Lynn Parramore: The GOP Plan to Flush Your State’s Economy Down the Toilet

By Lynn Parramore, senior editor at Alternet.

The GOP has plans for a comeback. But it may cost you a lot. The idea is to capitalize on recent Republican state takeovers to conduct an austerity experiment known as the new “red-state model” and prove that faulty policies can be turned into gold.

There will be smoke. There will be mirrors. And there will be a lot of ordinary people suffering needlessly in the wake of this ideological train wreck.

We already have a red-state model, and it’s called Mississippi. Or Texas. Or any number of states characterized by low public investment, worker abuse, environmental degradation, educational backwardness, high rates of unwanted pregnancy, poor health, and so on.

Now the GOP is determined to bring that horrible model to the rest of America.

In Kansas, the Wall Street Journal reports that Governor Sam Brownback is aiming to up his profile “by turning Kansas into what he calls Exhibit A for how sharp cuts in taxes and government spending can generate jobs, wean residents off public aid and spur economic growth.” In remarks quoted in the same article, Brownback announced that “My focus is to create a red-state model that allows the Republican ticket to say, ‘See, we’ve got a different way, and it works.’ “

Brownback’s economic inspiration is Reagan-era supply-side economist Arthur Laffer and the folks at Americans for Prosperity, the conservative outfit backed by the deep coffers of the Koch brothers.

This new austerity talk focused on “fiscal innovations” is emboldening Republicans in other states that have been gerrymandered into submission to the GOP, including Indiana, Louisiana, Nebraska, Ohio, Oklahoma, and alas, my home state of North Carolina.

Republications have been eyeing the Tar Heel state with interest due to its recent swing status in presidential elections. The state was also the target of a gerrymandering strategy that worked out wonderfully for the Republicans, but not so well for democracy. Sam Wang, the founder of the Princeton Election Consortium, wrote recently in the New York Times about how Republican redistricting thwarted Democratic voters:

“Although gerrymandering is usually thought of as a bipartisan offense, the rather asymmetrical results may surprise you….I have developed approaches to detect such shenanigans by looking only at election returns. To see how the sleuthing works, start with the naïve standard that the party that wins more than half the votes should get at least half the seats. In November, five states failed to clear even this low bar: Arizona, Michigan, North Carolina, Pennsylvania and Wisconsin. … In North Carolina, where the two-party House vote was 51 percent Democratic, 49 percent Republican, the average simulated delegation was seven Democrats and six Republicans. The actual outcome? Four Democrats, nine Republicans — a split that occurred in less than 1 percent of simulations. If districts were drawn fairly, this lopsided discrepancy would hardly ever occur.”

The lesson of North Carolina tells you that the GOP red-state model is based, first and foremost, on efforts to flagrantly disregard the will of the people. NC’s discount-store mogul Art Pope, a longtime GOP donor and champion of free-market fundamentalism, has been appointed state budget director by the new Republican governor, Pat McCrory. In an incredible display of money buying political influence, Pope has gone well beyond his donor-counterparts in other states. Instead of just funding the politicians he wants, he has gone for direct rule by occupying government himself. Tax repeal is the centerpiece of his announced plans, but his hatred of public investment means he has much more than that in store for one of the most progressive states in the South. Pope is said to be more powerful than the governor, giving rise to the term “Pope administration” to describe the new political reality.

GOP pols are vying to out-do each other in extreme red-state programming. NC state senator Bob Rucho is pushing a plan to eliminate the state’s income taxes altogether. Such plans go hand-in-hand with calls for increasing the sales tax. Because low-income people pay a higher proportion of their income in sales taxes, abolishing income taxes and raising sales taxes shoves tax burdens onto them. Obviously, the Republicans will not give up on their passionate desire to cut taxes on the wealthy and stick it to the poor and the middle class.

Pope’s ideological opposition to public investment is ringing alarm bells. North Carolina, a state where progressives have fought conservative forces tooth and nail to achieve an enviable university system and a reputation for high-tech and research, is now in danger of being thrown into a period of regressive darkness. University of North Carolina sociologist Andrew Perrin put it this way: “Public investment is part of what has set North Carolina apart from our neighbors in the South.”

But Pope is hell-bent on turning North Carolina into Mississippi.

The GOP economic plans not only subvert common sense and the lessons of history (being played out right now in places like the U.K., where austerity has failed dramatically), they also flip a giant middle finger at the American voter. Unable to win support at the national level for their foolhardy economic programs, Republicans have turned their attention to state-level action because that’s where gerrymandering really works wonders.

Red-state model proponents claim that their maneuvers will spark economic growth. But that was basically what George W. Bush had in mind when he supported a similar program for cutting taxes on the rich. That didn’t work out so well, and increased the very deficits Republicans decry.

But here’s the really scary part. Slashing taxes, squeezing workers and throwing out environmental protections can indeed lure businesses to states where they won’t have to pay their fair share and can get away with all sorts of abuse. If a state like North Carolina promotes such policies, businesses from nearby states like Virginia may indeed move their operations down the road. Unless you believe in the “Confidence Fairy,” as Paul Krugman calls the naïve GOP faith that making everybody poorer is the way to become rich, then you know that what results is simply trade diversion, not genuine growth. In other words, one state’s gain is another state’s loss. The result is a headlong race-to-the-bottom whereby the states losing business will be pressured to slash their taxes and burden their workers and ordinary citizens, too. Nobody wins in that game — except the 1 percent.

The blue-state model, evident in high-income states like Massachusetts, has long been associated with high levels of state investments in education, transportation and other public goods. And guess what? It’s also associated with economic strength. The red-state model, on the other hand, is linked to backwardness, second-rate educational systems and economic weakness.

What the GOP wants to do is create an image-problem for blue states where taxes have been raised to balance budgets and continue vital services and jobs by crying “Look, Ma! No taxes!” in the states where they’ve taken control.

They’ll soon be able to say, “Look, Ma! No economy.”

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. ScottW

    Time to pack up and move back up North. For anyone thinking about moving to North Carolina, read up on Art Pope. Gov. McCrory recently stated UNC should reduce its liberal arts offerings, and if students want to take those kinds of classes, let them attend a private university. Thirty years of progress is going to be dismantled in four short years.

    1. Lambert Strether Post author

      The biggest donor to the University of Maine*, and a great benefactor throughout the state, especially for services that ordinary people need, like libraries and clinics, is Stephen King — from the much-reviled English Department and the much-reviled Humanities.

      * That is, until our last very expensive out-of-state President — latter shit-canned from UCONN for corruption — ticked him off. The best thing any state government could do for its universities is purge the administrators and refocus on the core mission of universities for the last two millenia: Teaching and research. Instead, the administrators collaborate with corporations to turn universities into vocational/technical institutions that, by some happy coincidence, merely reinforce current rental streams.

    2. Bill Clay

      Scott, having grown up mostly in NC and lived there off and on for a total of 30 years or so, I take issue with your estimate. McRory, Pope, and their puppets and thugs in the General Assembly are fixin’ to roll back about SIXTY years of steady progress that made NC the most enlightened state in the southeast. They’ve already made a good(?) start. I weep.

  2. Rehabber

    Like those thriving bastions of blue state success such as Illinois, Michigan, New Jersey, and California? And your success storey in Massachusetts has a 6.25% state sales tax (raised from 5% in 2009) along with the #9 ranking of property tax as a % of income. I’ll take Tennessee any day.

        1. hyperpolarizer

          Who fired the first shot at for Sumter?

          Given that the Civil War was fought over the question of abolition of slavery, you will not gain much sympathy here for complaining about the damage to Southern infrastructure resulting.

          Yes there is a lot of revisionist history about the causes of the Civil War, but any reading of contemporary accounts and deliberations will show that the slavery question was uppermost in everyone’s mind at the time.

          1. jrs

            Haha, much, probably most, of that infrastructure was build post civil war and not because it was destroyed by it.

        2. Kyle

          You’re poor, stupid, ignorant and on blue-state welfare because someone trashed your infrastructure 150 years ago? Way to take personal responsibility. You have a lot more in common with the slavery reparations movement than you’d like to admit.

        3. Lambert Strether Post author

          Well, at least we’re not using the money to force women to bear unwanted children, and we aren’t filling our textbooks with Christianist nonsense.

          We also aren’t yammering about personal responsibility and big gummint handouts and “ZOMG!!!! redistribution!!!!” while simultaneously sucking at the Federal teat.

        4. Lambert Strether Post author

          “Your infrastructure”?! You mean slaves, right?

          That’s what you’ve got to mean, since the Slave Power’s infrasture sucked, since all its capital was human, if they built railroads it was for export to the sea, and so forth.

        5. Yves Smith

          Maine gets more than its fair share of subsidies for:

          1. Military. Didn’t see how old the stats are, but until recently it had a huge airbase in Brunswick, recently mothballed. And the Bath Iron Works, which repair ships.

          2. Lots of roads. More roads per capita than any state.

        6. jrs

          I consider the net taker status of various red states to be buying them off so they don’t turn full on fascist. Not a bad deal in that case, I guess.

    1. David Lentini

      The point about Massachusetts and the other blue states is that you get better value. Yes, taxes are highter, but you also get more and better services that yield a stronger economy which means better wages–for you–and more opportunities.

      Want real low taxes? Move to Somalia!

      1. jonboinAR

        For whatever it’s worth, I live in a “red” state, Arkansas. Although it votes democratic a lot, it’s anything but liberal. The Democratic affiliation of the state appears to be mainly an artifact from the last century. I have no formal basis for comparing the relative benefits provided by a “red” vs “blue” state, but I have plenty of anecdotal experience. I moved here from the distinctly “blue” state in which I grew up and have been here several years.

        The standard of living here is somewhat lower. There are fewer services. There is less opulent consumption. Restaurants are crummy compared to what I was used to. Trailer houses dot the landscape. People do factory work in small assembly plants.

        There doesn’t seem to be much unemployment. Almost no factories closed during the recession. Houses lost no value, particularly, and there was no foreclosure crisis. Most people can afford a home here one way or other(actually afford the payments) if they put their minds to it. Houses cost about a 5th what they do on the coasts. I bought one no problem, for example. No way could I reasonably buy before.

        It feels a little like being in a different country. People tend to be quite a bit poorer, but there’s a pretty strong sense of community and a lot of mutual support, especially through the local churches. People wave at you when you drive by and you’re expected to wave back, whatever race or social level.

        There seems to be a fair amount of drug and alcohol abuse, particularly among younger people. Not more than I saw in my “blue” state, I guess. There’s some grandmothers raising grandchildren, the young parent trying get help, out of rehab or jail, attending church with the young family.

        Education ethic is poor. Football is everything. Young men coming out of high school go to the trade school to learn factory maintenance, typically, or go into farming.

        For information, it’s Fox News all the time. “Liberal” is an expletive. The federal government is responsible for most ills and is out to “take our guns.”

        I could go on. I don’t think I had a point. It’s interesting though, that materially poorer, life doesn’t seem more difficult here. There’s less fragmentation of society, not too much anxiety about “where I’m going to live,” or how. I guess a lot of that is because we’re not really actually poor for the most part, yet, here in the US.

        1. jrs

          The thing about the “wealthy blue states” is that wealth is often astoundingly unequally distributed.

    2. Wat Tyler

      Total state sales tax here in North Carolina is 7% (Varies slightly by county) with food taxed at 2% to assist low income workers. The GOP plan is to raise the tax and eliminate the food exemption in order to eliminate corporate and income taxes – mostly paid by the 1%. Adding about 6% to the cost of food in what is mostly a poor state is criminal but will probably be attempted. GOP control is new and helped by recent Democratic sleeze but ,if the GOP is seen as the party of tax increases (everyone buys food, few pay much state income tax), expect a backlash.

      Jim (70 year old lifetime Tarheel)

    3. G

      My first internship in Boston paid $15/hr, my next one $21 – All Before I finished a college degree. (finance)
      My friend studying music worked in production, through school, making $15-20.

      Do tennessee companies pay well, or do young people work for “experience”?

      Mass ranks #5 in median HH, while Tenn is #45 so I’m thinking it’s a state trend and not just me and my buddies.

      1. jrs

        median household income is pretty meaningless, it’s all about wealth distribution and cost of living. Is California a blue state? You won’t get no $15 an hour easily here.

    4. Dirk77

      California is indeed apropo. For thirty years after Prop. 13 was passed I’ve watched my state slowly spiral down. Hopefully Californians are close to getting enough data for this life experiment and 13 will be repealed, with a progressive tax structure once again back in place. Why humans can have such trouble learning from the experiences of others I don’t know. Good luck there in Tennessee. If you are typical, you’ll need it.

  3. Thisson

    How is it that lowering taxes equates to “squeezing workers”? Lowering taxes should: (1) reduce the burden on workers, as wage-income is taxed at very high rates (compared to rentier incomes such as capital gains); (2) reduce the nominal wage needed to support any given level of real disposable income; (3) reduce the cost of labor to employers via #2.

    Further, there are ways to reduce the regressivity of a consumption tax (for example, by exempting food, clothing and shelter, or by using a rebate/prebate).

      1. steelhead23

        None? Are you suggesting that congressional districts are not mangled by the party in charge to ensure it remains in power, even if the majority favors the other party?

    1. David Lentini


      (1) Your comparison of tax rates makes no sense. Why would you care about comparing tax rates between orindary workers and rentiers? So what if you lower the income tax rate of the ordinary worker to the renteir? The ordinary worker depends on public services far more than the rentier; so lowering the tax rate only hurts the worker who still can’t afford private schools and still needs public transportation, libraries, and clinics, even after the “tax break”.

      (2) & (3) See (1). Cutting the income tax rate will raise profits for the oweners, but raising sales taxes will also raise the cost of living. For ordinary people, the two effects will cancel.

      In the end, it’s a net loss for the ordinary workers.

      1. Thisson

        I’m not sure I understand what you are trying to communicate. My point is that the ordinary worker is burdened by taxation and thus a decrease in taxation benefits the ordinary worker. I don’t understand your point, because — obviously — lowering an ordinary worker’s tax rate makes them more able to afford things, including private school.

        I also disagree with your assertion that the ordinary worker relies more on public services than the rentier class. The rentiers earn profits off of public expenditures, selling things to the government or benefitting from government largess. For example, landlords benefit from increased property values when government spends money to improve public infrastructure in the area surrounding their real property.

        1. Lexington

          I’m not sure I understand what you are trying to communicate. My point is that the ordinary worker is burdened by taxation and thus a decrease in taxation benefits the ordinary worker. I don’t understand your point, because — obviously — lowering an ordinary worker’s tax rate makes them more able to afford things, including private school.

          The (painfully obvious) tradeoff you omit is that lowering taxes reduces government income, which must be paid for by cuts in public services. This is a bad tradeoff for the “ordinary worker” because the increase in income they realize from tax cuts will be trivial compared to the value public services withdrawn – that’s the whole reason these services were public in the first place. And yes, education is a stellar example.

          The beauty of public services is that they are redistributive – rich people get the same service but effectively pay more for it in order to subsidize poor people. That’s exactly why the rich hate them so much. “Ordinary workers” on the other hand realize a disproportionate benefit – they pay a bit more in taxes, but comparatively get a lot more in services.

          It’s really not that complicated to anyone who isn’t willfully blind to the truth.

          I also disagree with your assertion that the ordinary worker relies more on public services than the rentier class. The rentiers earn profits off of public expenditures, selling things to the government or benefitting from government largess. For example, landlords benefit from increased property values when government spends money to improve public infrastructure in the area surrounding their real property.

          This is simply sophistry. You are deliberately conflating benefits from public POLICY with benefits from public GOODS, which is mixing apples and oranges. Public GOODS refers to tangible goods and services delivered at public expense – schools, parks, health care, old age pensions, etc. For reasons that have already been explained public GOODS disproportionately advantage low and middle income earners over high income ones.

          The fact that public POLICY, broadly understood, can (and often does) advantage the interests of rentiers over “ordinary workers” is an argument against the inequity of many public policies, not against public goods.

          You also posit a false dichotomy. Often a policy can benefit BOTH rentiers and ordinary workers, as in the case of your example of government spending on infrastructure improvement. In that case ALL property values are raised, those of owner-occupiers no less than those of (presumeably absentee) landlords.

          1. Thisson

            Lexington, thank you for proffering a cogent argument. However, I respectfully disagree with your premises.

            Primarily, I disagree with your assumption that ordinary workers get more value back in services than they pay into the system in taxes. This is because services themselves are only a fraction of expenditures – the vast majority of taxes are wasted via bloat, bureaucracy and fraud.

            I accept that ordinary workers get proportionally more benefit from public spending than high income earners, but I dispute that there is a net gain. The majority of gov’t spending does not go back to ordinary workers in valuable services. Instead, it gets channeled to special interests (such as vendors, construction companies, etc. whose profits go right into the pockets of the rentier class).

            I think if you polled the ordinary workers and asked them which they would rather have, X dollars back in their pockets and no gov’t services, or to pay the X dollars and have the gov’t services, they would choose the money. Unless your term “ordinary worker” is really a euphamism for the welfare class?

            I also think you’re drawing an artificial distinction between public policies and public goods, since it is the policy decision that results in the provision of goods.


          2. Me

            Thisson, you argue as if we have no evidence, as if there wasn’t something called the 20th century.

            “The majority of gov’t spending does not go back to ordinary workers in valuable services.”

            Is there only waste in the government delivering services? I would argue that profit, and the profit market up price, is waste. Executive pay is waste. Marketing costs are waste. The usually much higher administrative costs seen in privately delivered services are waste. We should ditch the idea that there is a perfect system free of waste and inefficiency. All systems have their own inefficiencies and there is no way in hell you could tell me that privatization programs the world over in recent decades has improved efficiency as far as the delivery of services. Sorry, that is absurd. By the way, the classical economists would also call that stuff waste. The neo-classical economists would too. They always assume perfect competition. When that unrealistic assumption is taken away their own theories predict massive inefficiency and waste.

            “I think if you polled the ordinary workers and asked them which they would rather have, X dollars back in their pockets and no gov’t services, or to pay the X dollars and have the gov’t services, they would choose the money.”

            They might if they had no knowledge of economics or economic history. Again, it isn’t like we don’t have experience with these issues. Look at polling data of the privatized pension system in Chile. The vast majority of people want the state to administer the pension system. Even conservative politicians, including recent presidential candidates in Chile, are acknowledging this and want the state to take on more pensioners. Chile is the freaking model for pension privatization and look at what a failure it has been. I read an article recently on the privatized train system in Chile. It needed to be bailed out and was operated horribly. Who bailed out the privatized train system recently in Chile, a few years ago? The STATE train system, which was run more efficiently. The train system that was funded largely by tax dollars, that one. They have experience with privatization, they can now compare it to the former system, compare it to systems like ours and they don’t want “x dollars in their pockets” to pay more for more inefficient services delivered to them at a much higher cost. The same goes with Argentina, people there were asked about their experiences with privatization. They had similar opinions. Water privatizations have been disasters, the railways that were privatized in England have been a disaster, the mass privatizations in Russia were disasters. On and on. Let’s pretend though that reality and economic history doesn’t exist, let’s talk about this in the abstract.

            Latin America has more experience with that horrible model than any other. Take a look at this poll, how has it worked out for the people there? What are their opinions as far as who should handle basic services, the state or do the market (in other words, do they want x dollars in their pocket instead)?:


          3. different clue


            Ordinary-person car-drivers might enjoy a permanent gas-tax holiday for a while, but when the missing gas-tax money deleted from road maintainance and repair adds up to so many more potholes that the ordinary-person car-driver spends more money repairing damage from heretofor-prevented potholes than what the ordinary-person car-driver saves on gas taxes not paid anymore; then the ordinary car driver will not enjoy the gas tax holiday any more if he/she understands the connection between a hundred dollars less gas tax per year as against 200 more dollars spent on car repair in the same year.

    1. JEHR

      Well, dcblogger, we Canadians would welcome any Americans that want to come North, but first check out our Prime Minister who is hell-bent on putting in place republican-like policies: elimination of environmental laws, lower taxes for corporations, omnibus bills passing laws without much discussion, greater austerity and a balanced budget by 2015 (when the Conservatives have to run again). We are about 10 years behind the US of A!

    2. jrs

      Somehow an economy built on tarsands doesn’t seem that sustainable long term either. Really we need a better plan.

    3. Lambert Strether Post author

      That’ll work ’til “we” invade them and take their oil and water. Heck, they’re socialist, so we’ll be doing Gawd’s work by invading them. Also, too, French.

  4. Sufferin'Succotash

    This is a classic example of the old joke where the economist is trapped on a desert island with nothing but an unopened can of beans and his solution to the problem is: “Assume A Can Opener”.

  5. rob

    Thanks for doing this article.
    I have been thinking lately that north carolina iis something people should watch. It is like a pietri dish, right now.What happens remains to be seen.but…

    The republicans just took over the state assembly for the first time in 100 years.The first thing this bunch of bums preaching fiscal conservatism did was to vote themselves an 8% pay raise.
    This was happening as they saw fit to cut unemployment payments.While on one hand they ended extended unemployment payments, they also raised the tax payments on business.I think, as this is all happening as we sit here.I can only guess that big business like art popes, whose family owns stores like “roses”,and “maxway”, and 6 others.will have a loophole so as to not be stuck like the majority of smaller business will be.They are now working to get the maximum unemployment payment set at $350.Which could be considered prudent,in a certain light… but I can’t see these republicans in NC as doing anything that will make sense.These people ,when faced with unemployment rates among the highest in the nation, put their time to amending the state constitution to ban gay marriage.
    Now they are fast tracking rules to allow fracking.
    and pat mccrory, the former mayor from charlotte, past/present lobbiest for duke energy…is all about drilling off the coast.
    allowing duke/progress energy to remain their own rule makers when it comes to nuclear energy,rate hikes,and anything else they want despite what the NERC, and the various commissioners have to say….He is appointing “better” ones right now.
    North carolinians have been given to the pigs for supper.We will see how this all turns out….mostlikely compost.

    1. PaulArt

      What depresses me more than what the GOPers are doing is how come they are still getting 49% of the vote? Am I to assume that 49% of the people who voted GOP all have secure jobs, good health insurance and believe the rest are moochers?

      1. jake chase

        Perhaps the voters have noticed out that Democratic candidates are all windbag sell outs, so they might as well vote Republican and get lower taxes?

      2. Code Name D

        Because Democrats agree with the Republican argument and that tax cuts do grow the economey. Hell even Obama thinks its a good idea.

        What are people supposed to think?

        1. Andrew

          Tax cuts do grow the economy, iujut increases national income. Increased spending also grows the economy, it increases national income.

          The real problem is both sides agree with incorrect economic analyses that propose to reduce Government deficits. If the deficit is reduced it reduces national income.

          This terrible bogeyman of the national debt is really just a tally of surplus Government spending that has accumulated in the coffers of the 1%. Yes they seriously do want to bite the hand that feeds them.

        2. Andrew

          WTF….(Self check fail)………Tax cuts do grow the economy, it increases national income. Increased Government spending also grows the economy, it increases national income.

          The real problem is both sides agree with incorrect economic analyses that propose to reduce Government deficits. If the deficit is reduced it reduces national income.

          This terrible bogeyman of the national debt is really just a tally of surplus Government spending that has accumulated in the coffers of the 1%. Yes they seriously do want to bite the hand that feeds them.

          1. Code Name D

            No, tax cuts do not grow the economy. There is no data that says otherwise, and a great deal of data that suggest a high progressive tax rate contributes to a stable currency and income equality, essential conditions for a stable economy.

            Tax cuts shift the tax burden on the poor, and the poor are extremely sensitive to economic down turns and other forms of economic stress or shocks. This makes government income equally vulnerable to economic down turns, and eventually leads to budget deficits. For non-fiat states, they have no choice but to cut spending, thus triggering an austerity death spiral.

            Tax cuts do not create jobs. Jobs are only created when there is an increase in consumer spending. Why would a company hire additional workers if there is no additional work for them to do? They simply take the tax savings and gamble it at the great casino known as Wall Street, which produces far larger returns than real world investments.

            The US has some of the lowest effective tax rates in the world, and it’s still dropping thanks to annual tax cuts intended to rescue the economy. Yet job creation remains quite anemic.

            Tax cuts for the wealthy create huge reserves of currency that essentially removes from circulation. Add to that austerity, which clamps down on injections of additional capital from the fiat-states, and you get currency shortages, which leads to depressions.

  6. Paul P

    With the continued growth of transnational corporations, financial and trade liberalization, WTO, IMF/SAP, Free Trade, and now the stealth TPP, we have a development where the US middle class is no longer the only consumer important to these corporations. So, the US middle class can be destroyed. This underlying restructurng of capitalism is the backdrop on which the No Nothing right attacks the living standards, labor rights, and social progams of the 99%.

    Taking away the vote is part of the program.

    1. Gaylord

      That is a clear explanation of how globalism impoverishes workers/labor. The theft of resources part is more complicated because it gets into the dark side of military actions and clandestine ops. The basis for all of the exploitation is the monetary system, which is bound to collapse, and it will take a lot of us poor mortals with it.

  7. briansays

    ah yes Texas
    the state that gave America Phil Graham for well over a decade one of the top 3 humans responsible for the second depression

    1. Lambert Strether Post author

      Well, and to be fair, Ralph Yarborough, Ann Richards, Barbara Jordan, and Lyndon Baines Johnson, who despite the imperial disaster of Vietnam — thanks, Best and Brightest! — was still a titan, especially compared to the politicians of today. Yes, I’ve read Robert Caro.

      Adding… Yes, the inheritance of slaveocracy in local oligarchies is horribly corrosive…. But there are people who fight against it!

      1. jake chase

        LBJ was owned by Haliburton and Bell Helicopter. Viet Nam was not his mistake, it was his mission.

    2. Casteelk

      Lived in Texas most of my life, and yes the politics are slicker than the oil there. But it works there for many reasons, being the state supports the business there, offering low (or now) tax burdens on companies. They make up the difference in the employees and what they contribute. Everytime I go back to Dallas, I am amazed at how they continually are looking around and going, “what, there was a crash in 2008?”. I like the free market. Why can’t we have that, why do we have to have the government make all our decisions?

      1. Lambert Strether Post author

        Seems to me that conservatives are perfectly happy to have goverment make decisions as long as the decisions make children grow up stupid by being taught out of Christianist textbooks, and treating women as a captive breeding population by forcing them to bear unwanted children.

        1. Thisson

          You could make a pretty similar point about liberals, Lambert. Both groups want to control the machinery of the state.

          1. Thisson

            No, I’m saying that it seems to me that liberals are also perfectly happy to have goverment make decisions as long as the decisions make children grow up stupid by being taught out of Christianist textbooks, and treating women as a captive breeding population by forcing them to bear unwanted children. Liberals are happy to have government make decisions. They are happy to have uninformed students graduating. They are happy to have revisionist history books. And they are happy to treat women as a captive breeding propulation so long as they vote democrat.

            The so-called conservatives are no better, they just want the masses to vote red instead of blue.

        2. Casteelk

          Agree with that, I don’t understand that weird religious crap and treating woman like they have no voice, it what keeps me from picking the Republican side of things. If Republicans could ever get rid of those wackos, they might get some votes one day.

      2. Texantoo

        What my fellow Texans forget is the boom in natural gas and oil drilling due to fracking technology. That is what has kept the state going during the economic crisis and resulting depression. If not for that, we’d be in terrible shape.

        1. jabre


          Here’s the link to the state revenue details for 2010 Oil and Gas is a drop in the bucket (pun intended). There may be some income helping out the valley and parts of Houston. But the prime economy across most of Houston, San Antonio, Austin, DFW and elsewhere finds little impact from O&G other than the benefit of low cost commercial electricity from gas-based generation.

          1. Lexington

            That’s just a link to a bunch of financial statements.

            Could you please point out exactly which statement says that income from the oil and gas industry is “just a drop in the bucket”?

      3. Code Name D

        But my question to you is how would you know unless you lived in a state with an alternitive policy for a time? The truth is that you have no idea how bad you have it, because you have no other point of refrence to compare it too.

        Do not take this as an insult, because it is not and insult, but what you see and feel and be deceptive.

        This is why we need science.

        1. Casteelk

          Well living in Texas most of my life, now living in Arkansas 6 years now (both red states), its night and day. Arkansas taxes the hell out of everything, never ever bids on big companies to give tax breaks, therefore getting nothing. 80% of employment in this state is government. Arkansas is poor, Texas is rich. Its not oil baby, its policy.

      4. Kyle

        There was little crash in housing prices in Texas because the government (horrors!) instituted stricter regulation of mortgages after the hog-wild S&L crisis of the 80s (in which the rest of the country bailed out Texas banks to the tune of $100 billion. You’re welcome.) Hardly a credit to the deregulation ideology of GOP fantasies.

        That, and the fact of living in a flat, ugly landscape with hundreds of miles of scrub in every direction tends to keep land prices low.

        1. AC

          General Philip Henry Sheridan – “If I owned Texas and Hell, I would rent out Texas and live in Hell”

  8. Edwardo

    and Alabama the place where Carnival will pull their ship in tonite under darkness.”

    Make that their ship full of shit.

    In the main, one is confronted with purveyors of disastrous schemes on both sides of the aisle. The Republicans are primarily shills for corporate rapists, and the Democrats are hell bent on preserving a system that absconds with the public’s money to maintain government fiefdoms which are best exemplified by revolving door jobs for those who are generally unemployable outside the realm of the civil service and bloated, parasitic pensions. Mississippi is a desperate model, but, so then is it’s none to distant neighbor, Illinois.

  9. craazyman

    Holy Cow, it sounds like South Carolina is taking over North Carolina. This is ridiculous.

    I’ve found people from North Carolina are usually smart, attractive, ethical and interested in the arts & humanities, while South Carolina rednecks are dumb-as-a-gun nut drunks, when they’re not inebriated and watching Nascar stoned or thinking about the Confederate flag.

    I don’t think this can happen in real life, it’s probly just a case of journalistic anxiety.

    1. Wat Tyler

      For 50 years I joked that the unofficial motto of North Carolina was : “We’re not South Carolina”.

      Sadly no more. Terry Sanford must be turning over in his grave. I expect the GOP to overreach so the Art Pope engineered private equity takeover of NC could be short lived.


      1. Late to the Party

        Winston-Salem. Pretty much true. ‘Course might be cuz I’m frum theiyre. (It does sometimes call itself the “city of the arts,” so at least I have the PR people on my side.)

  10. david c mace

    this article i on point and yet the analysis is somewhat confude
    congressional re-ditricting has bugger all to do with pushing through state level austerity

  11. Casteelk

    As long as you make food tax free (which red states are), then abolishing the idiotic soul sucking state in-come tax, keeping sales tax in a good 8% range, and jack up property taxes, it does work. I don’t see how this puts the burden on the poor. Their property taxes will be lower, they won’t buy excessively expensive garbage, so sales tax isn’t bad, and keeping that extra income the state steals, gives them more money in their pocket. Middle class and upper middle class like the high property taxes, as it keeps their neighbors cozy and comfort with their own type Jones.

      1. Casteelk

        Don’t be coy. You know the poor buy the crap they shouldn’t. I see them at Walmart and the Dollar store, racking up $200 of junk food and useless items they don’t need.

  12. Jardinero1

    The problem with comparing blue state public expenditure with red state public expenditure is that there is a tacit assumption the additional expenditure is actually delivering real services to the tax paying public. Nothing could be further from the truth. Most of the differential in additional public expenditure in blue states is devoted to inflated municipal payrolls and pensions not on public works or public services. You can compare infrastructure in Texas to infrastructure in Illinois or California and you will find that it is much better maintained in Texas. Yes Texas municipal employees make less than there counterparts in blue states and their pensions aren’t as generous, but for the most part, we are still hiring public employees in Texas and their pensions are better funded. Texas municipal employees are not bleeding the state coffers dry as they are in California and Illinois. Also red states deliver something that blue states don’t which are employment growth and a cheaper cost of living.

      1. Thisson

        Capping property taxes is one of the only sane things California has done. There would be plenty of money for infrastructure within the existing tax base if the politicians made infrastructure a spending priority. They have chosen to spend the money buying votes, instead.

      2. Jardinero1

        It’s a matter of priorities. California has the highest tax burden of any state in the union. It chooses to spend the money on municipal salaries and pensions and ignore infrastructure.

    1. JTFaraday

      It is true that Republicans in blue states are all about enhancing the places they live to suit their lifestyles and to up their property values. Thus, lots of money does go to contractors.

      It is also true that since they run local governments, they don’t view then as the enemy and, as a result, they don’t target the pay and benefits of the nominal public servants. At least not the ones with some claim to professional status, with whom they may even find themselves socializing.

      I can see how people outside these little government clubs might come to view them with some skepticism.

      1. JTFaraday

        I suppose I should say so-called “blue” states.

        It should be revealing that MA pioneered the punitive low wage worker beating Obombneycare, but for some reason Taxachussets is some sort of “liberal” sacred cow.

  13. Jeff

    The bias of this article is obnoxious. There are some good points, but this is the lowest form of journalism. NC used to be better than this, I hope it can be again. Yves, please take control of this site back.

    A long time reader, hoping to continue.

    1. Wat Tyler

      I beg to defer.

      As a 70 year resident of North Carolina (Raleigh,Wilmington) and my Mother’s family going back as far as I know (Franklinton), the GOP takeover is the most important state political event of my life. Nothing comes close to the magnitude of this change ; mostly the result of national activity such as Citizens United. Big money will come to every state and focus on state House and Senate races where Democratic candidates have limited budgets.

      Everyone should Google “Art Pope” and see how big money bought NC before the process reaches your county. Don’t be distracted by national or state wide elections – the local level is where big money is taking control.

      I don’t think it is hyperbolic to say that democracy is at stake.


      1. Jardinero1

        Republicans never took over. Throughout Texas and the South, voters simply abandoned Democrats, because the Democrats did not represent their interests. In Texas, Rick Perry, Bill Clements, John Connally, Phil Graham were all Democrats once. I am sure many prominant North Carolina Republicans were Democrats once too. The fact is that, historically, Southerners will tax and spend on infrastructure. They will not tax and spend to support state and municipal salaries. When the Democrats became the party of public employee unions, among many other things, southern voters abandoned them.

        In the last campaign season, Democrat candidates, nationally were funded better than Republican candidates. More big money is behind Democrats than Republicans. Be careful what you wish for. You wouldn’t want to level the playing field for Republicans.

          1. Wat Tyler

            Absolutely. When I was growing up during the fifties there was no Republician party in NC to speak of as Lincoln and the carpetbaggers had been Republicians – the Democratic primary was ,in reality, the general election. This changed in the 60’s when Democrats became the civil rights party under LBJ. This was half a century ago.

            Attitudes didn’t change only party affilitation.


          2. Jardinero1

            Southern Democrats did not support Civil Rights. No southerners left the party because their Senator or Congress person supported civil rights because most likely their Senator or Congress person did not. This also begs the question that every southern voter did not support civil rights.

            Many Southerners left because of the broader party’s position on on War, communism and social issues in general.

  14. Jagger

    Bobby Jindal in Louisiana has been checking off all the boxes to complete his radical right resume for the 2016 elections.

    He intends to eliminate the state income tax and not sure how he is going to replace it-probably increase sales tax or maybe not replace it all. Healthcare has been his major target which has aroused a lot of anger. He has fired large numbers of doctors and nurses in the LSU medical system as well as eliminating beds. He has also sold off the Northshore Mental Facilty to private interests and I think one other in another part of the state. Although he did go a bridge too far when he decided to elimate hospice care for the poor. Despite much negative comments in the state, he was going full speed ahead and damn the torpedos until the news went national and very negative. Suddenly he changed his mind. The next day or two afterwards, he gave his speech about how the Republicans can’t continue to be the party of the stupid. Wow… What sort of heartless politican could possibly eliminate hospice care for the poor-only a really, really stupid one. And next time he runs for public office, his opponent will undoubtably bring up the elimation of hospice care.

    His approval rate in Louisiana has plunged to 37% as of today. Despite his huge ego, I can’t imagine him winning a national office. I doubt he could even win another public office in Louisiana. His best hope is some sort of cabinet position. I think he is finished here in Louisiana but he has put together a very impressive radical right resume at the expense of Louisiana citizens.

    1. Lambert Strether Post author

      The Republicans may be the party of stupid, but that doesn’t make the Democrats the party of smart. I’d say the Democrats are more the party of low cunning. They prefer the con to outright violence.

      1. John F. Opie

        A century of Chicago politics shows what the Democrats are aiming for. After that, there will only be two kind of folks left: those within the system (“who sent you to me?”) and those who don’t care as long as the roads are plowed and, so to speak, the trains run on time.

        Corruption, thy name is Democrat.

  15. rotter

    The “red state model” (ahhhem)will only ‘work”, that is it will only function as the austerity barons wish it to, if “leaders” such as obama and the rest of the washington outfit continue to starve states of more and more funding. That is send less and less to the states. This will only work if state govenors and state legislatures agree to go along,. I dont believe they will, not in the end.As it was pointed out in the first or second paragraph of this piece, “red states” already are models of bad govt and bad policy. Unlikely as it seems I kind of hope they go forward with it ,these red state rugged individualists…..the more the ordinary rank and file biggots and hoarders who elect these clowns suffer, the more of them will be forced to re examine thier biased, pre-decided opinions and THATS what needs to happen on a grand scale before anything can change for the better.

  16. JohnL

    Blue state Washington has no state income tax and an 8-9.5% sales tax depending on county or city. Property taxes a fraction of NJ and still decent public services. Can be done in a blue state too.

  17. Skippy

    Ahhh… the rubix cube of red, blue, or ambiguous white, yet the plan is to make someone[s pay for it, just not *I*.

  18. The Gizmo51

    Perhaps would be a good idea to choose one state (as long as it’s not the one I live in) to setup a completely transparent austerity program explaining what and how they are doing as it develops complete with facts and figures. This would prove to the world how foolish and ridiculous this whole nonsense is and defeat it once and for all so we can forget about it and not have to fight against it anymore. However,on the other hand, during times of prosperity and abundance austerity should be implemented with positive results to prevent a bubble in the economy and everyone’s lives.

  19. different clue

    If the Right To Organize forces cannot reverse and rescind Michigan’s newly passed and signed so-called “right to work” status, Michigan may pioneer a new category which could be called “Frosty Red States”. The MI legislature’s desire to repeal “prevailing wage” laws for governmentally-contracted infrastructure work in Michigan are also designed to degrade Michigan to Frosty Red status. Snyder feigns “lack of interest” in it for now because he wants to trick Democratic legislators into working with Snyder on certian Snyder items. If our Dem legislators are “real” and “mean” they will permit the Rep legislators to send “repeal prevailing wage laws” legislation to Snyder’s desk FIRST before ANYthing else to see if Snyder signs it or vetos it. If Snyder signs it, they can then obstruct every Snyder item to the best of their ability. If Snyder vetos it, they can help Snyder with ONE Snyder item and then let the Rs send “repeal prevailing wage” to Snyder aGAIN to test Snyder aGAIN. Each time Snyder vetos it, the Ds can help Snyder with one more Snyder item. (Because a few of those Snyder items might be desirable on their own to Democrats. But make Snyder earn that co-operation all over again for each single item or sub-item.)

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