iwf recovery act_7_01_2010
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Fighting for Wisconsin Families
Summer 2010
INSTITUTE FOR
WISCONSIN’S FUTURE
www.wisconsinsfuture.org
Big Banks Crashed the EconomyBig 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 disappearedEqual 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 1960Equivalent 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
Road Repair
School Rehab Funds
for DAs
Food Stamps
More Unemployment
InsuranceTaxCuts
Funds for Teachers
BusinessLoans
Busesand
Trains
EnergySavings Rehab
River Clean
UpHealth Care
Cash for Clunkers
Farm Aid
Aid forElderly
MedicalResearch
SchoolLoans
ImproveAirports
ChildProtection
Veteran Aid
$$ forPolice
Housing for Disabled
Recovery Act funds helped Wisconsin manage its severe economic problems
Wisconsin’s unemployment rate
is slowly coming down
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 Recovery Act
Funding 2009-2010:$11 billion
Transportation, $582,400,000
Agriculture, $413,792,692 - 4%
Small Business Loans,
$463,000,000- 4%
Medicaid, $781,000,000
Health & Human Services,
$350,000,000 - 3%
Other, $506,402,400- 5%
Energy, $564,000,000
Education , $981,226,000
Direct Benefits, $1,340,000,000,
13%
Tax Relief for workers & business,
$4,600,000,000 - 44%
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
In Colorado Springs, every third streetlight is dark. Buses nolonger run at night or on weekends.
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 ….
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.
Public structures will disappear …unless we fight for them
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 ?
Meal sites for senior citizens
Independent living services for elderly blind persons
Senior community service employment
Home delivered meals for the elderly
Home health care
Why does this matter to our families?
Federal funds are vital to keep day care programs operating
Federal funds are needed to maintain school programs for children with disabilities
Without more federal aid, Wisconsin schoolswill lose over 2,000teachers and staff
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. 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$billions
US debt tripled under ReaganDebt 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 recessionToo many economic indicators are weak
20072007
20082008
20092009
20102010
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
Economicgrowth
20072007
20072007
20082008
20082008
20092009
20092009
20102010
20102010
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
We don’t want the fragile economic recovery…
…to collapse back into another recession.
Borrowing now, to support state and local governments and stimulate the economy, is the best way to prevent another recession and its destructive effects.2011
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
Campaign for 2011 Federal Aid
WI Recovers Popular Website
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