The unions and their supporters have taken to the streets in Wisconsin – some 70,000 of them – to protest pay-cuts and the like that are being implemented by the Republican Governor in an attempt to balance the budget.
It looks like an interesting event – with the protestors clashing (no, not violently) with Tea Party people… including Joe the Plumber who you may remember from the election campaign.
The protestors in Wisconsin claim to be inspired by their brethren in Egypt, who recently toppled a dictatorial government, but their circumstances bear close resemblance to my brethren in Ireland.
As Dean Baker has pointed out, the proposed budget-cuts which the marchers are responding to essentially stem from the bursting of the housing bubble and the interminable recession that was caused therefrom. Chalk up one similarity with Ireland.
But Wisconsin is similar to Ireland in other ways too. As in their approach to the crisis. Just like in Ireland, the response is to attempt to balance the budget – even though attempting to do so will do no such thing. Baker sums it up nicely:
According to the Congressional Budget Office, the economy is operating at more than 6.4 percentage points below its potential level of output. If Wisconsin’s state economy was 6.4 percent larger, and its revenues increased accordingly, it would have more than $4 billion in additional revenue in its coffers over the next two years.
This increase in revenue would easily cover the projected deficit. This is even before we add in the savings from lower payouts for unemployment insurance and other benefits that would follow from a return to normal levels of unemployment.
This is precisely the case in Ireland too. We have so many idle workers sitting around on the dole doing nothing. I know from hearsay that plant and equipment is also laying idle (and, given that there are fewer people employed than there were four years ago, I do not find this at all surprising). If all these resources were utilised, our supposed budget woes would be a lot less of an issue.
Conservatives of various ilks come across as furious when you mention that someone somewhere might be sitting around on social welfare, sponging off the government while watching daytime TV. So why on earth don’t they support a government works program that would pay these people a bit more money in exchange for their labour? I don’t know the answer to that – but I suspect that the words ‘big’ and ‘guv’ment’ might be iterated if you were to bring this up in polite conversation…