As the mainstream media fixates on the black gold washing up on the beaches of the Gulf Coast, the rest of the United States is quietly drowning in Red Ink.
Illinois is facing a $13 billion deficit for the upcoming fiscal year (roughly half of the state's operating budget), and it is just one of many states facing financial problems:
- "[Thirty-two] states have run out
funds to make unemployment benefit payments and that the federal
government has been supplying these states with funds so that they can
make theirpayments to the unemployed. In some cases, states have
borrowed billions."-- EconomicPolicyJournal.com,
- "Over the last two years, at least 45 states have slashed health, education and low-income assistance programs; 30 raised regressive sales taxes and fees; and 42 cut their payrolls through layoffs, unpaid leaves (furloughs) and hiring freezes. Since August 2008, state and local governments eliminated 192,000 jobs."-- WSWS.org, 5/21/10
Bob Herbert of the NY Times sums it up:
"A story that is not getting nearly enough attention is the ruinous fiscal meltdown occurring in state after state, all across the country. Taxes are being raised. Draconian cuts in services are being made. Public employees are being fired. The tissue-thin national economic recovery is being undermined. And in many cases, the most vulnerable populations--the sick, the elderly, the young and the poor--are getting badly hurt."--3/20/10
How did we get into such a predicament?
No"it is not because the terrorists attacked us; or because Obama is a Kenya-born card-carrying communist bent on destroying America; or any of the other conspiracy theories that Glenn Beck scrawls across his blackboard daily. "but it is a conspiracy, and it has been going on for thirty years.
- "Back in the 70s a Republican
strategist [and Reagan advisor]
named Jude Wanniski came up with what he called the two Santa Claus
theory: when Republican are in power they should cut taxes, spend like
drunken sailors and put it all on the national credit card--without ever
mentioning a word about the deficit they were creating. This allows
Republicans to be the tax cutting Santa Claus and the spending/stimulus
Santa Claus."--Thom Hartmann, progressive radio host and author, 6/1/10
In 1980, the Republicans' first official Santa Claus, Ronald Reagan, cut income taxes on wealthy Americans from 70% down to 27%, and reduced Corporate taxes until they accounted for less than 9% of federal tax revenues, instead of the 33% they represented in 1951.
It was called supply-side economics (a.k.a Reaganomics, Voodoo economics, or the "trickle-down theory"), and it claimed that if we cut taxes on wealthy Americans, they would invest that money in such wonderful ways that it would stimulate the economy, and benefits would "trickle down" to all Americans.
Of course, like most Republican theories, it didn't work--unless its real purpose was to bankrupt the government and destroy the American middle-class. In that case, it is working pretty well.
- In 1982, the first full year for
Reagan's policies, the economy shrank by 2%, the worst performance since
the Great Depression. -- Robert Freeman, CommonDreams.org,
- "Although it had taken the United States more than 200 years to accumulate the first $1 trillion of national debt, it took only five years under Reagan to add the second one trillion dollars to the debt. By the end of the 12 years of the Reagan-Bush administrations, the national debt had quadrupled to $4 trillion!"-- Allen W. Smith, Professor of Economics, Emeritus, Eastern IllinoisUniversity, Dissident Voice, 4/14/10
After a brief period of fiscal sanity during the Clinton Administration, George W. Bush was appointed President and took up right where Reagan and Poppa Bush had left off--cutting taxes for the rich, raising "defense" spending and starting wars; and paying for it all on the taxpayer's credit card. Bush's final year budget showed a record deficit of $1.4 trillion, and he had increased the National Debt to $9.849 trillion--the largest increase by any President in U.S. history.
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- In 1982, the first full year for Reagan's policies, the economy shrank by 2%, the worst performance since the Great Depression. -- Robert Freeman, CommonDreams.org, 5/14/06