Your pay and pensions are not the problem E-mail
Written by Cynthia Brown   

“A funny thing happened on the road to collapse: it turned out that the main culprit in the electricity crisis was deregulation, which opened the door for ruthless market manipulation. When the market manipulation went away, so did the blackouts. Undeterred, a few years later conservatives found another line of attack. This time they said that liberal big spending and overpaid public employees were bringing on collapse." - Paul Krugman

During the past several years, the state of California has faced a severe fiscal crunch. When the national housing bubble burst California was among a handful of states that was especially hard hit. The plunge in home prices, and the subsequent led to a drastic reduction in tax revenue.

But the folks who are determined to privatize (ie take over) all public sector jobs, along with those employees’ collective bargaining rights and middle class pay checks and pensions, blamed the economic downturn on burgeoning pension obligations and salaries earned by law enforcement officers, firefighters, teachers and other people working for our states, cities, counties and towns.

Unemployment in California is still high, but the good news is that it is coming down. Also for the first time in a long time there is a projected budget surplus, in part because the Democrats in the state legislature had enough power to push through some desperately needed tax increases.

Some pundits are screaming that the tax hikes that have closed the budget gap and stemming the layoffs of the state’s law enforcement officers, will cause businesses to leave the state. But it turns out there is no evidence that higher taxes cause wealthy people or businesses to move to another state.

So despite the still unacceptable levels of Califonia, the hight costs of housing, and the recent cuts to the state’s public education system, things are betting better thanks to more tax revenue that can finance things like state aid to cities and towns and spending on much needed infrastructure projects.

California usually leads the nation in all sorts of trends so let’s hope this little bit of good news will be replicated around the country.


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