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Advocacy Executive Director's Reports Main Street needs partnership, not a bailout
With the nation enduring massive Wall Street failures, a flood of housing foreclosures, rising unemployment, decaying infrastructure, and staggering energy bills – and an economy that sure feels like it’s in a recession – most people just want to know when the bad news will stop for a while.
Instead, it seems as though this wild roller coaster ride will continue, tossing victims at every turn, the tracks all heading down, with no climbing spots for a rest or recovery.
With billions of dollars of capital in jeopardy, suddenly Wall Street is jumping off the ride and onto the bailout bandwagon, clamoring for the federal government to step in and rescue them from their risky investments. Forget the Swaps, SIVs, and short-selling, let’s talk about $700 billion (in addition to the billions more to save Fannie Mae, Freddie Mac and AIG) in taxpayer guarantees. With urgency in their voices, the free market institutions are explaining away their newfound love for government support by declaring that this is an unprecedented crisis.
This is not a bailout, they say, it is a necessary step to shore up the fundamentals of our economy.
Well, let’s talk about the other fundamentals of our economy that we need to get us back on track: our roads and bridges, our schools, our parks and libraries, police for our streets, firefighters and emergency responders for our homes and businesses, affordable housing for our neighbors, licensing and permitting for our small businesses, zoning and planning for our economic growth and development, training and retraining our workers for good jobs, and so much more. All this happens right on Main Street. And this work is done by the cities, towns and villages of our country.
Wall Street may be a center of wealth and fortune, but Main Street is what builds our nation’s economy and ensures prosperity and a high quality of life for our families and residents.
For years, the federal government has balked at calls to invest in Main Street, even as local resources have been insufficient to maintain the programs and services at the level we need. In spite of great attention to this downward slide, cities and towns have mostly been on their own.
To those on the front lines of local government, it is stunning to see the federal government drop everything and immediately dedicate more than $1 trillion to Wall Street institutions.
Communities haven’t called for and don’t want a bailout. We want a partnership to jointly invest in the true fundamentals of our economy. Imagine the power of $1 trillion to aid our cities and towns, invested on Main Street to rebuild our economy and address the critical needs of our residents.
The ugly fact is that the nation needs to bail out Wall Street in order to prevent our recession from turning into a depression.
We see the early signs that this nationwide economic debacle is finally hitting Massachusetts hard. Beginning this summer, state tax revenues slowed substantially and appear to be far below their target levels. With a state budget that was already out of balance by $1 billion because of softening revenues and higher expenses, mainly for the landmark health insurance access law, this tax slowdown is very bad news.
The state originally counted on receiving $1.8 billion in capital gains taxes, and now it’s hard to believe anyone is making money on their investments these days. If our economy loses jobs and retail sales sag even more, our income and sales tax bases will erode. Finally, the corporate excise tax is not yielding expected revenues, in part because of over-projections and in part because of the recession.
What started out as a $1 billion state budget deficit could grow to $2 billion or more, plunging the Commonwealth into near fiscal chaos. The governor is now threatening deep mid-year cuts in state accounts and says he may need the power to get at all parts of the budget, including local aid. The MMA and municipal leaders know that Massachusetts cannot afford to relive the days of early 2003, when similar reductions triggered a fiscal crisis in cities and towns, a crisis that endures today for too many.
If the national economy cannot be stabilized, then Massachusetts will see a repeat of the dismal 1989-91 and 2001-03 recessions that brought us deep cuts and long-term dysfunction.
For this reason alone, the Wall Street bailout is necessary. But let’s remember the lesson. The federal government and our state colleagues need to work in partnership with cities and towns in every corner of the Commonwealth. The president, Congress, and state leaders need to protect their true economic partners.
If we can find $1 trillion for Wall Street, we should be able to invest enough to get our communities back on their feet and moving forward again.
After all, Main Street America runs right through every city and every town in every part of Massachusetts.
Advocacy Executive Director's Reports Main Street needs partnership, not a bailout
Main Street needs partnership, not a bailout
With the nation enduring massive Wall Street failures, a flood of housing foreclosures, rising unemployment, decaying infrastructure, and staggering energy bills – and an economy that sure feels like it’s in a recession – most people just want to know when the bad news will stop for a while.
Instead, it seems as though this wild roller coaster ride will continue, tossing victims at every turn, the tracks all heading down, with no climbing spots for a rest or recovery.
With billions of dollars of capital in jeopardy, suddenly Wall Street is jumping off the ride and onto the bailout bandwagon, clamoring for the federal government to step in and rescue them from their risky investments. Forget the Swaps, SIVs, and short-selling, let’s talk about $700 billion (in addition to the billions more to save Fannie Mae, Freddie Mac and AIG) in taxpayer guarantees. With urgency in their voices, the free market institutions are explaining away their newfound love for government support by declaring that this is an unprecedented crisis.
This is not a bailout, they say, it is a necessary step to shore up the fundamentals of our economy.
Well, let’s talk about the other fundamentals of our economy that we need to get us back on track: our roads and bridges, our schools, our parks and libraries, police for our streets, firefighters and emergency responders for our homes and businesses, affordable housing for our neighbors, licensing and permitting for our small businesses, zoning and planning for our economic growth and development, training and retraining our workers for good jobs, and so much more. All this happens right on Main Street. And this work is done by the cities, towns and villages of our country.
Wall Street may be a center of wealth and fortune, but Main Street is what builds our nation’s economy and ensures prosperity and a high quality of life for our families and residents.
For years, the federal government has balked at calls to invest in Main Street, even as local resources have been insufficient to maintain the programs and services at the level we need. In spite of great attention to this downward slide, cities and towns have mostly been on their own.
To those on the front lines of local government, it is stunning to see the federal government drop everything and immediately dedicate more than $1 trillion to Wall Street institutions.
Communities haven’t called for and don’t want a bailout. We want a partnership to jointly invest in the true fundamentals of our economy. Imagine the power of $1 trillion to aid our cities and towns, invested on Main Street to rebuild our economy and address the critical needs of our residents.
The ugly fact is that the nation needs to bail out Wall Street in order to prevent our recession from turning into a depression.
We see the early signs that this nationwide economic debacle is finally hitting Massachusetts hard. Beginning this summer, state tax revenues slowed substantially and appear to be far below their target levels. With a state budget that was already out of balance by $1 billion because of softening revenues and higher expenses, mainly for the landmark health insurance access law, this tax slowdown is very bad news.
The state originally counted on receiving $1.8 billion in capital gains taxes, and now it’s hard to believe anyone is making money on their investments these days. If our economy loses jobs and retail sales sag even more, our income and sales tax bases will erode. Finally, the corporate excise tax is not yielding expected revenues, in part because of over-projections and in part because of the recession.
What started out as a $1 billion state budget deficit could grow to $2 billion or more, plunging the Commonwealth into near fiscal chaos. The governor is now threatening deep mid-year cuts in state accounts and says he may need the power to get at all parts of the budget, including local aid. The MMA and municipal leaders know that Massachusetts cannot afford to relive the days of early 2003, when similar reductions triggered a fiscal crisis in cities and towns, a crisis that endures today for too many.
If the national economy cannot be stabilized, then Massachusetts will see a repeat of the dismal 1989-91 and 2001-03 recessions that brought us deep cuts and long-term dysfunction.
For this reason alone, the Wall Street bailout is necessary. But let’s remember the lesson. The federal government and our state colleagues need to work in partnership with cities and towns in every corner of the Commonwealth. The president, Congress, and state leaders need to protect their true economic partners.
If we can find $1 trillion for Wall Street, we should be able to invest enough to get our communities back on their feet and moving forward again.
After all, Main Street America runs right through every city and every town in every part of Massachusetts.
Written by MMA Executive Director Geoff Beckwith
