Public-Sector Squeeze

By Max Fraad-Wolff and Richard D. Wolff
t r u t h o u t | News Analysis

Mon. Jan. 31, 2011 – A national campaign is now fully launched to make local, public-sector employees pick up a major share of the costs of the economic crisis.

Years of rising spending and falling revenue have carved a path of destruction through federal, state and local budgets. Deficits and debts have mounted, eroding taxpayer support for government spending in general and for public employees particularly.

In response to deep economic pains in middle-class communities, major efforts are under way, from California to Maine, to balance budgets through major cuts in services, wages, benefits and employment.

Federal, state and local governments are staggering from reduced tax revenues because of unemployment, reduced production, lower investment and the housing collapse.

Washington borrowed huge sums from foreign investors, domestic big business and the rich. These funds went to bail out select businesses and to help (partially and temporarily) broken state and local government budgets.

Because Democrats and Republicans agreed last December to not increase income, estate and capital gains taxes, broken state and local budgets face declining federal support.

This is driving governors, mayors and state legislatures to raise taxes and/or to slash payrolls and programs. Of course, some cutting and tax increases are required. The real social decisions involve what to cut, how much, for whom and whose taxes to increase.

The pressure is on to shift the heavy costs of economic crisis onto the middle- and low-income communities already stung by unemployment, foreclosures, reduced job benefits and rising job insecurity.

The campaign to make the middle- and lower-income Americans pay now focuses on public employees - especially their numbers, incomes and benefits. Battles loom over which state and local job holders get fired, whose pensions/benefits will be reduced and which public services will stop being available.

Politicians will keep silent on the key alternative to deep cuts –-
precisely because it would otherwise be on most citizens' agendas.

That alternative would be to raise the tax share paid by leading firms and the wealthiest 5-10 percent of citizens. In most cases, this means returning to the levels of taxation in the 1980s.

Whatever may be needed in the way of reasonable rationalizations and savings in government budget outlays, we will not exit the continuing economic crisis by massive reductions in public service provision and employment.

Those only further depress the economic conditions and well-being of middle- and lower-income communities. This would be a more and more cruel version of the track we have been on for decades. Sadly, this approach is neither new nor likely to work.

The facts don't support the attacks on public employees. Last year, total state and local employment declined by 407,000 jobs. Figure 1 shows what has happened to public employment in our states and localities over the last half-century.

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Gawd Bless WikiLeaks

Go to “Common Dreams” and read about Julian Assange. Our ace press tried to smear Assange but, to no avail.  Arrested in Sweden, Assange was brought to London on a morals charge. He is on bail with an ankle bracelet to keep him in check. He has restricted movement, like a common criminal, not the hero Assange really is.