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Disaster Capitalism in the Budget Debate

Adam Eran: Historic tax reductions on the wealthy, and the Wall-Street-Fraud recession, have reduced public revenues, and this reduction now makes otherwise too-popular-to-cut programs vulnerable. But are such cuts really necessary?

Recent California State budget hearings had caregivers and educators testifying to their distress over proposed cuts. While undeniably, Wall Street fraud, not programs for widows and orphans, caused the disaster called the "Great Recession," government programs to serve our most vulnerable populations are where politicians now propose most budget cuts.In other words, economic crisis now serves the right’s political agenda. It’s a case of “Disaster Capitalism” meets public policy. Historic tax reductions on the wealthy, and the Wall-Street-Fraud recession, have reduced public revenues, and this reduction now makes otherwise too-popular-to-cut programs vulnerable. But are such cuts really necessary?

budget cuts

Dominating media discussions of the budget are questions like “How much spending on schools and the disabled must we cut?” not, "Why aren’t some of the most profitable corporations in the history of the world paying any taxes?" And certainly not, "Why are taxes on the wealthiest Americans at historically low tax rates during a historically high budget deficit?"

For a little perspective consider these facts:

  • The top 1% now receives 25% of all U.S. income (up from 11% in the Reagan years) and owns 40% of America’s assets (up from 25%).
  • 43.1% of total reported income--what Americans earning $1 million paid in taxes in 1961 (adjusted for 2011 dollars)
  • 23.1% of total reported income--what those $1 million-earners are likely to pay in taxes in 2011, based on the latest IRS data.
  • 47.4% of profits--what corporations paid in taxes in 1961.
  • 11.1% of profits--what corporations paid in taxes in 2011. (footnotes)

As for whether government is too big, or taxes and spends too much:

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If cutting spending remains your preference, remember that if the U.S. spent only three times more than its nearest military rival (China) on the Pentagon, the Federal budget would be in surplus forever. At the state and local level, the U.S. incarcerates five times more prisoners
than the world per-capita average, but our crime rates are no lower than nations with much smaller prison populations.Yet cuts to schools and the disabled are what is proposed to solve our budget deficits. And where are public discussions of the alternatives to cutting widows-and-orphan spending? Could American media favor its wealthy owners? Is the Pope Catholic?

We deserve better than empty gestures (like cutting legislators’ cell phones) in this budget debate, and can fund programs for our most
vulnerable populations without harming California’s or the U.S.’ economy. All the gay-married-Hispanic-terrorists in the world can’t
distract from the rise of the wealthy oligarchs, at the expense of the poor.

If you want to act to end this deception, then go to www.usuncut.org and participate in this thing called “democracy.”

Adam Eran