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Washington DC or Bust

Apr 26, 2010 | By: Mr_Blue | Comments | Permalink | Tags: deficit hawks, budget deficit, teach-in, fiscal sustainability

I am leaving tomorrow for the Fiscal Sustainability Teach-in that is being held in Washington DC. The purpose of this ‘counter-conference’ is to deliver an alternative message related to budget deficit and fiscal sustainability. One that is quite different from the deficit hawks and those who want to privatize social security. It’s time that we take back our government’s fiscal policy (tax and spending policies) and make it work for more Americans instead of just those at the top.

Far too long fiscal policy has favored top income people and corporations. Huge tax cuts have been directed to top income brackets and huge corporate subsidies and no-bid contracts have been given to corporations. And what about the rest of us - crumbs or worse - spending cuts in government programs that help working class families. Check this out:

Source: Balloon Juice

This above graph are the top tax rates since 1920. Notice the drop off starting in 1980s. Now, check out this graph:

Source: Center on Budget and Policy Priorities

Top 1% of income share certainly grew with the drop in top tax rates. It certainly looks like tax policy has helped with income inequality. But it’s not just taxes. Cuts in government spending has had a greater impact on working class families than Top 1%. First, because of cuts to programs that help working class families. Second, and which is often overlooked, this is the truly trickle down effect - federal government cuts spending or program that is needed or used by states and municipalities. States and municipalities are faced with a choice - either cut program or increase spending to cover lost money from federal government - this usually means an increase in local taxes - property tax, sales tax or local income tax. Most local taxes such property tax and sales tax are very regressive.

Now that there is an opportunity to change fiscal policy to work for more Americans and possibly narrow the income gap we hear more chatter from the deficit hawks. Most deficit hawks don’t want fiscal policy to be used to narrow the huge income gap - they prefer to maintain the status quo - “I got mine and to hell with everyone else’. The organizers of the Fiscal Sustainability Teach-in are trying to counter the deficit hawks’ noise machine. The purpose of this ‘counter-conference’ is to provide an alternative description of fiscal sustainability and to describe how our fiscal and monetary system really work. Again, knowledge is power.

Good luck.