States Forced to Cut Services to Bone:
Opportunity Cost of the Bank Bailout
By Arianna Huffington
(c) Paul Tong
OK, the bailout of
But we have pumped at least
At a certain point, these numbers are so huge it becomes hard to keep them in perspective, to be clear what
And it reminds us, once again, how lopsided the "recovery" has been: with banks that received billions in taxpayer handouts now reporting massive profits and setting aside record amounts for executive bonuses, and the American people continuing to face 9.5 percent unemployment, 10,000 foreclosures a day and vital services being cut.
Consider: at least 39 states have imposed budget cuts that hurt families and reduce vital services to their most vulnerable residents. The litany of those affected includes children, the elderly, the disabled, the sick, the homeless, the mentally ill, as well as college students and faculty, and state government workers.
America's states are facing a projected cumulative budget gap of
These are massive numbers. But when you remember that we spent
But instead that money has gone to the banks without any fundamental reform of the system, and without any strings attached about how much they had to turn around and lend to help the real economy recover. Or, indeed, without any strings attached about having to tell us what they did with our money. So all across the country the fiscal ax is falling.
According to a report by the Center on Budget and Policy Priorities, at least 21 states have made cuts to public health programs, 22 states have cut programs for the elderly and disabled, 24 states have cut aid to K-12 education and 32 states have cut assistance to public colleges and universities.
The devastation is in the details:
Keep in mind, all these services are being cut at a time when more and more people are finding themselves in need of them.
It's a perfect storm of suffering.
Looking at all the money that has gone to the banks -- and how well they seem to be doing, using it to bolster their bottom line (and even buy other banks) -- while the real economy is doing so poorly, proves just how wrong the government's approach to the recovery has been.
This approach was on full display during Bernanke's recent back-to-back testimony in front of the House and the
But wasn't that the main reason for the bailout -- to get the banks lending again?
Launching into his questioning of Bernanke,
Instead, they are seeing programs slashed, services cut, and state budgets balanced on their backs.
Something is very wrong with this picture.
(c) Paul Tong
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(c) 2009 Arianna Huffington. Distributed by Tribune Media Services, Inc.
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