Tuesday, March 1, 2011

Children Paying The Highest Price Of Excessive Government Debt

With record deficits at both the Federal and State level, the burden for repayment is being pushed to our children in more ways than one. Texas is a prime example of a state that is setting its children up for failure. Economics professor Mark Thoma looks at a recent article by Paul Krugman on the topic in his blog post below.

Budget hawks are confused by the meaning of "putting children first":

Leaving Children Behind, by Paul Krugman, Commentary, NY Times: Will 2011 be the year of fiscal austerity? At the federal level, it’s still not clear: Republicans are demanding draconian spending cuts, but we don’t yet know how far they’re willing to go in a showdown with President Obama. At the state and local level, however, there’s no doubt about it: big spending cuts are coming.

And who will bear the brunt of these cuts? America’s children. ... Consider, as a case in point, what’s happening in Texas, which more and more seems to be where America’s political future happens first.

Texas likes to portray itself as a model of small government, and indeed it is. Taxes are low, at least if you’re in the upper part of the income distribution (taxes on the bottom 40 percent ... are actually above the national average). Government spending is also low. ...

But here’s the thing: While low spending may sound good in the abstract, what it amounts to in practice is low spending on children, who account directly or indirectly for a large part of government outlays at the state and local level.

And in low-tax, low-spending Texas, the kids are not all right. The high school graduation rate, at just 61.3 percent, puts Texas 43rd out of 50 in state rankings. Nationally, the state ranks fifth in child poverty; it leads in the percentage of children without health insurance. And only 78 percent of Texas children are in excellent or very good health, significantly below the national average. ...

It’s not a pretty picture; compassion aside,... how the state can prosper in the long run with a future work force blighted by childhood poverty, poor health and lack of education.
But things are about to get much worse. ... For months, Gov. Rick Perry had boasted that his “tough conservative decisions” had kept the budget in surplus while allowing the state to weather the recession unscathed. But after Mr. Perry’s re-election, reality intruded — funny how that happens — and the state is now scrambling to close a huge budget gap. (...achieved with an overwhelmingly nonunion work force.)

So how will that gap be closed? Given the already dire condition of Texas children, you might have expected ... high-income Texans, who pay much less in state and local taxes than the national average, to be asked to bear at least some of the burden.

But you’d be wrong. Tax increases have been ruled out...; the gap will be closed solely through spending cuts. Medicaid, a program that is crucial to many of the state’s children, will take the biggest hit, with the Legislature proposing a funding cut of no less than 29 percent... And education will also face steep cuts, with school administrators talking about as many as 100,000 layoffs.

The really striking thing about all this isn’t the cruelty — at this point you expect that — but the shortsightedness. What’s supposed to happen when today’s neglected children become tomorrow’s work force?

Anyway, the next time some self-proclaimed deficit hawk tells you how much he worries about the debt we’re leaving our children, remember what’s happening in Texas, a state whose slogan right now might as well be “Lose the future.”

This post was republished with permission from The Economist's View.

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1 comments:

March 14, 2011 at 2:14 AM John Riley said...

What’s supposed to happen when today’s neglected children become tomorrow’s work force?

- This question moved me. While the budget cut aims to lessen government debt, many are not happy with it, even the business community.

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