Foreshadowing 2012

[Geee]

Front Page Magazine:

As most Americans are now well aware, the confrontation in Wisconsin has become a “line in the sand” moment reverberating throughout the entire nation. The sides are clearly defined: Wisconsin’s public employee unions, the Democratic National Committee (DNC), Barack Obama’s Organizing for America, national labor leaders, and the president of the United States, versus Wisconsin Republicans, Tea Party activists, and taxpayers fed up with runaway government spending. Yet what Americans might not know is this: the animus Democrats and their allies are confronting has been substantially created by Democrats themselves: welcome to a “stimulus generated” confrontation.

The American Recovery and Reinvestment Act of 2009, aka the Stimulus Bill, was ostensibly supposed to fund “shovel-ready” jobs and keep unemployment at 8%. Since unemployment is at 9% officially (and close to 17% in reality), and president Obama himself admitted there was “no such thing as shovel ready projects” last October, one might be forgiven for wondering where a $787 billion package, which quickly increased to $862 billion in federal subsidies, ended up.

Where a substantial portion of it ended it up was in state coffers, where it was used to shore up budget shortfalls. “There’s no doubt that the stimulus has helped maintain state and local government employment…it was a lot of money for two years that was largely fiscal relief [to the states], meaning that they had some flexibility. If it hadn’t been for that, they would have been making major cuts,” said Donald Boyd, a senior fellow at The Nelson A. Rockefeller Institute of Government at the State University of New York at Albany. Now that the stimulus spending is decreasing, “[states] face really severe choices and clear voter sentiment largely against any tax increases. So that leads you to the spending side of the budget,” he added.

According to the Bureau of Labor Statistics, while private sector employees were bearing the brunt of the recession, government workers were largely spared: between June 2008 and June 2010, “the number of private-sector employees fell by six percent, but the number of state and local government workers declined by less than one percent.”