I hope you all had a nice Thanksgiving week. We went over to one of our friends here in Norman and ate very well while enjoying lively and thoughtful conversations--ranging from the OU Football program to the nature of American power since the 1950s. Not bad.
One thing that came up in our pre-turkey conversations was the changing role that Americans have decided for government investment. I am starting to see the world we live in as "Reagan's world" or the world of tax "cuts" and deregulation. I would say the world of small government, but that is increasingly clearly as mythical as some kind of pure communist state. Just doesn't happen. Not where you have a complex and large economy. My conservative friends cling to the myth of the small government, just as they cling to the myth that cutting taxes on the rich magically helps out the poor.
Paul Krugman may have not originated this term, but he refers to those tax "cuts" as actually being tax "shifts," meaning of course that the burden of that tax simply went elsewhere. Perhaps to a state or local tax. Perhaps to property taxes, or more likely into regressive fees and licenses. Or, in the case of universities, in increased tuition and fees.
Take my university. My chair told me that in 1980, state appropriations made up 40% of our operating budget. That is now down to 18%. Meanwhile, our dedication to science has also decreased and my scientist friends tell me that getting those national science grants is harder than it was. Little truth of those universities, is that those lucrative grants then get spilled over into the less expensive departments where research is an issue of travel and photo-copies, rather than labs and equipment.
Where do universities make up that shortfall? They do it, of course, in a couple of ways--they raise tuition and fees. Fees, after all, are the hidden costs for most students. Second, universities increase their fund raising to wealthy donors and alums. They promise to name buildings after prominent families instead of prominent scholars--leaving our campus with a journalism school named after the family that has produced some of the worst journalism in the country.
And there is the rub. That system works ok when the economy is booming. Wealthy people have a lot of extra money, foundations and endowments are growing, and tuition increases are both smaller and less noticeable. But when the economy turns down, a rather large part of the University's budget goes down with it, making a state "funded" university as prone to the boom and bust cycle as any farmer--actually more so.
I really wonder if my conservative friends will find that their tax cut from Republican politicians comes even close to covering the cost of their increased tuition.
Yglesias points to another example of this tax shift. When the economy goes down, state and local budgets are hurt at a greater level than the large fed. Of course, since we have cut taxes and reduced our dedication to supporting state services, those services often end up being cut at the time when people need them most. And in this case, more and more kids are relying on their local school lunchroom for their food source.
Think about that the next time you hear a Republican bleating about cutting taxes. Those taxes don't just go to programs you don't like. They go to feed people who are hungry. They go to help unemployed attend college to retrain. They go to help research new technologies that fuel the economy.
3 comments:
If you cut taxes without cutting spending, then that money has to come from somewhere. We are seeing that in Michigan, as there have been some serious budget problems. We have had to make major cuts in a variety of programs. Some Republicans are furious at the cuts being made to the prison system and are saying that public safety will suffer. Where do they think that money will come from if taxes can't be raised?
I tend to favor lower taxes, but not at the expense of needed programs and expenditures. I would prefer that officials take a careful look as to how money is spent and see if services can be delivered in a more efficient way. I also think we should look at programs and seeing if they are doing what they are supposed to be doing.
The problem is that most people/voters don't want to do this kind of analysis. They prefer slogans, bumper stickers, and rhetoric. IMO, the candidate in the last election that had the most detailed ideas was John Edwards. His affair ultimately cost him any hope of the nomination, though I don't how much of a chance he would have had.
I think some Republicans are fine with cutting taxes because they think most welfare programs are a waste of money. Maybe they just believe the recipients of those benefits will just go and get jobs or help from some private charitable group. I don't know.
I think you are correct, Steve. The most interesting thing here is that Republicans seem to have successfully convinced the American people that they don't benefit from any government services, instead that those programs go to undeserving poor and immigrants. It is an amazing con game, if you ask me, and one that has essentially convinced people to vote against their own economic self-interest.
I think it mostly boils down to people wanting to pick and choose what gov't services they want. They don't want welfare, but they would support more funding for military actions.
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