Republican Economic Policies Are Creating a Downgrade Frenzy In States Across The Country

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There is a fairly good reason most Americans do not allow their teenage children to have unrestricted access to the family’s finances or manage the household budget. It is likely the same reason that when parents send their child off to college, they put them on a strict budget with the proviso that when the monthly allowance is exhausted and the collegian need more spending money for books and supplies, they will have to get a part-time job. Many Americans have heard horror stories of new college students gaining access to a credit card and immediately throwing wild parties to impress their friends with no comprehension that without an adequate revenue source they will be unable to pay off their debt. One does not have to be Nobel prize-winning economist Paul Krugman to comprehend that sound financial theory and a healthy economy is predicated on adequate revenue as well as controlling spending.

Republicans typically have a childish, drunken-frat boy approach to economics and budget that prevents them from understanding the simple economic concept that revenue is an integral part of finance and budget. Americans with an iota of memory are aware that over the past few decades, it has been left to Democrats to repair the nation’s economy after Republican administrations run up unsustainable debt due to their opposition to revenue coupled with their childish habit of spending to impress their wealthy friends with tax cuts. Although many Americans are unaware of Republican economic ineptitude, credit rating agencies are not.

This week another Republican-led state, New Jersey, received two more credit downgrades from credit rating agencies S&P and Fitch that bring the total to eight downgrades since Christie took office in 2010. Christie’s economic ineptitude is not an aberration among Republican-led states, and New Jersey joins Kansas and Michigan as the latest states to attract attention of credit agencies. Standard and Poor’s downgrade followed closely on the heels of Fitch’s downgrade last week and in a statement explaining the action, S&P directly cited a common complaint against Republican-led states; “major revenue shortfalls” directly related to Christie’s refusal to fund the state’s public worker pension fund according to the law.

S&P explained their downgrade by noting that under Christie, “New Jersey continues to struggle with structural imbalance and the governor’s decision to reduce pension contributions in fiscal 2014 and 2015 highlights the fact that the state lacks the revenues to comply with its own agreed-on contribution to the pension system. In our view, the governor’s decision to delay pension funding has significant negative implications for the state’s liability profile.” Democrats, like Fitch and S&P, had already taken note of Christie’s economic malfeasance and said his administration was a “national embarrassment.” Democratic National Committee press secretary Michael Czin said, “From his failed economic record to his administration’s gross misconduct during Bridgegate, Chris Christie has failed his state time and again, and now, it doesn’t even look like he’s trying anymore. Instead of working with Democrats to solve the state’s long-term problems, Christie’s busy campaigning for Republicans who apparently want to emulate his failed leadership.” Republicans are not emulating Christie’s economic failures, they are simply following the long-standing conservative policy that revenue is of Satan the Devil and has no place in Republican economic policy at the state or federal level.

As has been reported here, another Republican-led state, Kansas, has suffered credit downgrades credit rating agencies has cited is due to devastating revenue shortfalls as a result of giving inordinately large tax cuts to the rich. This is after Governor Sam Brownback inherited a budget surplus he promptly squandered on tax cuts for the wealthy and corporations that were supplemented with an extra billion dollars Brownback promised would result in a job creation bonanza. Kansas trails the entire nation in job creation.

In Michigan, Republican Governor Rick Snyder’s so-called corporate business acumen has the state’s finances in trouble. In June, Standard and Poors and Fitch both downgraded Michigan’s credit outlook due to” softening in projected fiscal 2014 revenues, expected slow economic growth, and a decline in general fund revenues. S&P cited, like they did in Kansas and New Jersey, the lack of state contributions to distressed localities, pension obligations, as well as school districts due to revenue shortfalls. There was, as usual, plenty of revenue available for tax cuts for the rich and corporations though, like in Kansas and New Jersey.

Although he is long gone, while governor of California, Republican Arnold Schwarzenegger presided over several severe downgrades due to revenue shortfalls and out-of-control debt to fund tax cuts for the rich. In seven years, the debt tripled while schools, services, and roads went unattended that left a Democrat with a proper economic crisis to repair. Within a couple of years, a taxpayer-approved, and a miniscule tax increase coupled with new environmental regulations has the state economy in the black, the debt is being paid down, schools and roads being funded, and California leading the nation in jobs created and economic prosperity.

It is worth noting that in 2011 America’s stellar credit was downgraded for the first time in its history, and ratings agency S&P specifically cited Republican political intransigence and refusal to end the Bush-era tax cuts for the rich starving the nation of much-needed revenue. Throughout the fight to end Republicans’ largesse to the wealthy and continuing to the present, Republicans claim the country does not need more revenue, it needs to cut services, government, and let the nation’s infrastructure completely deteriorate because “America is broke.” However, the country is never too broke to give more tax cuts to the rich. In fact, Republicans are so vehemently opposed to revenue to fund America they fight tooth and nail to allow corporations and the wealthy keep their trillions offshore because according to conservative ideology; if the federal or state governments have adequate revenue they will spend it on infrastructure, education, disaster relief, job creation measures, and research and development.

The pattern is unmistakable; Republicans are ill-prepared to manage finances or an economy whether it is at the state or federal level and the reason is always the same; they oppose any measure to bring in any sources of revenue. According to their economic approach to finance and budget, any revenue or surplus from cutting government rightfully belongs to the rich and corporations they claim will increase revenue and create an economic Utopia. Despite their over-thirty year experiment in economic malfeasance, and Republican state after Republican state suffering economic woes, they are Hell-bent on continuing what they claim is running government like a business that will eventually go bankrupt so they can sell it off to their wealthy donors at a discount and watch them promptly drown it in a bathtub.

 

34 Replies to “Republican Economic Policies Are Creating a Downgrade Frenzy In States Across The Country”

  1. Republicans are unable to create realistic policy. They dont understand economics – look what Bush did – surplus to 10 T in the hole with 2.3 T missing(stolen by Halliburton). GOP trying to bankrupt USA, then try to blame Obama for their own failures.

  2. The “Policies” of The Republican Party are “Creating” a very real “HEAVEN ON EARTH” for their “Elite” (1%) Masters and a very real “HELL ON EARTH” For the “Rest of Us”. In my opinion.

  3. If they had to do it all over again, all of those Dems that voted for Christie would vote for his Democratic opponent.

    The GOP style of giving tax breaks/cuts to corporations/wealthy people doed not work! They are taking money away from a states economy. Some how they have not realized they need to bring income in that equals or is more than the tax breaks/cuts!

    This is why it is vital to elect a Dem in 2016 and we vote in November. The Republicans are a disaster for our economy.

  4. Just read about the town in Washington that took the minimum wage straight to $15.00
    per hour overnight. All the businesses were saying they would have to lay off staff
    and cut everything, Koch brothers spent millions trying to stop the raise, now 9 months after it took effect businesses are having to hire more people and a restaurant chain is opening more restaurants. Because guess what! People have more money to spend.

  5. Well, take the bankruptcy of Orange County Ca, Republican politicians dominated the area so they invested a lot in the S and L instead of rising taxes, so the county went bankrupt and the County there still feels it. The Republicans have gradually went down there.

  6. I seem to remember NJ getting a $50 Billion payola from the other 49 states for a natural disaster, and that was for waaaaay more than just the disaster. Plenty of pork in there from Obama. How can NJ be downgraded when it has such an advantage in free money, compared to the rest of the states? Must of really been f**ked up from the donkey blue NJ legislature all these years.

    We have a debt of $55,000 for every person in this country. If you think democrat policies will fix that, please tell us the mechanics of HOW they will fix it?

    http://www.usdebtclock.org

    “The more the plans fail, the more the planners plan.” – Ronald Reagan

  7. I just…. am I the only one who remembers Susan saying “it doesn’t matter if we run out of money, we’ll just print more.”

  8. The GOP govs are doing the bidding of their corporate masters so they couldn’t care less if things are bad for their state–as long as their rich donors get what they want. That’s ALL they care about.

  9. Susan Rice. My bad, thought I had typed her last name but my phone glitches so I can’t actually go back and read until after posting.
    My mistake.

  10. And yet there are people who still believe and insist that the Republican Party is the fiscally conservative party. The density of that thought is just mind numbing.

  11. Ok, lets place the blame where it actually belongs. Every one of the governors of these states have followed the blueprint laid out by the Koch brothers.

    Christy is just plain greedy and has used his office to enrich himself and nobody else. But these other governors, Brownback, Snyder, Walker et al apparently believed in the trickle down theory, that unions were evil and all the other garbage.

    It hasn’t worked because their corporate masters didn’t trickle down the money, they kept it for themselves and their stockholders. And the Koch brothers are laughing all the way to the bank to add to their billions.

    And this is proof positive that what was started under Reagan did not work, has not worked and will NEVER work.

    Unfortunately these willing dupes will never understand what they have done to themselves and how they have destroyed their states.

  12. Recently, I read a Kaiser article about insurance companies losing millions in KS’s privatized Medicaid system (Brownback & his buddies refused the ACA Medicaid expansion.) A KS news article mentioned that KS lawmakers voted to join the RW healthcare compact which would block grant and privatize Medicare, essentially taking it away from federal control, turning it over to Kansas lawmakers. State lawmakers passed these two bills, and Brownback gladly signed them into law. These two actions on Brownback’s part, plus the credit downgrades are what has the RNC sending someone to KS to try to help get him and Roberts reelected. The RNC is sending “advisers” to GA to help my loser of a governor, Deal, in his bid for reelection. I would think there would be no need for the RNC to help these candidates if GOPTP policies were the bees’ knees as they are so wont to claim.
    http://www.kaiserhealthnews.org/Daily-Reports/2014/September/10/state-medicaid-news.aspx

  13. Hard to believe but people in polls favor the Republicans to handle the economy in a fiscally responsible way. I can only surmise they choose to believe the propaganda the Republicans churn out, instead of financial reality. The Democrats have to do a way better job of getting their message out.

  14. Actually, when it comes to givers and takers as far as states are concerned, New Jersey gives more to the US than it takes. It is mostly the red states which take more than they give. You need to check your facts, not your faux.

  15. It is a proven (30 years worth) fact that trickle down economics does not work. You can’t give big tax cuts to the rich/corporations and expect that to result in job creation. People/corporations only hire more workers when there is more demand for their product. That can only happen when the middle class has money to spend on their products. The bottom line is that the middle class and poor have to have the money, not the rich! Economics 101. The problem is most people are not educated in economics enough to understand this basic principle and then vote against their own best interests.

  16. But Cheney said ‘the debt doesn’t matter.’ Under Clinton, there was a surplus, left to the Bush’ administration. He took that as a big gift, and handed out checks like confetti. Then, when it was all spent, he started two unfunded wars, got No Child passed, also unfunded, and Medicaid D, also with no funding. He and his GOP Congress spent us into a hole, from which President Obama has been climbing out. Our debt is now falling, and the result has been a loss of public sector jobs like teachers and firefighters, and still teh GOP whines about the debt. We will always have a debt…it really doesn’t matter. We are not a household or a business. We are a nation that has crumbling schools and roads, sewer systems about to burst, and bridges that will fall. Does the GOP care? Not a whit, until it happens in their state. They could have easily passed infrastructure bills to put people back to work and fix our country, but did they? Nope. Not one.
    So how will they pay for war?

  17. it is the gop tea party idiots thats the blsme in nj, the governor is gop so the buck stops with the governor,

    ps ur a looney tea party idiot o yes dems will keep us senate

  18. it is the gop tea party idiots thats the blsme in nj, the governor is gop so the buck stops with the governor,

    ps ur a looney tea party idiot o yes dems will keep us senate lol

  19. This somehow wound up as a reply which was unintended, so I’ll repost.

    It is a proven (30 years worth) fact that trickle down economics does not work. You can’t give big tax cuts to the rich/corporations and expect that to result in job creation. People/corporations only hire more workers when there is more demand for their product. That can only happen when the middle class has money to spend on their products. The bottom line is that the middle class and poor have to have the money, not the rich! Economics 101. The problem is most people are not educated in economics enough to understand this basic principle and then vote against their own best interests.

  20. Prove it with a link or you are a bald face liar. Better yet please tell us how a National Security expert has any weight in setting economic policy. Just a plain idiot you are

  21. Paul Krugman
    The great majority of policy-oriented economists believe that increasing government spending in a depressed economy creates jobs, and that slashing it destroys jobs—but European leaders and U.S. Republicans decided to believe the handful of economists asserting the opposite. Neither theory nor history justifies panic over current levels of government debt, but politicians decided to panic anyway, citing unvetted (and, it turned out, flawed) research as justification.
    I’m not saying either that economics is in good shape or that its flaws don’t matter. It isn’t, they do, and I’m all for rethinking and reforming a field.

    The big problem with economic policy is not, however, that conventional economics doesn’t tell us what to do. In fact, the world would be in much better shape than it is if real-world policy had reflected the lessons of Econ 101.
    http://www.nytimes.com/2014/09/15/opinion/paul-krugman-how-to-get-economic-policy-wrong.html?hp&action=click&pgtype=Homepage&module=c-column-top-span-region%C2%AEion=c-column-top-span-region&WT.nav=c-column-top-span-region&_r=0

  22. I think republicans are intentionally causing this harm to their states. For many years, the republican agenda has been to attack at the state level. They would do to all their states what they have done to Detroit. They would and they will because they want to keep Americans in poverty and not voting as much as possible as they dismantle our democratic processes in hopes of gaining the power to complete their agenda of creating what they call their new america.

  23. I wish that someone somewhere could give an
    informed opinion on the mid terms, I read on one site that it is sure the republicans will take the senate, on another I hear that the dems will keep the senate, with all of our modern aids for polling we do not have a clue, we know one thing for sure, the Kochs are going to spend big – already are in NC and the lies keep coming, sad that most of the people do not know they are lies.

  24. On my way to Florida, I noticed that it was pretty desolate between Atlanta all the way to Gainesville.

  25. First of all, when looking at polls, you need to realize who is conducting them. If you preach to the choir, you’re not enlightening many. The same applies to polling. If you poll mostly your own party, you will get results that look very favorable to you, but not necessarily accurate. Ask the Fox News talking heads about how that turned out for them in 2012. Polls are not always accurate and never use them as a sign of whether it is worth it or not for you to make your own voice heard. Vote!

  26. This was the most rational pieces that I have ever seen.My ownmethod of dealing with something like this isto find out who has commissioned the pole and never answer any questions that require a yes or no answer.Polls will say anything they want and frame the questions so there is only oneway to answer.Much like “are you in favor of motherhood and apple pie?”Most polls only want the answers they want and have little or no interest in your opinion.

  27. Republicans are not ill prepared to handle economic issues the right way. They just don’t want to. All they care about is giving handouts to the millionaires and corporations who finance their campaigns and themselves

  28. The DNC should create a national ad campaign, along the lines of the old “This is your brain. This is your brain on drugs. Any questions?”

    Only this time, it would be “This is America under the GOP (Kansas/Michigan/New Jersey). This is America under the Democrats (California). Any questions?”

  29. A very proud LIBERAL BLUE CALIFORNIAN

    “Although he is long gone, while governor of California, Republican Arnold Schwarzenegger presided over several severe downgrades due to revenue shortfalls and out-of-control debt to fund tax cuts for the rich. In seven years, the debt tripled while schools, services, and roads went unattended that left a Democrat with a proper economic crisis to repair. Within a couple of years, a taxpayer-approved, and a miniscule tax increase coupled with new environmental regulations has the state economy in the black, the debt is being paid down, schools and roads being funded, and California leading the nation in jobs created and economic prosperity.”

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