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Massachusetts Governor's Proposed State Budget: "Let's Spend the Crumbs They Give Us This Way"

The budget could be increased 43% without raising our taxes one thin dime! Why isn't it?

by John Spritzler

March 5, 2015

Massachusetts's Governor, Charlie Baker, just announced his proposed budget for the state. Some details are reported in this Boston Globe article (which you might need to subscribe to the Globe to read, so I'll quote from it below.)

If We Ignore the Elephant in the Living Room...

There is an elephant in the living room that the Globe pretends is not there. The elephant is that the Massachusetts state budget is NOT about how to spend available social wealth; it is about how to spend the few crumbs of social wealth that Big Money tosses us.

If one ignores the elephant in the living room, then "responsible" discussion of the budget goes like this:

The budget calls for spending $38.1 billion in the next fiscal year. The Globe reports that the budget "reins in spending for a vast array of programs, including health care for the poor and disabled as well as state employees.The budget includes some cuts to welfare programs, early education initiatives and other services."

Some people are happy and some are unhappy with this budget. People who are primarily concerned with preventing their taxes from increasing even more are pleased that, "Sticking to a campaign pledge, the budget includes no new taxes or fees."

State employees aren't very happy to hear that, "the cost of a family [health] plan for certain state workers would increase from $6,179 to $7,698."

People relying on Medicare likewise are not happy to hear that, "The biggest program Baker targeted was Medicaid, the state-federal health plan for poor and disabled people."

Some of the state's progressive organization leaders defended the budget:

Health Care For All, an advocacy group, praised Baker for protecting Medicaid coverage for dental benefits, such as dentures, that were cut in 2010 and only recently restored.

Baker’s budget “maintains the Commonwealth’s longstanding commitment to providing access to affordable health care,” said Amy Whitcomb Slemmer, executive director of Health Care for All.

And some progressive organization leaders criticized it:

But Noah Berger, president of the liberal-leaning Massachusetts Budget and Policy Center, said Baker’s budget falls short of noble goals.

He said the budget would not whittle the waiting list for prekindergarten programs, would not reduce the cost of higher education, and would do little to tackle the multibillion-dollar problems facing the state’s transit system.

“The priorities are right, but there aren’t the levels of investment to really achieve those priorities,” Berger said.

Wealthier people seemed ok with the budget:

Eileen McAnneny, president of the business-backed Massachusetts Taxpayers Foundation, said the budget is a “great first step” in slowing the growth in state spending.

“They did it in a way that was responsible, all things considered,” she said.

Whether one liked or disliked the budget, everybody whose opinion the Globe considered worthy of being reported accepted--as if it were a Law of Nature--that there is only so much money available, and the only question is how to spend it. Hamering this point home, the Globe reports:

"Baker aides said some tough choices were necessary because Massachusetts is facing a $1.8 billion shortfall next fiscal year."

But If We Don't Ignore the Elephant in the Living Room...

In fiscal year 2015, military spending is projected to account for 55 percent of all federal discretionary spending, a total of $555 billion.

 

 

What if the United States did not spend so much on a militay force? After all, this military force--truth be told--is not about defending ordinary Americans from any real threat. It's about defending the top one percent of the wealthiest people in the world who expect to own over 50% of global wealth by next year. It's about defending the richest 400 people in the United States who own more wealth than half of all Americans combined. Defending them from what? From the very real threat coming from people all around the world who want more equality and real democracy.

What if the United States spent, say, as much as China spends (slightly less than $200 Billion) or alternatively, say, as much as Russia and Saudi Arabia and France combined spend (again, $200 Billion)? With a "modest" defense budge of "only" $200 Billion, this would free up about $355 Billion. How much of that would be available to Massachusetts? Let's see.

The total U.S. population (50 states and D.C.) in 2010 was 308,745,538, of which 6,547,629 lived in Massachusetts so that the Massachusetts population is 2.12% of the total. If Massachusetts received 2.12% of the newly freed up $355 Billion it would come to a bit more than $7.5 Billion. This figure is 20% of the proposed budget.

But wait! There's more.

The United States spends a lot more on war than what is included in the federal government's "defense" budget figure. As Nobel Prize economist, Joseph Stiglitz and Linda Bilmes report:

"Writing in these pages in early 2008, we put the total cost to the United States of the Iraq war at $3 trillion. This price tag dwarfed previous estimates, including the Bush administration's 2003 projections of a $50 billion to $60 billion war. But today, as the United States ends combat in Iraq, it appears that our $3 trillion estimate (which accounted for both government expenses and the war's broader impact on the U.S. economy) was, if anything, too low. For example, the cost of diagnosing, treating and compensating disabled veterans has proved higher than we expected."

Let's see. In 2008 the war* had been going on about 5 years, so this equates to $600 billion per year. If this figure, instead of the $355 Bilion figure used above, is considered the amount of money wasted on warmongering, then the newly available money for Massachusetts comes to $12.7 Billion, or 33% of the proposed Massachusetts budget.

But wait! There's still more.

Because our society is based on class inequality and because the ruling plutocracy, in order to prevent people from removing them from power and making a far more equal and democratic society, have to keep people as divided, hopeless, demoralized and dominated as possible, we have enormous rates of unemployment and incarcertion and people serving in the military. (For a fuller discussion of this, go here and here.)

Think about the social wealth that unemployed people and people in prison would be producing in a society that is not based on class inequality, but which they are not presently producing. How much wealth are we talking about?

For starters, how many people are unemployed or in prison? There are about 9 million unemployed people. How much wealth are these 9 million people not producing, even though they would produce it in an egalitarian society in which nobody is involuntarily unemployed (as discussed here)? To estimate the amount of such missing wealth, we can start by noting that the way capitalism works (the way a profit is made) is by paying a worker in wages less than the value he or she adds to the service or product by working.**

Therefore, it is safe to say that the value of the missing wealth that these unemployed people could, but do not, produce is greater than the wages they would, but are not presently, being paid today. (The money that they are now receiving as unemployment benefits is not paying them to produce any wealth, obviously, since they are unemployed.) So, to see how much of this missing wealth there is, we need only estimate how much these people would be paid to work if they were employed, and consider this a lower bound on the true value of the wealth they would produce.

If 9 million people were working for the minimum wage (an absurdly low amount, but we'll use it just to be safe) then the amount of wealth they would produce per year would be at least 9 million times $7.25 per hour, times 40 hours per week, times 50 weeks per year, which comes to $130.5 Billion. Using the same 2.12% (Massachusetts population compared to U.S. total) this translates to another $2.76 Billion that would (should!) be available to Massachusetts.

There are 2.27 million Americans serving in the military. If we could "get buy" with only one million, then the remaining 1.27 million could produce (by the same arithmetic as above) another $18.4 Billion, of which Massachusetts's share would be $390 million.

There are also 2.27 million Americans in prison. Some are made to work but many are not. To keep it simple, let's not include the missing wealth that these imprisoned people could (but do not) produce.

There is another kind of missing wealth. It is the wealth that is wasted from the point of view of ordinary people. Wealth like this:

It cost "only" $100 million, but Mr. Trump "needed" it because: "Inside there is a master bedroom with a work desk and an integrated home theatre system, a television room featuring a 52in flatscreen TV with a control box giving access to over a thousand of Trump's favourite movies, not to mention a bathroom with a circular shower. The lavish interior features golden fittings all over the plane, including the gold plated seat belt buckles in the main and guest cabins as well as a gold plated sink and faucets in the bathroom."

or this gold Ferrari:

This kind of "wealth" comes to about $1.8 Trillion world wide. The United States population of about 300 million is about 4.3% of the world's population of 7 billion. So on this rough basis, about 4.3% of that $1.8 Trillion, or about $77.4 Billion, is missing from being available to ordinary Americans, and 2.12% of it ($1.6 billion) is missing from being available to ordinary people in Massachusetts.

But wait! There's even still more.

BloombergBusiness reports: "U.S. Companies Are Stashing $2.1 Trillion Overseas to Avoid Taxes." If they're just "stashing" it away, then this $2.1 Trillion could be put to much better use paying for things ordinary people actually need and want. The share that would go to Massachusetts with its 2.12% of the U.S. population would come to $44.5 Billion. If this $44.5 Billion were invested and earned, say, 4% per year, this would come to $1.78 Billion per year.

By combining the $12.7 Billion missing Massachusetts wealth due to warmongering and the $390 million missing Massachusetts wealth due to involuntary unemployment and the $1.6 Billion missing wealth that is in the form of Trump's private jet etc., and the $1.78 Billion that is the missing interest on Massachusetts's share of the money that American corporations are "stashing away overseas to avoid taxes" we arrive at about $16.5 Billion missing from the Massachusetts budget that could be there without a single cent of increased taxation (except taxation to take money that corporations don't use but just stash away to avoid paying taxes.)! The Massachusetts budget, in other words, could be increased by 43% with no new taxes on ordinary people.

Just Imagine!

Just imagine how happy almost everybody would be if social wealth were used for the things most people really want? And imagine how furious the 400 richest Americans (who own as much wealth as half of all Americans combined) would be if this happened. Until we make an egalitarian revolution, it will be the 400 individuals who will remain unimaginably happy, and the rest of us will have to fight over how to share the crumbs. Let's start building an egalitarian revolutionary movement, as discussed at www.PDRBoston.org .

-----------------------

* A war based on lies, by the way, as the New York Times admitted (a bit late, on February 1, 2004) in this editorial:

“Without doubt the most important intelligence document leading up to the invasion was a National Intelligence Estimate hastily assembled and presented to Congress shortly before the vote on a resolution authorizing the use of force in Iraq. This document contended that Iraq had chemical and biological weapons in hand, as well as active programs to enhance its capabilities in all areas.

“This pivotal analysis is striking for the way it minimizes dissenting views on Iraq's capabilities. The estimate cites Iraq's aggressive attempts to obtain high-strength aluminum tubes as compelling evidence that Iraq was reconstituting its nuclear program. The declassified version issued at the time fails to mention that the Energy Department, the government's leading source of expertise, thought the tubes unfit for that purpose. The estimate warns ominously that Iraq was developing drone aircraft that were probably intended to deliver biological agents and could even threaten the American homeland. That view was disputed by Air Force intelligence, the chief source of expertise on drones, which thought the drones were primarily for reconnaissance. These were no minor dissents. These were the agencies most qualified to judge.

“Also left unexplained was how the estimate's authors could conclude that Iraq was continuing and expanding its chemical weapons programs when a Defense Intelligence Agency report had just acknowledged that ''there is no reliable information on whether Iraq is producing and stockpiling chemical weapons.'' In these and other respects, the information on which Congress based its war vote seems out of kilter with the government's own most expert opinions. ”

President G.W. Bush also lied about the supposed connection between Saddam Hussein and al Qaeda. As reported by the Washington Post:

"The Sept. 11 commission reported yesterday that it has found no "collaborative relationship" between Iraq and al Qaeda, challenging one of the Bush administration's main justifications for the war in Iraq."

** Were this not the case, and the employer sold the service or product for a fair price that only covered the cost of raw materials and repair or replacement of worn out machinery etc., plus the full value added to the raw materials by the workers' labor, then the price would be the same as the cost of production and there would be no profit. The only way to deny that workers are paid less than the value they add is to claim that the employer pays the workers for all of the value they add to the raw materials and makes a profit by selling the service or product for a price that is the cost of raw materials plus replacement of worn out machinery etc., plus the full value added to the raw materials by the workers, plus an extra amount added to the price to make a profit. In this case, one is forced to admit that capitalism works by selling commodities for more than their actual value, which raises the question, "Why do customers pay more than the fair price for commodities?"

 

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End Class Inequality (John Spritzler's blog #2)

 

Books

We Can Change the World: The Real Meaning of Everyday Life by Dave Stratman

The People as Enemy: The Leaders' Hidden Agenda in World War II by John Spritzler