Sunday, January 08, 2012

Governor Brown promotes race to the bottom

Governor Makes Deep Cuts to the Safety Net
On Thursday, January 5, Governor Jerry Brown released his proposed 2012-13 spending plan, addressing a $9.2 billion projected shortfall for the remainder of 2011-12 and the upcoming 2012-13 fiscal years. The Governor proposes $10.3 billion in “solutions” to close the identified gap and provide a $1.1 billion budget reserve. The gap stems from a $4.1 billion shortfall in 2011-12 and a $5.1 billion projected shortfall in 2012-13.
 The Governor continues his poorly informed, misguided austerity program which proposes  to reduce the budgets through cut backs in services, cuts to public employment, and reduction in public pensions.
Budget cutting to balance the budget will not get us out of this hole.  Look at Ireland, Greece, or Spain. Do we  really want to follow the lead of Michigan, Wisconsin, or Mississippi (each of these economies is smaller than California)?   Budget cuts only start a downward spiral of pain. We can not simply cut our way out of the crisis, budget cuts and lay offs make the recession worse. Budget cuts and lay offs lead only to more budget cuts and lay offs.
The current budget crisis was caused by the real estate crisis, the sub prime loan crisis, and the  national economic crisis.  This crisis was created by finance capital and banking, mostly on Wall Street ,ie. Chase Banks, Bank of America,  Washington Mutual,  Country Wide, AIG, and others.   Finance capital produced a $ 2 trillion bailout. 

While their will be cuts, we on the left should explain an alternative, an expansion of public jobs and fiscal stimulus.  The money for such as stimulus is available.
Government must protect and empower our citizens. To foster prosperity  it must prepare the young for jobs, careers, and  civic participation.  Protection includes health care,  education, social security, safe food, environmental protection, safe streets, job protection, etc.
Our economy needs roads, bridges, telephone lines, communications systems, energy and quality education.  These services make freedom and prosperity possible. Conservative opposition to these services ignore the economy’s  need for infrastructure.  Prosperity depends upon having a viable educational system and a well functioning infrastructure.
There should be a significant tax on the sale of stocks, bonds, and financial instruments.  This is the same source as proposed by the AFL-CIO.  They argue for a 0.25 % tax on sales.  We should propose a 2.5 % tax.  This would fund public jobs, infrastructure rebuilding.  Such a tax is called a financial transaction tax.  Others call it a Robin Hood tax.  Most of Europe already has such a tax. 
We need to tax the very rich to produce needed revenue to create jobs and and to invest in the future.  The Jerry Brown cut, cut, cut approach is a failure.
The Governor’s proposal assumes that voters approve a measure that would be placed on the November 2012 ballot that would raise $6.9 billion in 2011-12 and 2012-13. His proposed spending plan also includes $5.4 billion of additional spending cuts that would be triggered on if voters fail to approve the proposed tax measure.
The Governor’s proposals include deep cuts to health and human services programs, as well as to student aid and child care. Health and human services and child care programs would be targeted for $2.5 billion of the $4.2 billion in proposed spending reductions. The Governor also proposes $301.7 million of cuts to the Cal Grant Program, which provides financial aid to lower-income students pursuing post-secondary education. 

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