Ultra-Red-State Kansas, the poster child for cutting taxes sharply in line with austerity recommendations of the American Legislative Exchange Council, or ALEC, has implemented its calls for deep tax cuts and limits on revenues and spending which reflect extreme “supply side” and anti-tax arguments that mainstream economic research discredited long ago, the Center on Budget and Policy Priorities explains here.
Apparently it’s just too darn hard for Republicans to look across the ocean and see what damage austerity has wrought on Europe in this time of economic malaise (except for Wall St. of course). I have emphasized in many previous posts (Europe’s Perfect Economic Storm December 16, 2011, http://progresshg.com/2011/12/16/europes-perfect-economic-storm/ , Austerity: The Real Euro Crisis Begins in SpainMay 31, 2012, http://progresshg.com/2012/05/31/austerity-crisis-spain/,Robin Hood: Europe Walks the Walk While the U.S. and Britain Just TalkOctober 13, 2013, http://progresshg.com/2012/10/13/robin-hood-europe-walks-the-walk-while-us-just-talks/, etc., etc.) the severity of the cognitive dissonance among Republican voters ignoring the blatant and severe failure of European austerity during the current economic down cycle.
Now, there is proof within our domestic borders just how badly U.S. austerity is damaging our own recovery. Republican governors and state legislatures have let ideology trump sound policy in primary areas like taxes, unemployment insurance and health care. Now, the results of those poor decisions are becoming too obvious for even Republican voters to ignore.
“Democratic challenger Paul Davis sought Tuesday to give his campaign for Kansas governor a bipartisan boost by announcing endorsements from more than 100 moderate Republicans who’ve split with conservative GOP Gov. Sam Brownback over education and tax policy.
The disaffected Republicans include outgoing Insurance Commissioner Sandy Praeger, three former Kansas Senate presidents and three former Kansas House speakers. More than half are former legislators, and the list includes former U.S. Rep. Jan Meyers, who represented the Kansas City-area 3rd District from 1985 to 1997.
They announced that they formed Republicans for Kansas Values because of their concerns about the aggressive personal income tax cuts enacted at Brownback’s urging. They called the reductions a reckless fiscal experiment and suggested Brownback’s administration has been hostile to public education.”, according to the Associated Press just this morning.
Those ALEC policies have been an unmitigated budgetary disaster for Kansas. So much so, the CBPP’s Nick Johnson reports, “that leaders in Oklahoma, Nebraska, and other states are expressing concern about the Kansas results and distancing themselves — at least rhetorically — from the Kansas failures
So just how badly is Kansas performing under these austerity measures? State revenues have naturally plummeted, employment growth continues to badly lag the national average, and the state’s once pristine credit rating has been downgraded. Kansas’ tax cuts this year are costing the state about 8 percent of the revenue it uses to fund schools, health care and other public services, a blow equivalent to a mid-sized recession, according to this CBPP report. The revenue loss, state data show, will rise to 16 percent in five years if Kansas doesn’t reverse the tax cuts immediately. And yet, Kansans continue to blindly follow their red state pied pipers right off of the proverbial cliff.
While most states are restoring school funding after years of significant cuts due to the recession, Kansas continues to cut. Funding for colleges and universities, libraries, local health departments and other services, which also were cut sharply, continues to fall.
The largest tax cuts went to those at the top, and Kansas actually raised taxes on the lowest-income families. Nothing in the Kansas economy’s subpar performance since these tax cuts were enacted suggests the benefits have “trickled down” to ordinary Kansans.
Kansas also reduced regular state unemployment insurance benefits, but North Carolina, under Republican Governor Pat McCrory whose popularity ratings are: negative approval rating of 39% approval and 45% disapproval and has turned North Carolina into the poster child for cutting the unemployment programs by red states. It cut not only the maximum number of weeks of benefits but also the benefit level. That rendered North Carolina ineligible for federal emergency benefits starting in July 2013, six months before federal lawmakers let the entire federal program expire.
North Carolina lawmakers argue that by cutting jobless benefits, they generated a sharp decline in unemployment. Economists, however, emphasize that there is actually a continued slide in the labor force participation rate (the share of North Carolinians working or looking for work), suggesting that many people who lost benefits simply stopped looking for work. In fact, a careful statistical comparison of labor market trends in North Carolina and neighboring South Carolina and Virginia “does not appear to support … findings of large effects from changes in [unemployment] benefits” — other than, of course, the gratuitous hit on workers struggling to find a job and their families.
Finally, both North Carolina and Kansas are among the 24 states that have chosen not to expand Medicaid coverage under the Affordable Care Act — even though the federal government will pick up nearly all of the costs (100 percent for the first three years, phasing down to 90 percent in 2020 and all subsequent years). The health care law’s Medicaid expansions were intended to fill historical gaps in Medicaid eligibility for low-income adults. These states’ refusal to take the expansions leaves a coverage gap for 4.8 million uninsured adults. It also is a bad deal for the states’ health insurers.
All told, these states have enacted measures that deliver no observable economic or budget benefits (except to the wealthy Republican donors) while making it harder for struggling families to get ahead….once again lending hard evidence to the premise that austerity, during times of little or no economic growth exponentially exacerbate the ill-effects of recessions.
Austerity, or the practice of reducing government spending and reducing tax rates, is effective during periods of growth, not contraction.
Republican voters…your “moral, conservative stand” will be the very instrument of your own economic demise, as democracy gives way to governing of the rich, by the rich, and for the rich…which most of you are not. Wake up before you end up like Kansas!