The $3.6 Billion Walker lie continues…all the way to Ireland (pass the potatoes)

Scott Walker made certain the projections were bleak, bordering on the catastrophic, and the media ate it up. In the Milwaukee Journal Sentinel on February 7, 2011 Walker spokesman Cullen Werwie was quoted as saying:

“Bill collectors are waiting at the door of the state Capitol. Without taking action to reduce the deficit in the current fiscal year, thousands of Wisconsin children and families could lose their health care coverage through BadgerCare, and there would need to be even more aggressive spending cuts in the future.”

Before presenting a budget, Walker had succeeded in creating a $3.6 billion deficit panic. The mantra continues today, as it continued on the campaign trail. Even across the border as Walker addressed the Illinois Chamber of Commerce in April.  The Romney Campaign is embracing Wisconsin as the role model for the nation. Scott Walker is the hero that conquered the deficit beast, and America must embrace the austerity measures to save itself – as they have saved Wisconsin.

The entire budgeting premise upon which Walker based his “deficit crisis” was a lie. Having been a legislator in Wisconsin, he would have known this, or he is a complete idiot. We also now know what these “austerity” measures do to a national economy, yet it is being largely ignored by the media. Should the Walker policies continue to expand, and Romney wins the White House in November pass the potatoes – because Wisconsin will look more like Ireland in two years than the state we all know and love. Read on for details.

Walker’s $3.6 Billion deficit was based on the 2011-2013 State Agency Budget Requests . Representative Mark Pocan (D-Madison) received and released a Legislative Fiscal Bureau memo from February 16, 2011 - but no media were paying attention. Scott Walker was intervening in the budget process prematurely – for the purpose of creating a fiscal emergency. As shown in the memo, the final Agency Budgets are never funded at the levels requested by the agencies. There are constant negotiations and compromises in both revenues and expenses during the budget creation process – much of which happens in the Legislature. The 2011-2013 requested increases of 7.2% contributed to much of the reported deficit, and would have been greatly reduced in the legislative budgeting process. The Agency appropriations for 2009-2011 actually received a cut of 2.6% from the baseline, due to one-time federal stimulus payments. This so-called “deficit” existed only on the paper from the Agency Funding Requests.

On January 31, 2011 (before the Walker “deficit emergency” took hold in the media) the Legislative Fiscal Bureau (LFB) sent a memo to Joint Finance Chairs Robin Vos and Alberta Darling. Based on the 2009-2011 Doyle budget in place, the LFB forecast a year-end SURPLUS of over $56 Million. This had actually been a revision of the Doyle Administration’s earlier forecast of a $112 million surplus due to several reasons:

1. Lower tax collections.

2. Debt payments being made in 2010-2011.

3. Budgeted Minnesota reciprocity lapse payment.

4. Some increase in department revenue and lapses.

That’s right citizens – before Scott Walker took office, Wisconsin had a budget surplus. In addition, the Agency appropriations had not been addressed as part of the budgeting process. The truth is, the $3.6 Billion “deficit” was only on paper – it was not functional. The lie persists; the result being an affirmation of Walker’s austerity measures. Where has that gotten us? On a road paved with intended and known consequences – known because we have an economic precedent.

The February 9, 2012 LFB memo submitted to Vos and Darling on  shows the effects of austerity. Unlike any DOA or DOR analysis, the LFB is the only truly non-partisan budget analysis taking in factors from all fiscal agencies, and using a consistent measure. Wisconsin is now faced with a $208 Million + deficit by the end of 2013. The memo specifies the effects of laws enacted in 2011 to decrease revenue, and increase the burden of state expenditures on a shrinking middle class. The memo also cites the decrease in tax revenue being collected and pursued from large corporations; a function of greater loopholes and deregulation of corporate taxes and collections.

As the GOP has already indicated, the answer to this decrease in revenue will be to cut, cut, cut – more austerity. A word of warning, which, based on the recall election may be too late. Wisconsin’s economy is only being bolstered by a slightly improving national economy. While we rise in the “business friendly” and “economic freedom” indicators of the Heritage Foundation, there are severe consequences for the policies we are pursuing. In the absence of any stimulus, Wisconsin would have gone from stagnant to depressed. The model exists for Wisconsin under Scott Walker and a potential Romney presidency. It is Ireland.

In an interview on the Colbert Report, June 18 2012, Paul Krugman put the Ireland economic example in perspective. In response to the suggestion by Colbert that electing Mitt Romney president would solve our economic problem, Krugman sates:

“Ireland is Romney economics in practice. They’ve laid off a large portion of their public workforce, they’ve slashed spending, they’ve enacted extreme austerity programs, they haven’t raised taxes on corporations or the rich at all. They have 14% unemployment, 30% youth unemployment. Ireland is what the US economy would be under Romney.”

In 2008, Ireland was ranked as the 3rd best economy in the world for “economic freedom” by the Heritage Foundation. Low corporate taxes, little regulation, the “Celtic Tiger” was a model capitalist state – having achieved its economic freedom and prosperity over a decade of free market growth. By 2009, the economy was in shambles, and Ireland was the first and most aggressive European nation to adopt austerity measures. In April 2009, Paul Krugman sounded the warning to us and Europe:

Unfortunately, we didn’t save for a rainy day: thanks to tax cuts and the war in Iraq, America came out of the “Bush boom” with a higher ratio of government debt to G.D.P. than it had going in. And if we push that ratio another 30 or 40 points higher — not out of the question if economic policy is mishandled over the next few years — we might start facing our own problems with the bond market.

Not to put too fine a point on it, that’s one reason I’m so concerned about the Obama administration’s bank plan. If, as some of us fear, taxpayer funds end up providing windfalls to financial operators instead of fixing what needs to be fixed, we might not have the money to go back and do it right.

And the lesson of Ireland is that you really, really don’t want to put yourself in a position where you have to punish your economy in order to save your banks.”

That is precisely what we are doing – the overall economy is suffering to save the banks, multinational corporations, and wealthiest among us. While Euro-zone leaders hail Ireland’s continued austerity, the people are suffering – 14% unemployment, wage cuts, healthcare cuts, public services slashed, and nearly 40,000 have left the country for greener pastures. On June 17, 2012, Paul Krugman addresses the “success” that the International Monetary Fund considers Ireland:

“…this was a statistical illusion, reflecting the fact that very capital-intensive industries, especially pharma, had weathered the crisis better than labor-intensive sectors. Meanwhile, the real thing — slight wage decline in Ireland while wages rise in Germany — has been proceeding at a relatively glacial pace. And the promised payoff in increased market share is still invisible.”

Continued austerity will have the same effect here – decreased wages, high unemployment, decreased revenues, the list goes on. So does the GOP austerity train…

The lie of the deficit emergency, if allowed to persist as the greatest threat to our state and nation, will have dire consequences for the ever-shrinking middle class. Either Scott Walker, Paul Ryan, Mitt Romney and the GOP powers know and want this – or they are idiots.

Stock up on corned beef, cabbage, and potatoes. Pass the Jameson. We’ll need good whiskey for the revolution.

Solidarity!

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13 thoughts on “The $3.6 Billion Walker lie continues…all the way to Ireland (pass the potatoes)

    • I have said this before to one of your comments, Rick. First, I would appreciate keeping it clean. Second, tell me where you think I am wrong. Third, use spell check. Finally – try contributing something intelligent to the discussion about the direction of our state. If you can’t, I’m sure Vicky McKenna would welcome you on her show.

      Thanks for reading.

  1. This really is pretty despicable. The entire “lie” allegation hinges on a misrepresentation of the January 2011 LFB memo, which did discuss the FY2011 surplus that you point to, but then explained just a paragraph or two later (page 3 of the memo) that the surplus would be eaten up by the obligations to repay Minnesota, and the patients compensation fund, and the shortfalls in medical assistance, the public defender’s office, and corrections.

    Did you even read the memo, or did you base your whole position on the Cap Times story that originally made the mistake?

      • Oh no – I have a response for you…patience grasshopper. Although I’ll give you a hint – before you make a comment like that, you better understand the budgeting process, and how to read a LFB report. I’m approving your full comment and will respond soon; though it won’t matter, you’ll still believe Walker’s budget is working. Joke’s on you.

  2. “To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just as long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies – all this is indispensably necessary.”

    • …from the party faithful. You must think I have nothing better to do than respond to your “scary” rantings. Untrue. Here’s the problem – if you, and those who blindly follow Scott Walker and the economic fraud being perpetrated by corporate conservatives, REALLY believe the “deliberate lies” they forward as responsible policy – there is nothing to say. You continually ignore the actual serious economists who have been warning about this austerity policy since 2008. You continually ignore the facts for ideology…and worse, when they are presented to you, you write them off as being “political.” This blog is not a tool for the Democratic Party or the Obama campaign…you must have noted the critical tone towards them on many occasions. Scott Walker used the budget process to create a crisis…textbook. The “deficit fear” being spread today on a national level is the same process…textbook. Do yourself a favor – read Paul Krugman’s blog for one month.

  3. You know, it doesn’t even really bother me that you insulted me personally. What’s really bugging me is that you use the words “truth” and “journalism” in your tag line, even as you continue to lie to people with this post.

    If you had any self-respect, respect for democracy, or common decency you would correct the post and stop misleading people. But after almost two months of this bull***, I don’t see that happening. I really don’t know how people like you sleep at night.

    • The only misleading of people was Walker’s intentionally deceptive misuse of the budgeting process; and his own tax cuts to wealthy, corporate interests which had a negative impact on revenue – making the situation worse. The Minnesota reciprocity payments you are referring to in your previous comments are a drop in the bucket. The point of the blog is factually accurate and true. Walker chose austerity when it wasn’t necessary – that has consequences which are now playing out at the state level (as they are nationally). Walker restructured more debt in his first year than Doyle did in 4 – look it up. I am not defending Doyle’s mismanagement of the state budget-on the contrary, I have condemned it in the past. The issue at hand is that Scott Walker lied about the state’s fiscal situation, created a crisis – when in fact revenue forecasts, prior to the 2011-2013 budget (Act 32) being passed (and Act 10) were on the increase. This is not a personal insult – you are so sold on the ideology of Walker et al, you fail to see the fraud and irresponsibility of his administration…that is the only worry that keeps me up at night. That people like you are beyond reason, beyond seeing what rational governance and responsible fiscal budgeting is. There is an historical precedence for getting out of this fiscal mess – it is being ignored for ideology.

      • I’m not at all a fan of Scott Walker, but I am a fan of truth. This: “That’s right citizens – before Scott Walker took office, Wisconsin had a budget surplus,” is a lie. It’s a lie that was originally told by the Capitol Times editorial board based on a misunderstanding of the LFB report. A lie that was perpetuated and defended by Rachel Maddow until she finally admitted she was wrong (after first trying to blame the discrepancy on tax cuts that wouldn’t take effect until FY2011, as I think you’re clumsily trying to do here). And it’s a lie that continues on a number of blogs because blogger don’t know what they’re talking about and continue to repeat the original Cap Times and Maddow statements instead of the quiet retractions and corrections.

        This is the kind of lying that doublethink requires. You’re telling a sincerely believed lie. You want very badly to believe it’s true, and you repeat it like it’s true, and you’ll defend it like it’s true. But deep down you know that you don’t actually have any idea what you’re talking about, and you’re just repeating something that was told to you, so you have to know in your heart of hearts that it may very well be a lie, but you don’t care. You continue to repeat it as true, because you believe you’re serving a higher purpose. But in this case it objectively is a lie. Orwell thought we would have to have this kind of phenomenon imposed on us by a malevolent dictatorship. Turns out egotism and tribalism combined with internet access are all it takes.

        You obviously refuse to address the actual issue, or explain to me why my analysis is wrong, so I think we’re done here. Feel free to continue to criticize Scott Walker. But if you’re going to criticism him for being a liar, you should probably make sure that you’re not also a liar. And you should definitely take the words “truth” and “journalism” out of your tagline if you’re going to continue to operate like this. Or, ya know, learn what you’re talking about instead of repeating other equally clueless people’s lies.

      • And you don’t even understand the irony of you equating what I write to “Orwellian.” Turn that judgemental mirror onto yourself and the entire GOP. What I write is not dictated to me by any party, campaign, or candidate – unlike Sykes, McKenna, Bader, et al. The fundamental issue is that for Scott Walker to claim that he “inherited” a $3.6 billion deficit is, indeed, a lie – and he knew it. Part of it was created by his own tax breaks, which went into effect immediately; lax DOR enforcement and investigations of audits; and the FACT that he used preliminary budget requests from state agencies which would have been drastically reduced as part of the budgeting process. He created and made a fiscal crisis worse – for his own political purposes. You fail to even acknowledge the restructured debt Walker “kicked down the road.” That is the fundamental issue. Until you acknowledge those facts, there is no point in continuing. You, and those like you, empower the austerity myth to endure – this false premise that a deficit is our mortal problem, and austerity is our only solution – as that is what Scott Walker stands for.

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