Favorite

State deficits: What in the world happened? 

What accounts for the revolutionary spending binge in Washington and state capitals?

dumas1-1.jpg

Not long ago, governments were running such big surpluses that they were cutting taxes and paying down old debt. Suddenly, spending is so out of control that, to stave off bankruptcy, Congress and the states are slashing popular programs like nutrition for infants and pregnant women, home heating help for the aged and poor, environmental protection, medical research and school meals.

We all have to share in the sacrifice, explained Sen. Mark Pryor, who seems to support this form of economizing, though he might have further explained that people at the top will not be sacrificing but gaining.

People who haven't had time to pay attention to the fiscal rhythms must wonder, what in the world happened? What accounts for the revolutionary spending binge in Washington and state capitals? Our bustling neighbor, Texas, run for years by conservative Republicans, has to cut $27 billion, and it's going to take it out of schools, colleges and medical care for children and the poor. To get into the game, the emboldened Republican minority in the Arkansas legislature is scratching around for services to eliminate. Arkansas has no budget crisis, but with the help of a few Democrats they can create one like Texas's in a couple of years.

The revolution was not in spending but in propaganda. The people who loved Ronald Reagan's mantra about smothering government carried the day in the last election. They have their chance now to get the government's boot off the necks of the rich and big business.

Runaway government spending on social programs or even on banks and General Motors is not the cause of the federal or state deficits. Mainly, it is a dramatic decline in government revenues, owing to tax cuts and the deepest, longest recession in 70 years engendered by these conservatives.

The accompanying chart, prepared by the Center for Budget and Policy Priorities, provides the clearest depiction of the deficit I have seen. It is a little out of date because it does not reflect the tax deal by the Republicans and President Obama that makes the short-term deficit worse than it appears here. By extending tax cuts for the rich and lowering payroll taxes it deepens the hole in government revenues.

The deep orange and blue waves represent the revenue loss from the Bush tax cuts and from the slump in tax receipts in the recession. The light orange and light blue waves represent increased government spending on the wars and on unemployment benefits and stimulus to generate economic activity.

You will notice the black line along the bottom, which shows what the deficit would be without those factors—small to nonexistent. For the sake of simplicity, I suppose, the chart does not show the impact of the Republican Medicare drug law of 2004, which greatly increased the government payout to insurance and pharmaceutical companies. Without that and the other factors shown on the chart, surpluses would be piling up every year.

In short, runaway spending on business regulation and safety-net programs is not even a minor cause of the budget crisis.

Let's take Texas. It's in a jam not because the state has gone crazy helping the poor. Four years ago, the Republicans overhauled Texas taxes, sharply lowering property taxes and making up for it by massaging its old corporate franchise tax into something called a margins tax. It was supposed to produce a lot of money but, as you can imagine, it was filled with so many loopholes that it fell a few billion dollars a year short of Gov. Rick Perry's projections. So they're bringing the ax down on the schools, Texas's once-great university system, mental health services and medical care for the poor.

As in Washington, the Republican-inspired fiscal crisis gives Texas conservatives what they always wanted: an excuse to eliminate programs for the general welfare.

In Arkansas, we don't have Washington's or Texas's problems, thanks appreciably to Mike Huckabee. Yes, him. For 10 years, while others were cutting taxes, he raised them so often that the government was rolling in money. He ought to run for president on that record.

Favorite

Tags:

Comments

Showing 1-1 of 1

Add a comment

 
Subscribe to this thread:
Showing 1-1 of 1

Add a comment

More by Ernest Dumas

  • Sex and Trump

    No one, least of all Donald Trump, should be surprised when sex puts him in mortal jeopardy, which seemed to be the case last week when his personal lawyer pleaded guilty to violating the law by arranging $280,000 in hush payments to a porn actress and a Playboy model who were prepared to tell voters about having sex with him.
    • Dec 13, 2018
  • A decent man

    The beatification of George H.W. Bush, which even the current president signaled was OK, would have surprised the 41st president, who seemed to have accepted the public's verdict that, although a waffler, he was a decent man who did his best and didn't do any harm to the people of the country or the world with whose well-being he was entrusted for a time.
    • Dec 6, 2018
  • Prelude to war

    President Trump's casual disinterest in the murder of Jamaal Khashoggi by Saudi Arabia's leaders, a crime he once abhorred, may be only the final repudiation of America's ancient obedience to human rights, but what if it is much more? What if it is a prelude to war?
    • Nov 29, 2018
  • More »

Readers also liked…

  • Along the civil rights trail

    A convergence of events in recent days signaled again how far we have come and how far we have yet to go in civil rights.
    • Jan 18, 2018
  • The Oval outhouse

    One thing all Americans finally can agree upon is that public discourse has coarsened irretrievably in the era of Donald Trump and largely at his instance.
    • Jan 18, 2018
  • Shrugging off sulfides

    The Arkansas Democrat-Gazette reported a shocker on its front page Sunday. The rotten-egg odor from the Koch brothers' sprawling paper plant at Crossett is still making people sick, but the state's pollution control agency is unaware of the problem.
    • Mar 29, 2018

Latest in Ernest Dumas

  • Sex and Trump

    No one, least of all Donald Trump, should be surprised when sex puts him in mortal jeopardy, which seemed to be the case last week when his personal lawyer pleaded guilty to violating the law by arranging $280,000 in hush payments to a porn actress and a Playboy model who were prepared to tell voters about having sex with him.
    • Dec 13, 2018
  • A decent man

    The beatification of George H.W. Bush, which even the current president signaled was OK, would have surprised the 41st president, who seemed to have accepted the public's verdict that, although a waffler, he was a decent man who did his best and didn't do any harm to the people of the country or the world with whose well-being he was entrusted for a time.
    • Dec 6, 2018
  • Prelude to war

    President Trump's casual disinterest in the murder of Jamaal Khashoggi by Saudi Arabia's leaders, a crime he once abhorred, may be only the final repudiation of America's ancient obedience to human rights, but what if it is much more? What if it is a prelude to war?
    • Nov 29, 2018
  • More »

Most Viewed

  • Hope and change LR

    While I was away, Frank Scott Jr. won a historic victory in a runoff with Baker Kurrus to succeed Mark Stodola as Little Rock mayor.
  • Sex and Trump

    No one, least of all Donald Trump, should be surprised when sex puts him in mortal jeopardy, which seemed to be the case last week when his personal lawyer pleaded guilty to violating the law by arranging $280,000 in hush payments to a porn actress and a Playboy model who were prepared to tell voters about having sex with him.
  • No leash

    Living as I do in the remote provinces, I often find myself fascinated by the cultural advances of America's great metropolises. Last week, for example, The New York Times featured an entertaining column urging people to walk cats on leashes. If I tried that, I'd definitely have a fight on my hands.

Most Recent Comments

  • Re: Herd shifts

    • Answer: The Russian hacking story was the basis for the whole "Russians are on Trump's…

    • on December 12, 2018
  • Re: Herd shifts

    • Tra-la, indeed. And no answer to the question. Why would the DNC alter evidence of…

    • on December 12, 2018
  • Re: Herd shifts

    • And I quote, "Actually, no, I can't think why anybody would suspect that the DNC…

    • on December 12, 2018
 

© 2018 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation