In “Bonddad” Stewart’s roundup of the first quarter GDP numbers at 538, this chart stood out:
Amidst some decent news about economic growth, state spending is way down. Even though stimulus is evil socialism, it looks like another round targeting states would have been a good idea, as some DFHs have been saying all along.
State Spending Recession
In “Bonddad” Stewart’s roundup of the first quarter GDP numbers at 538, this chart stood out:
You have the PCEC96 graph there, not the SLCEC96.
Here’s a link to Fred2, which is the source of the graphs.
ETA: Fixed before even commented.
Shriek! Deficit! Entitlements! Lazy people should starve! Fuck those highly paid elitist teachers! Shriek!
And for a little on how this impacts people in the real world, as opposed to the Village, the PA Higher Education Assistance Agency (PHEAA) has announced that the maximum PA State Grant for higher education will be $1000 less than last year due to lack of funding. So those deadbeat poor and working class kids can go fuck themselves for being losers for not being born to wealthy, god fearing, productive members of society.
I don’t know if this is possible any place besides my head, but why can’t the governors of states that want the stimulus money so badly be forced to submit long term plans to cut spending? If there’s a lot of inefficient spending in New York or California, is it that hard for the state to say that they are going to eliminate this or that over the course of ten years as a condition to getting more money?
Something like this appears to be part of the plan circulated by Brad DeLong about a year ago. He also proposed allowing them to run their own fiscal expansions.
electing 70 Dem Senators would’ve been an even better idea.
How much is the total amount of funding devoted to what you are talking about? Probably far less than $1 billion, right?
Perfect timing, first day of the month is my pension payday. Illinois came through again.
Yes, everyone knows more money would be awesome. But no one has a plan for getting the votes necessary.
Definitely not ever funded in the billions.
In 2009-10, the appropriation was $407,413,000; in 2010-11, it is $403,632,000. That’s a 1% decrease, but it hits people really hard, especially with the cut in funding for state colleges and universities, which means a tuition increase higher than what was expected. And for some perspective on this, my university is what is called here “state-related.” It means we are a public university, but not a part of the state-owned university system. Since I have been here (starting in 1998), we have gone from 14% of our funding coming from the state to less than 6%.
So poor and working class students will pay more to get an education because the state provides less funding for the institutions and, at the same time, will get less help from the state to help cover the tuition increase the funding cut requires.
Catch-22 for those kids.
As geg6’s comments suggest, I think it’s important to see where the cuts are coming from.
The range on the y-axis of the plot shows about a 1.5% decrease from the peak. That doesn’t sound like a lot, but it probably makes a big difference depending on where the cuts are.
Well, yes, but my point was that it’s a big sum for us but a smaller sum for the state government and a pittance for the federal government. The fact that we are having so many problems funding higher education while handing out subsidies to corporations is appalling on a number of levels.
We have no choice but to make poor and working people suffer in order to pay off treasury bonds etc. with higher interest rates, because our #1 priority has to be the battle with inflation, which there’s none of currently and there’s none predicted and we seem to be still risking deflation, because only GOLD will let us survive and also SHUT UP.
Let the republican goveners and congress-vermin publically request federal aid before it is even considered. I’m sick of how little positive press was given to the first stimulus, including sizable tax cuts for the middle class, yet became a huge focus of misinformation for wingers. I’m sick of those same republicans who derided and castigated the stimulus later staging photo ops with oversized checks boasting of recovery funds to their districts.
Let them cry for federal aid like govener Jindal who has suddenly discovered a role for federal intervention. No more political fodder for the right to whine about the deficit and our grandchildren’s future. Let them come hats in hand this time.
Keynesian econ is so 1930’s
I’m an auditor working for a cpa firm, and I specialize in audits of state and local governments, so I follow the news on government spending pretty closely here in Illinois.
It’s bad right now. The cuts are coming in deep and hard. The State is flat broke, the deficit is deeper than one can comprehend, and the Legislature lacks the political will to raise taxes.
It’s not like we’re California – the Lege could raise the income tax by a point or 2 without any trouble. All Democratic control, no need for supermajority votes. The Governor (Quinn) came out in favor of an increase pretty much from the day he was sworn in. The Speaker of the Illinois House (and the State Party Boss – Mike Madigan) refused to play along, even though he had (what I thought) was a perfect opportunity – he could have let the raise go through, then had his daughter primary Quinn (the odds were, prior to the actual start of the primary season- which ended in February – that Lisa Madigan was going to run for Governor and trounce any and all opposition). Quinn would have been happy to sign the income tax hike, then he would have been sacrificed and could have gone back to his old job as a rabble rouser and consumer advocate. Democrats running for re-election could have put all the blame on Quinn for the tax hike, and candidates could have made all sorts of promises to reverse the tax hike – much of the deficit situation is temporary – years of underfunding state pensions under George Ryan and Rod Blagojevich has left us in a huge hole. Fill that hole, and much of the tax hike could have been reversed. Couple that with a dream of Illinois progressives – a constitutional amendment to allow a graduated income tax, and damage control could have been accomplished pretty easy.
Instead, Mike Madigan refused to play ball, and we have Quinn running a very stupid re-election campaign against a Republican Tea-bagger type who won’t propose any legitimate policies to balance the State budget, except to “cut waste and fraud” and “reduce spending” – the hole is to deep and the State has cut so much (State government spending, per capita, in Illinois is amongst the lowest in the nation. State employees per capita is amongst the very lowest in the nation. Cutting “waste and fraud” ain’t gonna work).
So, the State is slashing remittances to local governments, especially school districts. Which are funded by State Government monies and local property taxes (and, with the bad economy, property tax receipts are hurtin’). So the State is slashing employment, school districts are laying off huge numbers of teachers (In Chicago, they’re talking about class sizes as high as THIRTY FIVE). State Universities have effectively been privatized.
It’s bad out there. The ARRA money staved off a lot off the pain, but it’s a-comin’ now. The double-dip recession’s a-coming.
Unless the federal government steps up or WWIII breaks out, 2011 is going to be a horrible economic year.
@thomas: There are no lessons to be learned from the 1930s, because it was a long time ago, and the best times ever were under the McKinley administration and we should be like that, only more so.
@El Cid: Totally. Rock on, dude.
Senator Harkin is working to get $23 billion to the states to keep teachers employed. His plan has been to attach this as an amendment to the supplemental spending bill. It passed the House in December.
Look at the Y-axis. The graph scales from 1520 to 1550, or about 2%.
While I agree (on the authority of Galbraith and Krugman, along with my rudimentary understanding of macroeconomics) that government spending should be high when unemployment is, and that this trend is a Bad News Bear, it’s not nearly as disasterous as the curve makes it appear.
Did any of you see PBS’s piece on the CCC of the 1930s last night? It was so inspiring, and at the same time so totally depressing, to see what a strong leader and willing nation can do in the midst of a catastrophe, back when we were a can-do nation instead of the no-can-do nation we are today.
And to everyone who says Obama can’t do anything about this godawful mess we’re in on so many fronts, go take a look at the show and see what FDR did, in a climate facing the exact same screeching and wailing from the rightwing that we hear today about sosha-lizm and facizm and comma-nizm and deficits. But he got it done.
He put 3 million young men of all races to work in 6 months, basically creating the infrastructure we’re still relying on today, and at the same time pulling those millions and many more out of a grinding depression.
Goddammit it, made me so mad that we can’t seem to do that today. We are a nation of complete losers, and I’m sorry to say we deserve every bit of what’s happening to us, from the financial meltdown, to the never-ending wars that eat up a trillion dollars, to lack of health care, to crumbling infrastructure and a poisoned Gulf.
Our congress sucks, our president sucks, and we suck.
Thank you El Cid. I understand much better now.
In California, it would be virtually impossible. A key part of California’s problem is that our elected officials hands are tied by Constitutional amendments that mandate specific spending, so the amount of the state budget that they actually have some control over is small. We can’t have a fiscally sane government without a major revision to our State Constitution.
I like to imagine that if I was ever in a position like Quinn, I’d be more than happy to take one for the team.
I agree. There’s a certain time lag when it comes to these things, or so they say, but we said the same thing last year. Here we are, a year later, and while things might be getting better, they certainly aren’t getting better fast enough. So even if we can’t speed things up, we should be doing more, because it’s not like the economy will be back up to speed in three years anyway.
State spending has fallen off a cliff throughout all 50 states, and it’s getting worse as time passes. At least five states are already disintegrating and falling into economic and social black holes — Michigan, Missouri, Nevada, Louisiana, California — and the rest are rapidly losing ground.
With Michigan and Nevada the now-eternal sky-high gasoline prices have destroyed their basic economies; in Michigan, with the end of the Happy Motoring lifestyle the auto industry is going away, while in Nevada the end of cheap gas means no more tourists taking a spin to the casinos on the weekends. Louisiana has gotten clobbered by Katrina and now the oil gusher destroying their coastline and fisheries adds the final death blow. Missouri disintegrated with the collapse of the rust belt and California has long-term structural problems due to outsourcing and its freeway car culture.
Someone above naively asked:
like I said above, mclaren — we deserve every fucking bit of the misery we’ve brought on ourselves by allowing 30+ years of right wing conservative Republican rule, along with their feckless, spineless co-conspirators, the Democrats we’ve elected from time to time.
And it looks like we’re going to get it.
@Thunderlizard: Indeed – it is a highly misleading graph. I make it to be a drop of 1.6%. Does 1.6% = way down?
I don’t get this thing about sky-high gas prices. Americans have among the lowest gas prices in the world.
I was basing that comment off of the claim that we shouldn’t bail out the states because of the long term spending problems they have. It’s well acknowledged that the root of the temporary problem is a cyclical downturn in the economy that was beyond each state’s control, but even when that is considered, some feel that the long term problems they have mean they shouldn’t be helped right now.
It ain’t necessarily so. Bailing out states, in some cases, is more like bailing out bad banks (one exception is supplements to state unemployment insurance programs). It props up failure, but does not necessarily do anything to stimulate the economy, which is supposedly the ultimate goal of various stimulus proposals.
I’m not even sure that GDP figures give the best progress report on the state of the economy. GDP figures tend to be used because they allow economists to compare countries (with some adjustments). But far more telling would be unemployment and wage figures. If unemployment persists and wage growth is stagnant, then rising (or falling) GDP numbers don’t tell you very much.
And where the DFHs continue to stumble is in their persistently wrongheaded belief that it doesn’t matter where money comes from — government or economic productivity — as long as people have money to spend.
Michigan is dying because the core automobile and related industries that the state depended on are dying and people don’t have jobs. Nevada is being hit for a related reason — people without jobs don’t have the extra disposable income to throw away in Vegas. Competition comes into play as well, since Californians with spare cash have no problem driving to Indian casinos (and Vegas always depended on California tourism dollars). And you can more easily just gamble for the day without getting a hotel room, saving more money.
This oversimplifies a complex issue. Many illegal immigrants had moved from agriculture to construction, where they are relatively well paid. And illegal immigrants are deeply embedded into all facets of the California economy, from hotel and janitorial services to the food industry.
It ain’t just cops and firefighters. It’s an entire range of city, county, and state workers, including teachers.
Another oversimplification. California, especially Southern California, doesn’t have much in the way of its own water, depending on other areas and states for its supply. Global warming in the long term may be an issue, but there are other issues at play, including the fact that Southern California is sustained by technology and human will fighting against nature.
You’re making things up here. Health Care reform changes are minimal for 2010 and are largely irrelevant to current state budget problems.
Not so. Let’s take a look at the evidence:
Source: Indianapolis Courier Press, 13 May 2010
This is typical of the individual states, with some (California, Arizona and New Mexico) getting hit much worse than most other states because of the large number of illegal immigrants who will get immediate Medicare coverage under the HCR bill. All states will see Medicare costs skyrocket.
For evidence that the HCR “reform” bill does not control costs and actually increases current health care costs for typical middle class families, see this link. Yes, this link contains detailed facts about the bill pointed out by Jane Hamsher, and yes, we all know that the kooks and cranks and crackpots on this forum hate Jane Hamsher, so when Hamsher points out that a circle is round, you’ll all scream that she’s wrong. Wake up, crackpots: facts remain facts even when people you don’t like cite ’em.
In fact, brachiator, you clearly and obviously don’t know what’s in the HCR bill passed by congress.
Got that, brachiator? The state high-risk pools are a temporary bridge to get states to 2014, when most of the HCR legislation kicks in. However, because the state high-risk pools kick in now and only 5 billion dollars has been allotted to fund it,Medicare economists estimate that the high-risk pools will run through all their funding and exhaust that fund by 2011 — leaving the individual states to foot the bill for the high-risk pools between 2011 and 2014.
Source: Existing High Risk Pools Could Lock Some More Expensive Health Care Coverage.
You really want to have some idea of what you’re talking about, brachiator, before you accuse other people of “making stuff up” when they’re stating the documented facts.
The high-risk pools are so underfunded that they amount to an unfunded mandate — a gigantic unfunded mandate on all the states, imposed by the recent HCR bill, which will cause all the states to bleed even more red ink than they already are. The people in the high-risk pool (whch goes into force immediately, today, right now, precisely becaue it is a bridge program to fill in between today and 2014) are
some of the sickest people in America — thus their medical expenses are by far the highest of any group in the U.S. health care delivery system. These people with sky-high health care costs are the ones the HCR bill requires states to cover immediately, and that’s why the 5 billion set aside for the high-risk pool will get exhausted almost immediately and run out by 2011, leaving the states in a deep deep hole of red ink that they’ll have to pay for at the very time when the state budgets around the country are falling into deficit black holes.
This is what happens when health care lobbyists write the health care “reform” legislation and democrats cave in to the corporate sharks. Essentially, this is all a cheap accounting trick designed to make it seem as though 15 million uninsured people are getting health care by dumping ’em into the state high-risk pool…but in actual fact, since the high-risk pool will run out by 2011 and the states are already broke, those 15 million uninsurable people will wind up getting thrown onto the street with no health care at all, because the states can’t even afford to keep their state offices open and can’t even afford to pay for electricity or garbage collection in many areas.
Recently the governor of Nevada made an emegency address because the fiscal crisis was so severe that many state offices couldn’t afford to keep their electricity on. California continues to spiral downward, mandating furloughs for state employees and shutting down the state MediCal program. Michigan has declared an ongoing state of fiscal emegency…and so on.
Google “Recession continues to batter state budgets” by Elizabeth McNichol and Nicholas Johnson.
Of course, brachiator will continue to deny these documented facts because (like the global warming deniers) that’s what people typically do in today’s political discourse when they encounter facts they don’t like. So let’s hammer the reality home with this article by the New York Times:
Source: “Some States Find Burdens in Health Law” by Michael Luo, New York Times, 26 march 2010.
Medicare economists are not “making things up,” brachiator. The New York Times is not “making things up.” The governors of Louisiana and Indiana and California and Arizona are not “making things up.”