During the Vietnam War, a U.S. soldier seems to have anticipated the
spirit of the current economic policy, explaining: "we had to destroy
the village in order to save it." The difference today is that while the
government destroys villages of the working classes, it is devoting
enormous to improve the castles of the rich.
Anyone can see the care and feeding of bankers and financiers, while
treating much of the rest of the economy with an iron fist.
The problem is compounded because alongside the federal stimulus,
funding for state and local government is falling off the cliff, in
effect, neutralizing much of the stimulus. This contradiction in
economic policy is nothing new. A half century ago, E. Cary Brown showed
him austerity in state and local governments undid much of the New Deal.
Brown, E. Cary. 1956. "Fiscal Policy in the 'Thirties: A Reappraisal."
The American Economic Review, Vol. 46, no. 5 (December): pp. 863-66.
Nowhere is that policy divergence clearer than in California. A
Republican minority blocks all tax increases. The budget deficit seems
to increase by a few billions every few weeks. The answer is to
eliminate welfare, slash payment to home healthcare workers, and
decimate education.
I have been looking at papers by Greg Duncan showing the devastating
effect of child poverty on children's productive capacity as they
mature. In my forthcoming book, The Invisible Handcuffs, I discuss
literature that compares the consequences of child poverty on brain
development, an effect that resembles the impact of a stroke.
Conservatives worry about future tax costs, but what if the losses in
the capacity to pay costs exceeds the presumed future burdens of public
debt.
--
Michael Perelman
Economics Department
California State University
Chico, CA
95929
530 898 5321
fax 530 898 5901
http://michaelperelman.wordpress.com
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