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