Iwf recovery act_7_01_2010
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  • It is important to remember how the recession started and what it did to all of us. Investment bankers triggered the great recession playing mortgage monopoly with our investments and pension money. The game exploded and we are all paying the price.
  • The recession hit the private and public sectors. When people lose their jobs – they don’t pay income tax.When the job market is tanking, people stop buying anything but necessities and sales tax revenue drops like a rock. When the real estate bubble burst – property tax revenue goes down. When these revenues shrink – state and local government lose the capacity to pay for crucial services.
  • The Recovery Act/stimulus stopped the job loss from getting worse. Looking at this chart, you can see the job loss numbers growing from 2007 to the beginning of 2009. After the recovery Act in February 2009, the job loss rate starts to get smaller and we are beginning to see hiring in mid-2010.
  • The Recovery Act is bringing Wisconsin $11 billion during the two year period – 2009-2010. A huge portion of that is through tax cuts to individuals and families. Many people didn’t notice this because the money was spread throughout the two years by reducing the federal payroll taxes. This was designed to increase spending. The child deduction amount went up as did credits for college, conservation and major purchases- homes, cars, etc

Iwf recovery act_7_01_2010 Iwf recovery act_7_01_2010 Presentation Transcript

  • INSTITUTE FOR
    WISCONSIN’S FUTURE
    www.wisconsinsfuture.org
    Fighting for
    Wisconsin
    Families
    Summer 2010
  • Big Banks Crashed the Economy
    Big banks brought down the economy by inflating the housing market, making risky loans and betting against their own investments – with our pension money
    Investors bundled thousands of risky mortgages, then divided them into loan ‘slices’ claiming they were a mix of strong and risky mortgages.
    These financial tricks put the whole economy in jeopardy. Federal regulators failed to intervene.
    The mortgage bubble burst and the recession ‘officially’ began in December 2007.
  • The Great Recession spread like an oil slick
    $15 trillion in personal wealth was gone
    Pension funds and other investments lost $50,000 for every man, woman and child in America
    $6 trillion in housing value disappeared
    Equal to the value of every house in every state on the Atlantic coast from Maine to Florida
    Unemployment topped 10% (15 million people)
    As if every man in America aged 50-59 lost his job
    40 million people in poverty—the most since 1960
    Equivalent to the total population in the thirty largest US cities
    Sources: US Census Bureau, US Bureau of Labor Statistics; US Bureau of Economic Analysis
  • State and local budgets collapseddue to lost revenues and increased needs
    Property taxes fell, as property values declined
    Sales taxes dropped, with fewer items purchased
    Income taxes plunged, with job losses and wage cuts
    Corporate taxes slumped, as business contracted
    The fiscal crisis in state and local governments is the worst in US history
  • $800 billion Recovery Act for 2009-2010
    Stop the job loss
    Help people in crisis
    Support business growth
    • Increase public investment on roads and energy
    Prevent devastating cuts to education and public services
    • Stimulate private spending –
    Tax cuts, Cash for Clunkers,
    Unemployment Benefits
  • Recovery Act helped end job loss
    Recovery Act funds kept job losses from getting worse.
    Federal aid helped keep state and local governments from collapsing.
    But job growth and economic recovery are still fragile.
  • The Recovery Act prevented a full-fledged depression in America, using millions of economic sandbags to hold communities together
    More Unemployment Insurance
    Business
    Loans
    Road Repair
    Buses
    and
    Trains
    $$ for
    Police
    Tax
    Cuts
    River
    Clean Up
    Improve
    Airports
    Energy
    Savings Rehab
    Health
    Care
    Aid for
    Elderly
    Funds for
    Teachers
    Housing for
    Disabled
    School
    Loans
    Food Stamps
    Farm
    Aid
    Medical
    Research
    School Rehab
    Cash for
    Clunkers
    Veteran
    Aid
    Child
    Protection
    Funds
    for DAs
  • Recovery Act funds helped Wisconsin manage its severe economic problems
    As the recession deepened, Wisconsin faced:
    • A multi-billion dollar budget deficit
    • Soaring unemployment
    • Rising demand for state and local social services
    Federal dollars helped patch the budget, create jobs and preserve critical services
    Wisconsin’s unemployment rate
    is slowly coming down
  • Wisconsin Recovery Act Funding 2009-2010:$11 billion
    Energy 5%
    Transportation 6%
    Medical care 7%
    Schools 9%
    Sources: www.recovery.gov; projects.propublica.org/recovery/; www.recovery.wisconsin.gov/
  • The Recovery Act helped Wisconsin families
    Gave almost every employee a
    $500 tax break in 2009 and 2010
    Saved 59,000 jobs
    Supported health care for
    1.3 million elderly, disabled
    and low-income families
    Provided $153 million in
    support for laid off workers
  • Huge state deficits will plague US for several years
    More federal aid needed to keep states functioning
    Source: Center on Budget and Policy Priorities
  • The stimulus money for states is almost gone and communities are heading for a funding cliff in 2011-2013
    Wisconsin faces a $5 billion deficit for 2011-2013,
    which means reduced investments in cities, counties and schools.
    The state has almost no added revenue sources for the next budget cycle.
    This could short circuit
    recent economic growth.
  • Some people don’t think we should invest in public structures—Be careful what you wish for
  • Public structures will disappear …unless we fight for them
    In Colorado Springs, every third streetlight is dark. Buses no
    longer run at night or on weekends.
    The police helicopters are for sale on the Internet. The city is dumping firefighting jobs, a vice team, burglary investigators, beat cops—dozens of police and fire positions will go unfilled. Parks workers removed trash cans, replacing them with signs urging users to pack out their own litter.
    Neighbors are encouraged to bring their own lawn mowers to local green spaces…Water cutbacks mean most parks will be brown turf by July; the flower and fertilizer budget is zero. City recreation centers, indoor and outdoor pools, and a handful of museums closed March 31. The city won't pay for any street paving ….
    Sources: Denver Post, CNN, CBS News, 5280 Denver’s Magazine
  • What’s in it for private sector workers?
    $700 million for road building and construction,
    boosting production of materials and equipment
    Airport Improvement Program $23,637,434
    Broadband Infrastructure Build-out $22,978,367
    Build America Bonds $97,367,700
    University of Wisconsin System $5,106,373
    State Broadband Development Grant Program $1,717,684
    State Highway, Local Road and Bridge Program $519,226,021
    Transit Capital Assistance $20,130,095
    WI Army National Guard $6,370,000
    Total: $696,533,674
  • Why should public sector workers care?
    Clearing the roads of snow, providing health care or ensuring public safety, public sector union members provide vital services to make communities work.
    BUT states are facing an estimated $260 billion shortfall in 2011-2012, which would mean the loss of nearly a million public and private sector jobs.
  • Why is this important for senior citizens ?
  • Why does this matter to our families?
    Without more federal
    aid, Wisconsin schools
    will lose over 2,000
    teachers and staff
    Federal funds are needed to maintain school programs for children with disabilities
    Federal funds are vital to keep day care
    programs operating
  • Those opposed to more federal stimulus aid
    claim the US can’t afford a bigger deficit
    US debt is the same percentage of the national economy as it was in 1950.
    It is large, but it is sustainable until the economy fully recovers.
    US debt tripled under Reagan
    Debt critics forget recent history;
    Conservative hero ran budget deficits
    Source: www.usgovernmentspending.com
  • Recovery Act spending accounts for a small portion of the deficit
    Most of the long-term deficit comes from wars, Bush-era tax cuts and the economic slump
    Source: Center on Budget and Policy Priorities
  • We can’t afford a double-dip recession
    Too many economic indicators are weak
    Borrowing now, to support state and local governments and stimulate the economy, is the best way to prevent another recession and its destructive effects.
    We don’t want the fragile economic recovery…
    …to collapse back into another recession.
    2011
  • Campaign for 2011 Federal Aid
    ORGANIZING to Press members of Congress
    Community meetings
    Talk about how the stimulus has helped and what will happen in 2011 without more aid
    Meetings with Senators Feingold and Kohl
    Meetings with regional Congressional reps
    Telephone, email and letters to Congress
  • WI Recovers Popular Website