Thoughts as the budget debate moves to the next phase

Posted in 82nd Legislature, Around The State, Commentary, HD-20, HD-52, jobs, Taxes, The Budget, The Lege at 10:51 am by wcnews

The Show goes on.  Today the Texas House is set to begin the 82nd Legislatures first serious debate, out in the open, debate of the budget for th 2012-2013 biennium.  It’s likely to last into, if not through, the weekend.  Kuff asks a question that was the impetus for the post below this one, What was this past election about? The last election was for many people, who did and did not vote, about jobs. But, unfortunately, for most that did vote it was about something else.

I don’t know how the campaigns actually went in most House districts. There wasn’t a competitive race in mine, so the vast majority of what I saw that an average voter would have seen came from the Governor’s race, where the Republican message was basically “Texas rulz, Obama droolz”. Rick Perry certainly didn’t campaign on the need to slash the budget in Texas. Sure, he talked at length about out of control spending, but that was always clearly in the context of talking about Washington and Obama and the Democratic Congress. I realize I’m Monday morning quarterbacking to an extent here, but does anyone disagree with the claim that Rick Perry has basically been running a nonstop anti-Washington campaign for about two years now? Does anyone disagree that the 2010 election was all about the anti-Obama vote coming out in force, abetted by a weak economy and a heaping measure of anti-immigrant sentiment?

Looking over the two candidate issue pages for the two current state representatives in Williamson County, (Larry Gonzales and Charles Schwertner), there were some similarities and differences.  The biggest similarity was that neither one of them spoke of gutting funding for public education, nursing homes, health care, and mental health – the least among us. Gonzalez being in a more competitive race, where dispirited Obama voters stayed home, did little to rile them up and largely left Obama out of it. Mostly he just blew the GOP’s “liberal” dog whistle as often as possible which was paid for by Bob Perry. Why he even had this to say about education back then, going so far as to quote the father of the Democratic Party.

Larry knows that education is not only the ticket to a successful future but — as Jefferson believed — the only true way to preserve our democracy. A great public education is a critical first step to a successful career in our modern economy. More and more, a college degree is also required. That’s why Larry is dedicated to providing a world-class education to our K-12 children, but also to finding ways to expand the opportunity for a college education to as many Texans as possible.

Schwertner, on the other hand, not having an opponent was able to go full wing-nut.   His campaign was all about Obama, cutting taxes, and protecting tax loopholes for businesses. Neither on of them campaigned on the morally bankrupt policies that Schwertner voted to pass out of the Appropriations Committee.  Nor did they campaign on the budget that’s likely pass through the House that will cause massive job loss in Texas.  The last election was about national discontent, trickling-down to the local level.  But Texas’ budget this session, unlike 2009, will have to be balanced without the help of the federal government.

Much of what you will see over the next several days will be more of what EOW calls The Show.  It is at the heart an attempt to bring political cover to the GOP leadership in the Lege for what they will eventually have to be done.

Once The Show is over, the RDF will be used.  Fees and taxes, will be raised.   Cuts will have been made too.  But before this can be agreed upon, we must sit through The Show.


Political cover is what The Show is all about.  What Ogden said in that recent talk show appearance likely still holds for the coming budget.  All Perry and the wing nuts need is several months of Op-Eds, blog posts, TV and newspaper stories, etc… to highlight how bad things will be if a “cuts only” budget is passed.  Then, and only then, will Perry and the wing nuts begrudgingly accept “reality” and do what they knew they were going to to months before.

It’s unlikely the budget will be resolved in the regular session. What is likely to happen is that the shortfall number will be reduced even further, it currently stands at $23 billion, down from $27 billion. Money will be added from new taxes and fees, ending unfair tax loopholes for the wealthy and corporations, and likely an increased revenue estimate from the Comptroller by the Summer.

This is just the next step in a process that will last for a few more months.


Economic disconnect, we need jobs

Posted in Employment, jobs, Right Wing Lies, The Economy, Unemployment at 12:39 pm by wcnews

There is a fundamental economic disconnect right now, we need jobs.  The Left Labor Reporter lays it out pretty well right here, Right-wing economic policy is about profits, not jobs.

The right wing’s conventional wisdom holds that higher profits translates into more jobs, but in 2010 that didn’t prove to be the case. The US Commerce Department reports that US corporations’ profits in the fourth quarter of 2010 were up 29.3 percent over 2009, but these profits generated only an average of 60,000 new jobs in 2010. There was better news in February when the economy generated 192,000 new jobs, a welcomed but still modest figure.

“US corporations are “sitting on over $1.5 trillion of cash right now, writes economist Robert Reich on his blog. “They won’t invest it in additional capacity or jobs because they don’t see enough customers out there with enough money in their pockets to buy what the additional capacity would produce.”

If states like Texas continue to cut public sector payrolls, there will be even fewer customers out there with enough money to buy what the private sector produces and there will be even fewer new jobs for our growing population.

That describes the failed promise of the GOP’s tax scheme, aka trickle-on economics, to a T.  The theory, the so-called Laffer curve , has never lived up to it’s promise .

On the conservative side of things, the thrust of the Laffer Curve has been political – offering the potential for a “Two Santas” mode of budgeting that has allowed Republicans to woo the electorate with tax cuts without offering unpopular spending cuts, as well as to portray Democratic efforts to balance the budget through raising taxes as counter-productively. In addition to the immediate partisan implications, the Laffer Curve has been able to define the tax debate in such a way that taxes are seen as distorting the economy away from a pattern that is a priori assumed to be the most efficient and optimal pattern possible. In other words, any effort to expand the state will be ultimately inefficient and self-defeating.

A progressive counter to this theory would be to ask – what about government spending, or in other words, social consumption? Because what the Laffer Curve leaves out, and this is endemic of conservative thought, is what taxes pay for. Keep in mind that the premise of the Laffer Curve is that revenues decline because people stop working when taxes eat up their income. However, if we think of taxes as financing the collective or social consumption of goods – what scholars sometimes call the “social wage;” think things like Social Security and other forms of government-provided income – then a decrease in after-tax wage income might be matched by an increase in the social wage, such that real income doesn’t change at all and eliminating any disincentive effect. Indeed, when we think about the actual distribution of income, taxes, and public benefits, for many people the change in income might actually be positive.

In other words, the Laffer Curve doesn’t necessarily bend at all. Instead, as we move from left to right on the X axis, tax revenue might increase or hold steady, and the only thing that shifts is the distribution of income between the individual consumption of consumer goods from wage income (i.e, the “market wage”) to the social consumption of collective goods ( i.e, the “social wage”).

Since it took over as our country’s preeminent economic theory,  thanks to Ronald Reagan, the real-world results of the Laffer curve have been devastating for most Americans.  The rich got richer, and everyone else got poorer. Profits up, wages down. Who ever would have thought that taxing less, would bring in less money and create massive deficits?  And that lower taxes on the rich would only allow them to fatten their bank accounts and bankrupt everyone else?

What’s lacking in this debate is someone to speak out against it.  Like someone with a bully pulpit, that’s a Democrat…anyone coming to mind?  Watch this segment from TRMS last night.  About 4:30 mark she starts talking to economist Dean Baker.

Visit msnbc.com for breaking news, world news, and news about the economy

Baker also has this take-down of recent lies about Social Security.

The hottest sport these days in Washington is seeing how many incorrect or misleading statements about Social Security you can get in one column. All the major media outlets are fully on board, anxious to convey any misinformation that reflects badly on the program. And there are plenty of deep-pocketed funders like Wall Street investment banker Peter Peterson who are happy to finance the effort. Hence we are seeing a plethora of pieces decrying the high-living seniors who are getting fat on their Social Security checks.

The President’s inability and unwillingness to fight for the the pillars of the Democratic Party, Social Security in particular, is disappointing to say the least. This, Why I didn’t sign deficit letter, is more along the lines of what Democrats and many Americans hoped that Obama would be fighting for – jobs and the middle class.

Years of underinvestment in the public sector—in infrastructure, education and technology—mean that there are ample high-return opportunities. Tax revenues generated by the higher short- and long-term growth will more than pay the low interest costs, implying significant reductions in deficits. Any firm that could borrow at terms similar to those available to the U.S., and with such high return projects, would be foolish to pass up the opportunity.

So, too, increased progressivity of the tax system—shifting the burden from low and middle income Americans, who have seen their incomes decline, to upper income Americans, the only group in the country that has prospered for the last decade—would have double benefits. The shift would stimulate the economy in the short run, and reduce the growing divide in the country in the long run.

With a quarter of all U.S. income going to the upper 1 percent, and America’s middle class actually facing lower incomes than a decade ago, there is only one way to raise more taxes: Tax the top.

A corollary of this inequality is that slight increases in the taxes at the top can raise large amounts of revenue. Just making the tax system fairer and more efficient at the top—eliminating the massive corporate welfare hidden in the tax system and the peculiar provisions that allow the speculators and bankers who helped cause the crisis pay far lower taxes than those who work for their income—would go a long way toward deficit reduction.

We need jobs. Our economy will not be sound again until we put people back to work. Our federal, state, and local governments shedding jobs will only hurt our economy more. It’s unbelievable to me that what got us out of the Great Depression last century is being ignored this century.


The return of the Trans-Texas Corridor

Posted in 82nd Legislature, Around The State, Bad Government Republicans, Privatization, Right Wing Lies, Transportation at 2:17 pm by wcnews

That the Trans-Texas Corridor (TTC) is not dead shouldn’t surprise anyone.  It’s resurrection is a direct result of last year’s election results.   Both sides whether it’s called Democratic or Republican, liberal or conservative, left or right, believe that we need to build roads for the good of our state’s economy.  The difference comes in how we pay for them.

One side (the left) believes we should use taxes, levied fairly, to pay to build roads and keep public ownership of them.  The other side (the right) believes that we can get a better deal selling/leasing them  to corporations who will then toll them and profit from them for decades.

For that reason the TTC cannot and will not die.  Because the GOP in Texas refuses to raise taxes to pay for roads. Therefore this is the only “solution” that fits their ideology that they can come up with to build roads in Texas. Since they refuse to raise taxes and all they have is privatization schemes. And we know how those end up – they cost more than if we’d have just paid for it with taxes. Until the GOP is out of power the TTC will keep coming back, like Jason from Friday the 13th.

Here’s Terri Hall, Phillips’ bill resurrects the Trans Texas Corridor.

The Trans Texas Corridor (TTC) just won’t die. State Representative Larry Phillips has introduced HB 3789 which resurrects the TTC, without the reviled name attached. It’s a betrayal of Texans who were promised by nearly every elected official in the state that the TTC was DEAD.  I didn’t believe it, but many Texans did and voted to re-elect Rick Perry.

Not only is it believable but it was inevitable. It’s the only plan that has any chance as long as the GOP is running this state.

[UPDATE]: But they will take from transportation funds to pay for a solution in search of a problem, TX Photo ID.

Asking the right questions

Posted in Around The State, Right Wing Lies, Taxes, The Budget at 10:50 am by wcnews

This is what we’ve been lacking from Democrats in Texas for too long. Thank you Rep. Mike Villarreal (D-San Antonio) for finally asking the right question, Democratic lawmaker to Speaker Straus: Analyze this.

When the Legislative Budget Board predicted a proposed state budget with deep cuts would cost the state hundreds of thousands of jobs through the next two years, some GOP leaders said the economic effect would be even worse if they raised taxes instead of cutting.

Rep. Mike Villarreal, a San Antonio Democrat whose request prompted the LBB’s jobs analysis, is asking for details.

In a letter to Speaker Joe Straus, Villarreal asked the House leader to request that the LBB to “run the same economic impact analysis on a budget with fewer cuts and more revenue. The revenue should come from using the Rainy Day Fund to some degree and forcing big corporations to pay their fair share.” [Emphasis added]

Villarreal specified that the new analysis should including closing tax loopholes, including one that Houston Chronicle/San Antonio Express-News columnist Patricia Kilday Hart wrote about Sunday: “I recommend we start with the high-cost natural gas tax loophole,” Villarreal said.

Here’s another question, States broke? Maybe they cut taxes too much.

In his new budget proposal, Ohio Republican Gov. John Kasich calls for extending a generous 21 percent cut in state income taxes. The measure was originally part of a sweeping 2005 tax overhaul that abolished the state corporate income tax and phased out a business property tax.

The tax cuts were supposed to stimulate Ohio’s economy and create jobs. But that never happened once the economy tanked. Instead, the changes ended up costing Ohio more than $2 billion a year in lost tax revenue; money that would go a long way toward closing the state’s $8 billion budget gap for fiscal year 2012.

“At least half of our current budget problem is a direct result of the tax changes we made in 2005. A lot of people don’t want to hear that, but that’s the reality. Much of our pain is self-inflicted,” said Zach Schiller, research director at Policy Matters Ohio, a liberal government-research group in Cleveland.

Sound familiar, of course it does.

In Texas, which faces a $27 billion budget deficit over the next two years, about one-third of the shortage stems from a 2006 property tax reduction that was linked to an underperforming business tax.

Underperfoming? I don’t think so. It was known when it was implemented that it would not perform. Therefore it’s performing as designed.

Before California’s Proposition 13 triggered a nationwide tax-cut revolt in the late 1970s, state and local taxes accounted for nearly 13 percent of personal income in 1972, Bartik said. By 2007, it was 11 percent.

State corporate income taxes have fallen as well. Once nearly 10 percent of all state tax revenue in the late ’70s, they accounted for only 5.4 percent in 2010.

“It’s a dying tax, killed off by thousands of credits, deductions, abatements and incentive packages,” according to 2010 congressional testimony by Joseph Henchman, the director of state projects at the Tax Foundation, a conservative tax-research center.

Even now, as states struggle to provide basic services and ponder job cuts that threaten their economic recovery, at least seven governors in states with budget deficits have called for or enacted large tax reductions, mainly for businesses.

Five are newly elected Republicans in Florida, Maine, Michigan, New Jersey and Wisconsin. The others are Republican Jan Brewer of Arizona and Democrat Beverly Perdue of North Carolina.

Their willingness to forgo needed tax revenue is hard to fathom, as states face a collective $125 billion budget shortfall for the coming fiscal year, said Jon Shure, the deputy director of the State Fiscal Project at the Center on Budget and Policy Priorities, a respected liberal research institute in Washington.

“To be cutting taxes when you’re short of revenue is like saying you could run faster if you cut off your foot,” Shure said.


History suggests otherwise, however. After the nation recovered from the 1990-91 recession, 43 states made sizable tax cuts from 1994 to 2001 as the economy surged. Twenty-eight states, in fact, reduced their unemployment insurance payroll taxes after 1995.

But states that cut taxes the most ended up with the largest budget shortfalls and higher job losses when the economy slowed again in 2001, according to research by the Center on Budget and Policy Priorities.

To be sure, states have made bad budget decisions on the spending side as well, said Robert Ward, deputy director of The Nelson A. Rockefeller Institute of Government, a state-government research center at the State University of New York at Albany.

Part of the problem is that the public wants everything but doesn’t want to pay for anything, Ward said.

“People want something for nothing. They want big increases in education and health care spending. They want good roads. They want lots of parks, and they don’t want to pay more taxes,” Ward said. “But at the federal, state and local levels, we are hit with the reality that there is no free lunch.”

Right. There is no free lunch. But the rich and corporations in our state and country have been eating free lunches for years. It’s time for them to pay their fair share. Thank you Rep. Villarreal for asking the right question.

[UPDATE]: Rep. Villarreal’s weekly video Mike’s Mic:

Privatized profit, socialized risk – corporate prisons edition

Posted in Around The State, Criminal Justice, Had Enough Yet?, Privatization, Right Wing Lies at 9:29 am by wcnews

I would encourage everyone to read/listen to these two reports in this post on corporate prisons. Essentially corporations like the GEO Group and Correction Corporation of America (CCA) ran a scheme to get counties to build and pay for their prisons. And now that there are no inmates to fill the jails, the counties are left holding the bag. The counties still owe millions in debt but don’t have the prison “profit” to pay it off. Therefore the taxpayers must foot the bill to keep the county from defaulting on the loan.

From NPR, Private Prison Promises Leave Texas Towns In Trouble.

The country with the highest incarceration rate in the world — the United States — is supporting a $3 billion private prison industry. In Texas, where free enterprise meets law and order, there are more for-profit prisons than any other state. But because of a growing inmate shortage, some private jails cannot fill empty cells, leaving some towns wishing they’d never gotten in the prison business.

It seemed like a good idea at the time when the west Texas farming town of Littlefield borrowed $10 million and built the Bill Clayton Detention Center in a cotton field south of town in 2000. The charmless steel-and-cement-block buildings ringed with razor wire would provide jobs to keep young people from moving to Lubbock or Dallas.

For eight years, the prison was a good employer. Idaho and Wyoming paid for prisoners to serve time there. But two years ago, Idaho pulled out all of its contract inmates because of a budget crunch at home. There was also a scandal surrounding the suicide of an inmate.

Shortly afterward, the for-profit operator, GEO Group, gave notice that it was leaving, too. One hundred prison jobs disappeared. The facility has been empty ever since.


For the past two years, Littlefield has had to come up with $65,000 a month to pay the note on the prison. That’s $10 per resident of this little city


To avoid defaulting on the loan, Littlefield has raised property taxes, increased water and sewer fees, laid off city employees and held off buying a new police car. Still, the city’s bond rating has tanked.

The village elders drinking coffee at the White Kitchen cafe are not happy about the way things have turned out.

“It was never voted on by the citizens of Littlefield; [it] is stuck in their craw,” says Carl Enloe, retired from Atmos Energy. “They have to pay for it. And the people who’s got it going are all up and gone and they left us … ”

“… Holdin’ the bag!” says Tommy Kelton, another Atmos retiree, completing the sentence.

The same thing has happened to communities across Texas. Once upon a time, it seems every small town wanted to be a prison town. But the 20-year private prison building boom is over.

And of course there was this about CCA, who runs the T. Don Hutto facility in Taylor.

Corrections Corporation of America, the nation’s largest private prison operator, says the demand for its facilities remains strong, particularly for federal immigration detainees.

Something we should be celebrating, fewer people in jail, which should be saving taxpayers money will instead cause taxpayers much pain because of a corporate scheme run on their local governments.

More here from the KUT/Texas Tribune, Texas Towns Suffer as Private Prisons Struggle.

It’s key to understand that none of these prisons were not approved by voters. As this piece informs us voters have to approve a bond unless it is shown to be an investment. And since the counties declared they could make money off the jail, a “public facilities corporation” was created, which allowed county elected officials to bypass voters and pass these corporate schemes without voter approval.

Privatization schemes never pay off as promised. It seems to be a lesson we have to keep learning over and over again.

Grits has more, comparing it to the S&L scandals of the ’80’s, just another bubble that has burst.
And again the corporations skate and the taxpayers are left to pay the price.

FWIW, I’ve opposed these crackpot deals ever since I first learned of them – years before the incarceration bubble finally burst and their fundamental flaws were exposed. The reason isn’t that I disdain private prisons per se but the inherent instability of the financing structure underlying these something-for-nothing deals. You see, I’ve heard all this rhetoric before.

If it’s sounds too good to be true……


More education cuts in Williamson County – RRISD to cut 280 employees

Posted in Education, Public Schools, Round Rock, Williamson County at 11:28 am by wcnews

Press release from the RRISD web site, District begins notifying employees of job loss. Excerpt below:

Round Rock ISD has begun the process of notifying contracted employees of their job status for the 2011-2012 school year. Due to the state budget deficit, Round Rock ISD is preparing for a $60 million reduction in state funding. Round Rock ISD Board of Trustees are committed to using $25 million from the district’s fund balance to help lessen the impact of the 2011-2012 budget deficit.


The district will notify approximately 280 probationary employees that their contract will be recommended for termination during a called board meeting in April:

  • 234 probationary classroom teachers (Includes employees who have daily contact with the same group of students, such as core-content, elective and certain special education teachers. Reductions obtained by adjusting the student-teacher ratio.)
  • 19 instructional support/enrichment positions (Includes employees who enhance or support the education of students, such as interventionists, dyslexia teachers, talented and gifted teachers and teachers that support special education students.)
  • 5 central office instructional support positions (Includes employees who work directly with teachers to enhance the instruction provided to students, such as instructional technology specialists and instructional coaches.)
  • 22 campus support positions (Includes employees who assist in the daily operation of campuses, such as counselors, nurses and assistant principals.)


The district has also identified approximately 70 central office and auxiliary employees who will be laid off; however, this number may increase as the district works through the budget process. It’s important to note, that unlike other districts, Round Rock ISD does not provide contracts to central office employees and they are considered at-will. Since these employees are not under contract the district will notify them at a later date, once the information has been finalized. The central office reductions cover all levels of employees, from assistant superintendent; director; coordinator; specialist; and many other hourly support staff, while impacting all departments and programs. We remain committed to cutting a higher percentage from areas outside of the general classroom

Just another day in Rick Perry’s “Texas Century”.

It’s time for the left to join the class war

Posted in Around The Nation, Around The State, Commentary at 9:03 am by wcnews

For too long in Texas and in our country we’ve been unwilling to talk about the elephant in the room. There has been a class war going on for 40+ years, the rich and corporations are overwhelmingly winning, and everyone else is losing. It mostly has to do with the disappearance of the left as a force in politics and policy in our country.  It’s what Chris Hedges termed in the title of this most recent book the Death of the Liberal Class. (Here’s an excerpt and an interview he did about the book).

In a traditional democracy, the liberal class functions as a safety valve. It makes piecemeal and incremental reform possible. It offers hope for change and proposes gradual steps toward greater equality. It endows the state and the mechanisms of power with virtue. It also serves as an attack dog that discredits radical social movements, making the liberal class a useful component within the power elite.

But the assault by the corporate state on the democratic state has claimed the liberal class as one of its victims. Corporate power forgot that the liberal class, when it functions, gives legitimacy to the power elite. And reducing the liberal class to courtiers or mandarins, who have nothing to offer but empty rhetoric, shuts off this safety valve and forces discontent to find other outlets that often end in violence. The inability of the liberal class to acknowledge that corporations have wrested power from the hands of citizens, that the Constitution and its guarantees of personal liberty have become irrelevant, and that the phrase consent of the governed is meaningless, has left it speaking and acting in ways that no longer correspond to reality. It has lent its voice to hollow acts of political theater, and the pretense that democratic debate and choice continue to exist.

Further deterioration is coming unless more Texans and Americans come to understand this. Without a strong left there is no force left to moderate or even reverse the policies of the extreme right.  Without it we wind up where we are now with the rich and corporations running wild and without a check on their power.

Articles related to this topic:

GOP attacking non-partisan experts, Texas First Foundation Responds To Attacks On Non-Partisan Legislative Board.

The budget experts at the LBB staff have a proven track record of reliability in their work over the years. For example, in 2006, the tax reform measures were accompanied by LBB reports which projected that those five bills would leave Texas with a budget shortfall of nearly $25 billion over the following years. Just like today, back in 2006 some politicians criticized the LBB’s analysis, indeed using some of the same arguments and rhetoric they are using now. But today, the facts show that the LBB staff reports and projections about the fiscal impact of 2006 tax reform bills were highly accurate.

Texas faces a $27 billion deficit, caused in part by the same tax bills the LBB warned about in 2006. If the Governor and Legislature had heeded LBB’s reports in 2006, part of the problems we face today might have been avoided. Today, instead of playing partisan politics and denying the facts once again, politicians in Austin should accept the truth and facts as reported by LBB staff — that Texas stands to lose hundreds of thousands of jobs if the Legislature passes a budget containing billions in cuts to public education, nursing home care, and other state programs — and use this information to make better policy. Texans cannot afford policy based on politicians burying their heads in the sand and ignoring the advice and guidance of their own experts.”

Texas has an extremely unfair tax system, in favor of the rich, Who Pays Texas Taxes.

The Comptroller’s newly released biennial study of the fairness of the Texas state and local tax system, Tax Exemptions and Tax Incidence, demonstrates conclusively that low-and moderate-income Texas families bear a disproportionate share of state and local taxes. We need a fairer system to fund public structures so we can improve and maintain Texas families’ quality of life.

G.E.’s Strategies Let It Avoid Taxes Altogether.

General Electric, the nation’s largest corporation, had a very good year in 2010.

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

This will not change until the left joins in the class war, we’ve been on the sidelines for far too long.

Texas Blog Round Up (March 28, 2011)

Posted in Around The State, Commentary at 8:48 am by wcnews

The Texas Progressive Alliance is ready for another sports-related tourist infusion as it brings you this week’s bloog roundup.

If the goal of the 81st Texas Legislature and Governor Rick Perry is to stifle job creation in Texas for the next two years, then Off the Kuff says they’re knocking it out of the park.

Letters From Texas rolls its collective eyes about the word games played by the Republicans in charge, as they announce their Senate subcommittee to find “non-tax revenue.” Earth to Republicans: if we used to own it, but now the government owns it, it’s a tax.

Musings looks ahead to 2021 when the Texas economy is in the ditch and many thousands of children have had a substandard education. Do we solve the problem now, or wait until we go to the ballot box in Nov. 2012?

Lightseeker tries to put the present battle into perspective with his posting at TexasKaos, Connecting the dots: Killing Education, Killing Unions, Funding the Tea Partiers [revised]. Give it a look. The videos are worth the price of admission by themselves!

WCNews at Eye On Williamson has this to say about the austerity budget that the House passed out of committee this week, House Appropriations passes budget – tea party blamed for cuts.

In the latest post regarding the poll he’s conducting on the mortgage interest tax deduction, PDiddie at Brains and Eggs explains why he has never owned a home.

CouldBeTrue of South Texas Chisme warns that republicans are near their goal of killing public education for k-12 and at the university level.

Neil at Texas Liberal apologized for ever having voted for Houston City Councilmember C.O. Bradford for any public office. Neil feels that voting for Mr. Bradford was one of the worst ballot box mistakes he has ever made.

refinish69 is ever amazed by the stupidity of the Texas Ledge. It is the gift that keeps on giving. Case in point is Rep. David Simpson’s Don’t Touch My Junk Bill.

This week, McBlogger takes a look at what austerity will do to Texas.


GOP austerity plan will be bad for Texas

Posted in Around The State, Bad Government Republicans, Commentary, Right Wing Lies, Taxes, The Budget, The Economy at 10:17 am by wcnews

Taxes will go up on Texans, Some small businesses could lose tax break, legislator says.  The only two questions left to be answered are, on who and by how much? The likely answers, as long as the GOP is in charge, are poor and working Texans and by more then they can afford.  This is sad, especially in a time when we should be having an open and honest debate about how to fund our state government.  If education, health and public safety are our biggest priorities then why are they on the chopping block?

The debate is being narrowly defined, with tax increases on Texans who can actually afford them, being left out of the discussion completely.  Is it fair for the budget to be balanced by only making working and middle class Texans bear the pain?  That is the question that needs to be asked over and over until is is answered.

Yesterday we learned the austerity plan of the Texas House will cost many more working Texans their jobs.  As outlined in the previous post, it should not shock anyone since that’s the course we’ve been on in this country for decades now.  And it is in direct conflict with the current Republican/conservative/tea party unwavering ideology, which is wrong.

After the release of the LBB report House Speaker Joe Straus (R-San Antonio) released this statement, which contains at least two of Reich’s GOP lies:

“Jobs are created when government is efficient and responsible and allows the private sector to flourish.”

“I question the validity of the assumption that requiring government to live within its means will lead to a downturn in the economy – in fact, the opposite is true. The best way to jump-start growth is for the Legislature to keep taxes low and regulations reasonable to provide the opportunity for business to grow and thrive in Texas.”

“Cutting spending to make government live within its means is the fiscally responsible course of action and one that will keep Texas on track for job growth over the long-term.”

It’s hard to understand how Straus doesn’t understand that laying off thousands, if not hundreds of thousands of state employees, will cause a ripple effect through the state’s economy. Those who lose their jobs will have less money to spend, therefore causing more jobs loss. It’s pretty basic economics. But that’s likely the main reason the House budget is an austerity plan, the GOP no longer understands basic economics. And to see how that will turn out just read Paul Krugman’s column today, The Austerity Delusion.

Self-styled deficit hawks have been crying wolf over U.S. interest rates more or less continuously since the financial crisis began to ease, taking every uptick in rates as a sign that markets were turning on America. But the truth is that rates have fluctuated, not with debt fears, but with rising and falling hope for economic recovery. And with full recovery still seeming very distant, rates are lower now than they were two years ago.

But couldn’t America still end up like Greece? Yes, of course. If investors decide that we’re a banana republic whose politicians can’t or won’t come to grips with long-term problems, they will indeed stop buying our debt. But that’s not a prospect that hinges, one way or another, on whether we punish ourselves with short-run spending cuts.

Just ask the Irish, whose government — having taken on an unsustainable debt burden by trying to bail out runaway banks — tried to reassure markets by imposing savage austerity measures on ordinary citizens. The same people urging spending cuts on America cheered. “Ireland offers an admirable lesson in fiscal responsibility,” declared Alan Reynolds of the Cato Institute, who said that the spending cuts had removed fears over Irish solvency and predicted rapid economic recovery.

That was in June 2009. Since then, the interest rate on Irish debt has doubled; Ireland’s unemployment rate now stands at 13.5 percent.

And then there’s the British experience. Like America, Britain is still perceived as solvent by financial markets, giving it room to pursue a strategy of jobs first, deficits later. But the government of Prime Minister David Cameron chose instead to move to immediate, unforced austerity, in the belief that private spending would more than make up for the government’s pullback. As I like to put it, the Cameron plan was based on belief that the confidence fairy would make everything all right.

But she hasn’t: British growth has stalled, and the government has marked up its deficit projections as a result.

Which brings me back to what passes for budget debate in Washington these days.

A serious fiscal plan for America would address the long-run drivers of spending, above all health care costs, and it would almost certainly include some kind of tax increase. But we’re not serious: any talk of using Medicare funds effectively is met with shrieks of “death panels,” and the official G.O.P. position — barely challenged by Democrats — appears to be that nobody should ever pay higher taxes. Instead, all the talk is about short-run spending cuts.

In short, we have a political climate in which self-styled deficit hawks want to punish the unemployed even as they oppose any action that would address our long-run budget problems. And here’s what we know from experience abroad: The confidence fairy won’t save us from the consequences of our folly.

To read more wing nuts hyperventilating over the LBB report written by non-partisan experts click here.

Also this statement from F. Scott McCown of the CPPP, an excerpt:

“The Texas House of Representatives should reject HB 1. Testimony before the Appropriations Committee establishes the damage the proposed budget for 2012-13 would do to Texans seeking an education and to children, the elderly, and those with disabilities who rely upon health and human services. Now we also have an analysis from the Legislative Budget Board (LBB) that establishes the damage the proposed budget would do to our economy.”

And this article from The Economist on the Texas economy, The Texas budget, A blow to the model.

Still, there is something troubling about the picture. Exports, commodities, and jobs lured from other places can only take you so far. For Texas to thrive, it must be capable of fostering talent and innovation, not simply importing it. The state and its cities have nurtured some industries, such as wind and solar, cybersecurity, and technology. Josh Williams, the head of Gowalla, a social-networking service set up in 2009, says that Austin was fertile ground for the business, partly because of the presence of the University of Texas and the low cost of living. But encouraging home-grown success in the future will require that Texas invest adequate resources in its human capital. And those resources are, at the moment, in short supply.

Texas will be able to close its budget gap this year only through brutal cuts, now being negotiated. The recommendations from the Legislative Budget Board, which advises the state legislature on appropriations, portend a difficult few years, especially for sick people, old people, and students. The suggested cuts to the primary programme that funds school districts, for example, would put the state $9.3 billion below the amount required by its own education code. If there is any correlation between state spending on public education and the performance of its schools, those are cuts Texas can ill afford.

Well if taxes won’t be raised on the wealthy, then that’s all we can afford. And The Show goes on.

Texas will hemorrhage jobs if House GOP budget passes

Posted in Around The State, Commentary, Right Wing Lies, Taxes, The Economy at 6:00 am by wcnews

It’s impossible to understand how putting hundreds of thousands of Texans on the unemployment line is going to be good for the economy in Texas.  Yet that is exactly what the Texas Republican’s plan is thus far, LBB Estimates State Budget Would Eliminate 335,000 Jobs in 2013.

The Legislative Budget Board (LBB) predicts that the state budget approved yesterday by the House Appropriations Committee would result in 272,000 fewer jobs in Texas in 2012 and 335,000 fewer in 2013. The LBB predicts that the budget would eliminate 117,000 private sector jobs in 2012 and 146,000 in 2013.

Too many of us have been fed Republican lies on the economy, for too long, and have come to belive them. Here’s four GOP lies on the economy, The Republicans’ Big Lies About Jobs.

  • Cutting taxes on the rich creates jobs.
    Nope. Trickle-down economics has been tried for thirty years and hasn’t worked.
  • Cutting corporate income taxes creates jobs.
    Baloney. American corporations don’t need tax cuts. They’re sitting on over $1.5 trillion of cash right now
  • Cuts in wages and benefits create jobs.
    Meager wages and benefits are reducing the spending power of tens of millions of American workers, which is prolonging the jobs recession.
  • Regulations kill jobs.
    Congressional Republicans are using this whopper to justify their attempts to defund regulatory agencies. Regulations whose costs to business exceed their benefits to the public are unwarranted, of course, but reasonable regulation is necessary to avoid everything from nuclear meltdowns to oil spills to mine disasters to food contamination – all of which we’ve sadly witnessed.

It’s pretty simple really, and it isn’t rocket science. The last time we saw massive job creation in this country was after the last time taxes were raised on the rich (Clinton’s first term).  We’re unlikely to get out of the economic funk we’re in until that is done, coupled with massive infrastructure spending to put people back to work. But Democrats are falling down, and by and large, won’t speak to the issue of raising taxes on the rich. More from Reich.

House Majority Leader Eric Cantor was in town yesterday (specifically, at Stanford’s Hoover Institute where he could surround himself with sympathetic Republicans) to tell this whopper: “Cutting the federal deficit will create jobs.”

It’s not true. Cutting the deficit will create fewer jobs. Less government spending reduces overall demand. This is particularly worrisome when, as now, consumers and businesses are still holding back. Fewer government workers have paychecks to buy stuff from other Americans, some of whom in turn will lose their jobs without enough customers.

But truth doesn’t seem to matter. Republicans figure if their big lies are repeated often enough, people will start to believe them.

Unless, that is, those big lies are repudiated – and big truths are told in their place.

We’ve been decreasing taxes on the rich for 40+ years and look where it has gotten us. It’s time we learned, or relearned economics, and get back to what works.

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