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Austerity in the U.S.A.

The streets of Athens exploded yesterday with Greek protesters lamenting severe austerities adopted by the Greek parliament. The nation faces a fire sale of national assets in an attempt to balance out its flailing budget and, of course, to rescue creditors who refuse to accept a Greek default, and are reluctant to even consider write-downs. Once again, the irresponsibility of the financial industry, in the form of extending loans to a nation known to have serious fiscal problems, will be paid for in the blood of the people, who have five years of proposed austerities to endure in the interest of protecting the banks.

Meanwhile, the California legislature finally passed a budget after weeks of wrangling, including extensive childish behaviour on the part of legislators; Democrats and Republicans alike engaged in petulant stomping when it became apparent that they wouldn’t get their way, while Governor Jerry Brown initially vetoed a budget proposal, making history and triggering a temporary shutdown of pay to lawmakers. With the budget year ending today, California was down to the wire, and Brown has indicated that he will sign the new budget, though he, along with pretty much everyone else, is not very happy about it.

That these two events occurred on the same day was not a coincidence; that the responses to each were so radically different is a reflection of different cultural norms, as well as a lack of understanding among the California public when it comes to exactly how vicious this budget is as the state adopts its own austerity plan in an attempt to cope with long-term financial issues. California’s budget has been in trouble for years, under multiple governors, and thus far no progress has been made to balance it because of repeated obstructionist tactics and clashes over taxes. As long as GOP representatives in California refuse to raise taxes, California is going to have fiscal problems, and those problems are going to get worse, because the state will go deeper and deeper into debt, and will spend even more money servicing debt in an attempt to dig itself out of the hole it has created.

Repeated ballot measures have attempted to thrust the responsibility for these hard decisions onto California voters, who have responded in mixed terms, depending on election year and the level of marketing exerted to promote yes and no votes on often confusing, conflicting, and tangled budget measures. The result is a snarled mess that even legislators have difficulty comprehending, creating more and more problems at every turn in addition to establishing a legacy of issues that will dog the heels of future generations, just as Proposition 13 continues to haunt us.

Under the new budget, the state will be forced to close 70 state parks and slash funding to low-income Californians like pregnant teens trying to finish school and disabled persons attempting to survive. The education system faces significant funding cuts—23% at the UC/CSU level—, and the state is sucking away millions of mental health funds, a rather remarkable accomplishment when you consider how little the state dedicates to mental health funding as it is. Since the Reagan Administration, California has dedicated little, if any, effort to mental health services and the results can be on the streets across the state, where the homeless population soars and many of those individuals are mentally ill. Mentally ill veterans in particular are an alarming percentage of the homeless census.

These and other significant funding cuts are included alongside the promised expiration of special taxes established on vehicles license fees and retail sales; as of Friday, Californians will be paying less sales tax, and it won’t cost as much to register a car. Meanwhile, significant tax differentials much like the ones on the federal level that the President had sharp words about yesterday remain in place, allowing wealthy Californians and corporations to benefit from a slew of tax cuts and other loopholes that allow them to expend minimal funds on paying their taxes, while poor Californians have nowhere to hide when the tax man comes knocking. A few small service fee increases pushed through by the Democrats don’t make up for these significant disparities, and can’t hope to.

The result? Even with these austerity measures, the budget falls an estimated four billion dollars short. Legislators apparently believe this money is going to fall from the sky like manna from heaven to fix the budget. Republicans insist that these inadequate measures to address the budget problem will push debt onto future generations, which is absolutely true, but they’ve done absolutely nothing to address that issue. In fact, they’ve actively ensured that the budget will force these issues to linger, by steadfastly refusing to consider any sort of changes to California’s tax code that might result in wealthy people paying more taxes.

Instead, Republicans propose cutting pensions—the entitlement programmes that workers have already paid into and been guaranteed under employment contracts—and reducing regulations. Republicans are fond of claiming that the regulatory climate in California ‘hurts business,’ by which they mean that it is harder for large corporations to do things like polluting rampantly and abusing workers. In last year’s election, measures to cancel out regulations made it onto the ballot, asking voters to vote to roll back some of the most significant anti-pollution measures in the United States. Because the solution to budgetary chaos is to destroy the environment, evidently; clearly, the benefits of gutting California’s regulations would outweigh the costs of increased health care expenses and other costs associated with environmental cleanup.

This is a budget with very serious implications for some of the most vulnerable people in California. Women in need of reproductive health services. Immigrants attempting to access an education. Prisoners in dangerous, overcrowded, environments. The Los Angeles Times lays it out starkly for readers:

Without [the four billion dollar shortfall], even deeper cuts would be triggered automatically. The first reductions would be to universities, libraries, prisons and services for the needy and disabled.

Note this all-star lineup. This is where California’s budgeting priorities lie, to slash at services for the most disadvantaged members of society first. California desperately needs a class war, and yet so far the protests against budget cuts have been limited, and receive minimal media coverage; disabled activists were arrested at the Capitol for protesting earlier this year, and it’s virtually impossible to find any coverage of the event. What will it take for Californians to start pulling up the cobblestones in numbers big enough that the media has to report it?


  1. Brigid wrote:

    Thank you for writing this. The budget battles that have been raging in the U.S. for months now are terrifying and hard to keep track of; it’s really helpful to have someone spell them out like this every so often. Incidentally, I’ve been slowly working my way through Naomi Klein’s THE SHOCK DOCTRINE since January, and each time I pick it up it seems it could not be more timely.

    Thursday, June 30, 2011 at 11:00 am | Permalink
  2. Aaron wrote:

    “What will it take?” — an inarguably obvious and significant impact on the bought-off “middle class”. Until it hits people with enough money, leisure, and PR-suitable telegenicity to fight back, it’s just going to keep on rolling.

    And there’s a rather fundamental point I think you’re missing here:

    “Because the solution to budgetary chaos is to destroy the environment, evidently; clearly, the benefits of gutting California’s regulations would outweigh the costs of increased health care expenses and other costs associated with environmental cleanup.”

    Of course the benefits outweigh the costs! What on God’s green earth gives you the idea for one second that anyone involved in the deregulation has the first intent of paying those costs? They know they’ll get away with not doing so, or at worst they’ll pay a laughable pittance of a fine and still not have to clean up behind themselves or treat their workers as anything other than disposable. So why even bother to worry about it?

    Thursday, June 30, 2011 at 12:03 pm | Permalink
  3. Andrea wrote:

    As California goes… I’m afraid that this is going to be the story at the federal level; in some ways it is already. Things had to get catastrophically awful in the 19th and early 20th centuries to make workers organize, and I suspect they’re going to have to get catastrophically awful again before people start pushing back.

    Thursday, June 30, 2011 at 12:19 pm | Permalink
  4. Kate wrote:

    The further cuts to higher education are absolutely terrifying. The rest of the cuts are equally abhorrent, but only the education ones directly affect me so that’s all I can speak to.
    I did my undergrad at SFSU, a working class commuter university, during some of the initial cuts between 2006 and 2010. It became impossible to secure the classes you needed to graduate, either because they no longer existed, there was no one to teach them after massive layoffs, or they we just too damn full. A number of my professors broke fire code to make it work by shoving 70 kids into a 35 seat classroom, but we shouldn’t be put into hazardous situations just to get an education.
    The cuts in classes pushed many of my classmates off the four year graduation tract. Instead of graduating in 8 semesters it often took 10, sometimes 12 or more. 4 extra semesters is an incredible amount of money for people who can barely afford to attend the school as it is. Not to mention the immeasurable toll this took on their working lives, as many students had to take classes they didn’t exactly need just to maintain their financial aid status, which severely cut into their available working hours. Being a full time student and a full time worker is hard enough as it is – it becomes nearly impossible to do both you’re forced into working graveyard shifts that abut 9 am classes.
    I’m heading back to SFSU this fall to start a graduate program. I can only imagine what kind of shitshow awaits me and my fellow students.

    Thursday, June 30, 2011 at 5:11 pm | Permalink
  5. Meg Thornton wrote:

    I’ve said this elsewhere, but I suspect what could help to turn the tide in the US is good, old-fashioned consciousness raising. The situation at present (to me) is analogous to the situation of the fifties housewife – upset, not coping, and informed by all the media, all the social indicators around her that the problem is with her rather than with the society she lives in.

    So I think the best key for this is for Joe and Josephine Q Public to get together with their neighbours and discuss the current situation, and discover that the problems aren’t just with them – that Fred and Frederica Upstairs have them, that John and Mary NextDoor have them, that George and Georgina AcrossTheStreet are having the same sorts of issues, and that Dorothy Downstairs and her life partner Random are trapped in the same web of problems too. Most revolutions and overthrows in history came when people saw what was happening not only to themselves, but to their friends and neighbours, and decided “this can’t go on”.

    Thursday, June 30, 2011 at 8:52 pm | Permalink
  6. Renee wrote:

    @ Kate

    I went to SFSU from 07 to 09 as a transfer and I know exactly what you are talking about. I remember trying to crash a class my first semester and scrambling to find another class that fit my schedule. By the time I left, it was much worse. Just getting my last class to get my BA was a chore. My former roommate told me that they upped the fee to file for graduation to around $100, I think. I can’t imagine what it must be like there now.

    Friday, July 1, 2011 at 1:00 am | Permalink
  7. firefly wrote:

    I’m seriously considering applying to an out of state university at this point. My family has enough money (upper middle class) to afford this and get through fairly well, but cutting education will not result in a good future for me…

    Friday, July 1, 2011 at 10:39 pm | Permalink
  8. jennygadget wrote:

    “What will it take for Californians to start pulling up the cobblestones in numbers big enough that the media has to report it?”

    I do not know, but if anyone figures it out, please let me know. Me? I’m in the mood for a general strike. But then, I’m one of the people being forced to lose benefits and go to part time because of cuts at the county level – not to mention potentially losing my scholarship money because of cuts at the state level. So, you know, for me it’s currently a decision between having my pay cut by more than half or losing all my pay – not quite the same choice as it was a few weeks ago.

    Saturday, July 2, 2011 at 2:32 am | Permalink