we stop spending endless sums of other peoples’ money.

There are legitimate uses for tax dollars obviously – legitimate things for the state to spend money on – but any time we make cuts from public budgets, masking those cuts in the language of ‘suffering’ and ‘austerity’ seems a devious sort of play on words.

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45 thoughts on “You say austerity, I say prosperity

  1. Odd. Is this a crosspost from Red State?

    The reason lower income people ‘suffer’ when income or services are taken away is that their more marginal lifestyle means a higher percentage of their income and government services go towards concerns further down Maslow’s Hierarchy of Needs. For example, a greater tax burden on the wealthy may mean fewer vacation homes or less time to go back to school for an MBA, whereas reduced government services more likely means public school music and art programs are cut, after school care is eliminated, public transmit is reduced (crippling the carless), and police services are reduced.

    So do you honestly think the ‘suffering’ is equivalent in those scenarios?

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  2. That’s all well and good. We can anticipate or discuss all many of secondary effects from budget cuts. But if the direct losers from budget cuts are of one group, a group that has little political power and is generally screwed over, it is reasonable to note who is getting what. If the direct actions favor one group over another why distract from that.

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  3. “Let’s start paying civil servants comparable wages to the wages paid in the private sector.”

    Remember when that sentence meant a pay raise?

    Now it means a pay cut.

    I reckon that that right there is part of the problem.

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        • @Ian M., Dude. No. My complaint is that public union workers in many places across the country have far too high of salaries and their benefits packages cost way, way too much. All of this is funded on the public dime. The union dues don’t pay for the salaries or benefits of union workers, they pay for the union administrative stuff. The public employee sector is eating up way too much of the budget. Here, check this article out to get a sense of what I’m talking about.

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          • @E.D. Kain, You think workers are overpaid, got it. “Union administrative stuff” is maintaining the contract which is a legal mandate. It’s like saying the public defender’s budget is pays for “legal stuff”. You don’t like workers having rights or being well paid and posit balanced budgets on sticking it broadly to those in the weakest position to resist. If you have a beef with specific unions or locals, call them out. Bad unions, like bad companies, should fail.

            As to the article, why shouldn’t a prison guard get paid six figures? It is a dangerous, stressful job which is in high demand due to our ridiculous incarceration rates. It’s no more absurd than someone making six figures in finance.

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          • @E.D. Kain, So are you opposed to unions in general? That seems to be the case. I realize that public sector unions don’t function exactly the same as private sector unions, but they also have limitations on their power. Most, if not all, public sector employees are legally barred from striking. So they need to take other tactics to protect and promote workers’ rights.

            Now, as a teacher, do I recognize that teachers’ unions are not interested in promoting education but in promoting teachers’ interests? Absolutely. And sometimes that directly works again the pursuit of best practice. And I don’t like it. In fact, I’m appalled by it (I’m non-union). But is it any different than any other union? Do labor unions care about the safety of the products they create? Not particularly.

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  4. “But one thing that irks me is the reaction that all these spending cuts ‘hurt’ the poor….”

    Okay, I guess I agree. Budget cuts hurt not just the poor but also the working/middle class. A Google search will find hundreds of articles on how the Christie budget hurt both.

    Here are a few selected, I mean cherry-picked, passages from one article.

    “Already, he [Christie] has cut the state’s mass-transit subsidy and stopped enrolling some lower-income adults in a subsidized health insurance program. He’s also proposed reducing weekly unemployment checks and, even before he was sworn in, hinted that food banks could see their state aid cut and told hospitals their reimbursements for treating the indigent will be cut in June.”

    “What particularly rankles some critics is that Christie is planning to eliminate a higher income tax for families who make over $400,000. “We should not cut taxes for rich folks at the same time we’re cutting funding for food banks,” said Ev Liebman, project manager for the watchdog group New Jersey Citizen Action.”

    “”Earlier this month, Christie slashed eligibility [for subsidized health insurance]. No more adults making more than 133 percent of the poverty level — about $29,000 for a family of four — can enroll.”

    “And nearly 12,000 legal immigrants who are not citizens are being ousted entirely from the FamilyCare insurance program on March 31.”

    http://www.nj.com/news/index.ssf/2010/03/nj_budget_cuts_could_burden_lo.html

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    • @Bob, Jobs make more of a difference than all of these things combined. If you don’t believe me go talk to someone who is unemployed. If the budget cuts can help get the private sector hiring again, then it will all be worth it. Hence the title of my post.

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      • @E.D. Kain, yeah, but that’s a big ‘if’. Everything I’ve been hearing about the present job market is that few companies are hiring even as the rest of the economy improves. Getting rid of people’s health insurance, transportation, and unemployment benefits based on a thin possibility of new job creation seems foolish. Even more foolish if we see a bunch of nurses out of work or with cut pay because hospitals are losing their subsidies to a “job creating tax cut”.

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        • @Alan Scott, Ok, first of all I never said we should simply stop spending altogether. I think unemployment benefits are a very good way to spend tax dollars especially during a recession. Nor did I say we should “get rid” of peoples’ health insurance. We should make people in the public sector who get it for free start paying premiums, co-pays, etc. just like the rest of the American workforce, but I think it’s absurd to say we should just get rid of it. The only way we’re going to see nurses or teachers out of work is if the unions who represent them won’t allow wages to freeze or go down, necessitating lay-offs. Why do we expect the rest of the country to undergo austerity while protecting public workers with the rest of the country’s money?

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          • @E.D. Kain, I’m not giving a blanket defense of every public union, we can always find examples of unions or business acting badly that doesn’t prove they are all bad or corrupt. Part of what you are saying comes off as, “darn why can’t we treat public employees are poorly as everybody else gets treated.” There is an old business saying, businesses get the unions they deserve. Many public employees have great pension nowadays because that was how they were compensated for not having the perks and salary of private business. The big bills for public pension are evidence of something we should probably want which is employees being promoted, getting experience and being long term workers. Part of the problem states have with pensions is that didn’t want to put the money aside to keep the pensions stable. That is certainly the way it is here in Alaska.

            Lay offs may be needed, i certainly can’t deny that. However you seem to be falling into the trap of turning a group unpopular to conservatives into a bogeyman. Many public employees do jobs that serve a different, dare i say, serve the public good. Nurses, prison guards, cops, fireman, courts…..cutting them is a bit different then laying off a fry cook.

            Which public employees get “free” health care? I know i pay what is called a premium to get my health care.

            This is more of a meta or general feeling comment, but the problem American workers have is not being treated to good by employers.

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            • @greginak, Public unions are an interesting problem. On one hand they really do hold a lot of cities hostage with threats of strikes for often ridiculous demands. On the other hand, they would not have that kind of leverage if we didn’t depend on them greatly. For example, we give garbagemen whatever they want because who wants their yard full of garbage? On the other hand, how do you put a dollar value on their service? We are very valuable but it’s not a skilled job. How does that shake out in wages? Tough call…

              We could also discuss the multitude of public employees in crap jobs that do not deliver an ounce of real benefit to the public. That’s where we need things like a return to the Efficency Movement and mayors willing to clean up and fight these powerful unions.

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      • @E.D. Kain, it’s nothing but classic supply side economics 101. I know you believe. But even so defending the Christie budget seems odd.

        Dose his budget do what you suggest?

        In response to sidereal you said, “It could mean more funds taken out of ridiculous teacher and administrator unions and placed directly into education.” Assuming what you imply is true dose the Christie budget do anything like that?

        In short, did Christie attempt to reduce wasteful spending in column A and transfer it to column B, help education or worthy safety-net programs?

        Perhaps he did. I didn’t see such in my admittedly cursory review.

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        • @Bob, Bob, over the past decade state coffers were filled up by the housing bubble. Local coffers, too. Property taxes soared. Spending went berzerk. Did we somehow, through all of this, magically fix our education system by pouring all this extra money into it? No. Because spending is not the only factor when it comes to improving education! Would decreasing spending back to the pre-bubble, turn-of-the-century levels hurt so bad? I doubt it. What we need to do is re-prioritize spending. We can do more with less, plain and simple.

          Is the Christie budget perfect? No. But it starts to attack the enormous shortfall there. It’s a start.

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  5. “What about lost jobs because of increasingly high taxes needed to pay for enormous public pensions? What about lost investment in the private sphere due to ever bloated tax rates to line the pockets of teachers unions and other public workers? “

    Careful ED – you’re starting to sound like a conservative…and it’s great.

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  6. “It could mean more funds taken out of ridiculous teacher and administrator unions and placed directly into education.”

    Assuming as per Ian M that the actual unions are funded by their members, this can only make sense if you mean taking money out of the benefits given to union members.

    Let’s see – you pay teachers less, or require them to work longer hours for the same wage and the money saved goes tobuy more textbooks or new school buildings, is that what you mean?

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      • @E.D. Kain, ED I’m starting to give up on this site, you are really losing it. Its been downhill since Bouie and Freddie left.

        First, given that poor people have a lot less money in the first place, it does indeed cause greater “suffering” when you move $1 of resources away from them instead of $1 in the form of higher taxes on the rich. And no, simply saying that higher taxes will prevent economic recovery ignores the many complexities of that (eg, demand side spending). Yes its complex, but its hardly out of line to point out that tax cuts for the rich and tax increases on the poor cause one group to suffer more htan the other. As for all this bitching about public sector unions, where is your libertarian streak when it comes to freedom of association? You completely ignore those rights. And wait, cutting money to all the “ridiculous teachers and their unions” and putting it “directly into education” doesn’t make any sense. What does that mean– “directly”? If you think, and I know you do, that getting better teachers is a key (or “the key”) to better schools, uh…that means paying them more, which is kinda what unions do. My sister is a teacher, and I’ll tell you she’s not in it for the bucks, but attracting smart people requires paying them more. If you think thats whats needed, then union pay scales are not the problem. Perhaps tenure is “a” problem, but then again, tenure is something that can attract people to a job, and if you want to attract good people, job security in the form of tenure is one way to do it. You can argue against tenure all you want, but if you get rid of it you better be prepared to up teacher salaries big time, because you just made their jobs a lot less attractive. And wait, that would go against what you want–to cut teacher pay!

        And by the way, all this talk about how great public servants are paid, yes, its true that many lower end public servants are well paid. However, that tends to be the low wage people who are paid above average. And frankly I think there’s something to be said for the public sector not being a giant Wal mart full of poorly paid cashiers. There is a reasonable case to be made for the government to pay its low wage workers a living wage that is a ticket into solid blue collar life. And if you look at all those bureaucrats and lawyers (who I am one of), it turns out we make a lot less in the public sector, even for the work we pull (believe me, I still pull 60 hour weeks and I make jack compared to what I made at a private firm). And yet I make a very good living, so people assume I’m a no good bureaucrat who steals your tax dollars while putting up red tape to screw private business. Welll excuse me, my coworkers and I are all pretty damn smart and succesful, we wanted to serve the public, and I deserve every dime I get from the government and more. We work harder, we are smarter, and we did better at every damn measure of merit than most people. So don’t assume that just because many bureacrats make more than you that I’m overpaid. Maybe you’re underpaid. Or maybe you get what you deserve.

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        • @D, Well seeing as you’re not really addressing my post, I’m not sure how to respond. But hey, it’s all gone downhill. I’m not really sure why you even bothered to comment.

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  7. Here’s what’s happening: the corporations are making incredible profits; they aren’t creating any jobs, but rather pocketing the money. It’s not a problem with progressives; it’s not a problem with unions; it’s not a problem with any of the conservative boogiemen. It’s that the businesses in the States refuse to create jobs. So perhaps (imagine this) you should be criticizing them. Crazy idea huh?

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  8. @E.D. Kain,
    The confusion is coming from the way you worded it in your post.
    “It could mean more funds taken out of ridiculous teacher and administrator unions and placed directly into education.”
    If you mean “It could mean funds taken out of ridiculous benefits that teach and administrator unions have gotten for their members out of state funds” then you should say that.

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