The Coming Shutdowns and Showdowns: What’s Really at Stake

deficit wolvesWisconsin is in a showdown. Washington is headed for a government shutdown.

Wisconsin Governor Scott Walker won’t budge. He insists on delivering a knockout blow to public unions in his state (except for those, like the police, who supported his election).

In DC, House Republicans won’t budge on the $61 billion cut they pushed through last week, saying they’ll okay a temporary resolution to keep things running in Washington beyond March 4 only if it includes many of their steep cuts — among which are several that the middle class and poor depend on.

Republicans say “we’ve” been spending too much, and they’re determined to end the spending with a scorched-earth policies in the states (Republican governors in Ohio, Indiana, and New Jersey are reading similar plans to decimate public unions) and shutdowns in Washington.

There’s no doubt that government budgets are in trouble. The big lie is that the reason is excessive spending.

Public budgets are in trouble because revenues plummeted over the last two years of the Great Recession.

They’re also in trouble because of tax giveaways to the rich.

Before Wisconsin’s budget went bust, Governor Walker signed $117 million in corporate tax breaks. Wisconsin’s immediate budge shortfall is $137 million. That’s his pretext for socking it to Wisconsin’s public unions.

Nationally, you remember, Republicans demanded and received an extension of the Bush tax cuts for the rich. They’ve made it clear they’re intent on extending them for the next ten years, at a cost of $900 billion. They’ve also led the way on cutting the estate tax, and on protecting Wall Street private equity and hedge-fund managers whose earnings are taxed at the capital gains rate of 15 percent. And the last thing they’d tolerate is an increase in the top marginal tax rate on the super-rich.

Meanwhile, of course, more and more of the nation’s income and wealth has been concentrating at the top. In the late 1970s, the top 1 percent got 9 percent of total income. Now it gets more than 20 percent.

So the problem isn’t that “we’ve” been spending too much. It’s that most Americans have been getting a steadily smaller share of the nation’s total income.

At the same time, the super-rich have been contributing a steadily-declining share of their own incomes in taxes to support what the nation needs — both at the federal and at the state levels.

Robert ReichThe coming showdowns and shutdowns must not mask what’s going on. Democrats should make sure the public understands what’s really at stake.

Yes, of course, wasteful and unnecessary spending should be cut. That means much of the defense budget, along with agricultural subsidies and other forms of corporate welfare.

But America is the richest nation in the world, and “we’ve” never been richer. There’s no reason for us to turn on our teachers, our unionized workers, our poor and needy, and our elderly. The notion that “we” can no longer afford it is claptrap.

Robert Reich
Robert Reich’s Blog


  1. bigbadjohn says

    it’s starting to look a whole lot like there will be another civil war. the entire country is about to shut down. not just the federal government, but state and local. i guess the rich will have to buy their own military protection because they are outnumbered 10 to 1. is that what they are advocating?

    • DarrelB says

      “They’re also in trouble because of tax giveaways to the rich.”

      I’m still looking for someone to explain to me how letting someone keeping the money they legitimately earned is a “giveaway”. You haven’t given them anything; they have earned it. Where does the Left get this idea that everything belongs to them and anything anyone else gets is a “giveaway”? The entire notion is nonsensical. Wouldn’t the “giveaway” be when the government forcibly takes money from one person and gives it to someone else? To me that sounds like a “giveaway”.

      What it says to me is that the Leftist mind does not believe in freedom but rather control.

      • marie says

        Sorry I pushed the wrong button. I mend “thumb-down”.
        The Government in an way is taken tax-money “forcibly”, for we have no choice about paying it yes-or-no. I am quiet willing to pay taxes for the services we get from the Government, but definitely not happy when it fattens the bellies of the super rich and the corporations that put money above ethics.
        And I can not see how those super rich and their corporations sitting in their comfortable office chairs giving commands, deserve that money more then the common people working long heavy hours sometimes in dangerous or/and unhealthy circumstances, often not earning enough to cover their rent and bare necessities (not speaking of the high health-insurance)..

    • DarrelB says

      Au contraire, Lefty. Liberals are outnumbered at least 2 to 1. If you count guns it has to be even much higher. I’m afraid your poor little Leftist army is going to be pretty small. If there is a civil war it is going to be the forces of freedom against the slackers and takers. Don’t worry though, you can throw your hot lattes at them.

  2. Lauren Steiner says

    Everyone interested in this issue must read “Winner-Take-All Politics: How Washington Made the Rich Richer and Turned its Back on the Middle Class” by Jacob Hacker and Paul Pierson. It shows how it is not economics that led to the middle class incomes remaining flat over the last 40 years while the super rich’s income went up but politics – policies that politicians actively pursued to help the rich and ones they did not pursue that would have helped the middle class. Fascinating reading.

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