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The real trickledown effect

Posted By Rob Schofield On May 2, 2012 @ 8:20 am In Uncategorized | Comments Disabled

Most people paying attention to the American economy over the least few decades are already well-aware that “trickledown economics” — the notion that if the rich are allowed to gorge themselves, significant wealth will “trickle down” to folks at the lower levels — is hogwash. As has been shown repeatedly [1], the gap between the rich and everyone else continues to grow at an alarming rate.

This morning, however, we do see compelling evidence of another kind of trickledown effect that is real; it’s taking place right here in North Carolina. This trickledown effect involves the state budget and its impact in the real world.

Here’s how it works: State lawmakers pay for unnecessary tax cuts and giveaways to the rich and corporations by imposing “discretionary” spending cuts on local officials. They then claim that they have “balanced the budget” without causing any harm. After all, they haven’t specifically eliminated any particular programs.

The trick, of course, is that the decisions on what to cut simply “trickle down” to local officials who then find themselves compelled to make painful decision after painful decision. 

In Wake County, for example — one of the state’s healthiest — the school board was forced to all but empty its emergency reserve [2] yesterday to make ends meet.   

And here’s an even more poignant, typical and less visible example: In Guilford County, the proposed county budget slashes $4.1 million from human services programs. As this Greensboro News-Record editorial [3] notes, these cuts ultimately trickle down to harm essential programs that help people:

“Consider one of the smaller line items, which denies a $25,000 request from Greensboro’s day center for the homeless, the Interactive Resource Center.

The IRC is a place where the homeless can receive mail, take computer courses, wash their laundry, craft resumes and polish their job-hunting skills. It links clients to mental health services and drug treatment. Many of its volunteers and permanent staff members were once homeless themselves.”

The bottom line: The trickledown economics practiced by the conservative General Assembly are real and do have real world impacts; they’re just very different from what the proponents would have you believe.


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URL to article: http://pulse.ncpolicywatch.org/2012/05/02/the-real-trickledown-effect/

URLs in this post:

[1] As has been shown repeatedly: http://thinkprogress.org/economy/2011/12/05/381984/oecd-income-inequality-increasing/

[2] the school board was forced to all but empty its emergency reserve: http://www.wral.com/news/education/story/11042790/

[3] Greensboro News-Record editorial: http://www.news-record.com/content/2012/05/01/article/editorial_unkindest_cuts

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