22 October 2008

Memo to the American Voter

Less than a year ago, several candidates vied for your support on the premise that he or she could best handle our foreign affairs; the Democrats vowed to get us out of Iraq soon and the Republicans promised victory.  Now, the final two Big Party candidates, Senators John McCain and Barack Obama, are trying to convince you that his economic policy will turn around our trainwreck of an economy.  Each has tried to explain his message (and characterize his opponent's), though to my way of thinking each has failed to properly boil it down for the average person.  That's you, in case you were curious.

Every election year, the Republican candidates insist that they want to cut taxes and that their Democrat opponents are "tax and spend liberals."  They convince you, time and again, that this means the Democrats are going to raise taxes on everything they can, and then give that money to ever-fertile crackwhores.

Let's take my home state of Kentucky.  The Executive Operating Budget for 2001 and 2002 was $32.38 billion.  Where did the Commonwealth of Kentucky get $32.38 billion to spend for those two years?

Commonwealth of Kentucky
Executive Operating Budget, by Fund Source
Fiscal Years 2001 and 2002 Combined ($32.38 billion)

42% General Fund ($13.62 billion)
29% Federal Funds ($9.42 billion)
21% Restricted Funds ($6.75 billion)
7% Road Fund ($2.31 billion)
1% General Fund (Tobacco) ($0.29 billion)

Note: Postsecondary institution Federal Funds are classified as Restricted Funds in these figures.

Looking at this, then, we see that an entire third of Kentucky's Executive budget was federal money.  Know what that means?  That means that, of every three dollars Kentucky had to spend in those two years, it only came up with two of them itself.  Which brings us to the question of what Kentucky spent $32 billion on, anyway.

Commonwealth of Kentucky
Executive Operating Budget, All Funds, by Function
Fiscal Years 2001 and 2002 Combined ($32.38 billion)

21% Elementary Education ($6.93 billion)
21% Medicaid ($6.65 billion)
18% Colleges ($5.94 billion)
11% Transportation ($3.46 billion)
10% Other Public Health Services ($3.23 billion)
6% Government Operations and Finance ($2.05 billion)
5% Commerce, Economic Development, and Other Education ($1.52 billion)
4% Justice and Public Safety ($1.31 billion)
4% Environmental and Public Protection ($1.29 billion)

Note: Elementary Education includes School Facilities Construction Commission, Teachers' Retirement System, and Education Professional Standards Board which are outside of the Department of Education.

Elementary Education and Colleges combined for 39% of Kentucky's budget, on the premise that "education pays" (I'm not belittling the concept; it was our state slogan for a while).  Let's take away the federal funds and see the impact it has on the budget.  We could, theoretically, just wipe out the entire operating budget for Commerce, Economic Development, and Other Education; Government Operations and Finance; Justice and Public Safety; Environmental and Public Protection; Other Health Services.  Those sound important, though, so we should instead re-divvy the money.   Assuming that the percentages of money allocated to each function represent their place in the pecking order and that those percentages would have stayed constant, the revised budget is now valued at $22.96 billion, and it breaks down as follows:

Commonwealth of Kentucky
Executive Operating Budget, All Funds, by Function
Fiscal Years 2001 and 2002 Combined ($22.96 billion)
(Revised to Reflect the Absence of Federal Funds) 

21% Elementary Education ($4.91 billion)
21% Medicaid ($4.72 billion)
18% Colleges ($4.21 billion)
11% Transportation ($2.45 billion)
10% Other Public Health Services ($2.29 billion)
6% Government Operations and Finance ($1.45 billion)
5% Commerce, Economic Development, and Other Education ($1.08 billion)
4% Justice and Public Safety ($0.93 billion)
4% Environmental and Public Protection ($0.91 billion)

The lesson to learn?  Taxes pay for things.  Federal funds greatly assist poor states, so if you live in a poor state you stand to benefit from the federal government "taxing and spending."  Unless, of course, you want your state to choose between maintaining roads or teaching children.  See, rich kids don't go to public schools, so their parents resent paying for your kids to go to one.  Rich neighborhoods always seem to have smooth roads and working street lights, so they don't mind the road budget being small--they're taken care of first.  Rich people don't care about your kids getting grant money to help go to the state college you couldn't afford to send them to; their kids are going Ivy League on a legacy scholarship.  So, for them, all this budget means is taking their money and throwing it away on poor people.  That's me, and chances are, that's you, too.

See, the conservative side of our society likes an "every man for himself" situation, because they've already got it good.  It's easy to favor cutthroat policies when you've already cut enough throats to make things comfortable for yourself.  And time and again, they make you think that when they say things like "they're going to tax us to death" that when they use "us," that it includes you.  It doesn't.

Go back to the 2001 George W. Bush tax cuts.  Remember getting your $300 tax rebate?  How important was it to you to have $300?  If you're poor, it probably meant paying a few bills, getting ahead on your credit debt or, more likely, a new consumer electronics purchase.  And, really, what's wrong with getting back your own money to help you buy a new HDTV?  Well, what happened was that you got $300, and so did every household in your neighborhood.  In a neighborhood of 100 houses, that's $3000.  How many 100 house neighborhoods are there in Kentucky?  The most recent U.S. census report estimates 300 million Americans.  If a tenth of them (31, 400, 000, to be exact) were given $300 that they used to pay in taxes, then there is no $9.42 billion to give Kentucky.  Of course, instead of omitting an entire state, the federal government simply reduced its allocations proportionately, but you get the idea.

And, of course, this is assuming that $300 is all anyone received in those tax cuts.  No, you and I got $300.  (Actually, you got $300; I got a letter from the IRS informing me I didn't make enough that year to qualify, thanks to being a full time student.)  People making the big money got a much bigger check in the mail.  Consequently, the Bush tax cuts have starved the federal government of nearly a third of its operating funds.  That's right, adding up all those $300 checks has done as much to cripple the economy as the entire costs of responding to the September 11, 2001 attacks.  When Bush said he was going to give "you" back "your" money, what he didn't tell you--and what you were too busy to think about--was the impact that would have on your life.  Don't fall for it again.  And if you do fall for it again, be sure not to tell me you read this blog first.  I'll have to redistribute my foot to your ass.

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