THE REAL REASON FOR STATE BUDGET DEFICITS.....

We all know that when this country faces a crisis, whether it be a war or a economical crisis, the politicians will find it advantageous to find someone or something to blame it on. If that someone or something happens to be their adversary, then it is that much better to place the blame on them.

So, when state leaders were facing the budget shortfalls we all heard so much about, some chose to blame the so called overpaid public sector workers and their unions. This was an attempt to turn the public against these people. The same people that provide us with public services such as police protection and fire protection.

The University of California at Berkley recently published a report called "The Wrong Target: Public Sector Unions and State Budget Deficits." This report concluded that public sector employees are not overpaid, as well as their unions are not responsible for local government shortfalls. According to the report from the University of California Berkley, the real cause is the bursting of the housing bubble.The housing crisis caused the Great Recession as well as slowed business activity to a crawl, which in turn reduced local and state government revenue.

Let's travel back in time for a moment....After the home mortgages collapsed in 2008, which was the start of the Great Recession, state budget deficits climbed to an all time high. In 2009 state budget deficits climbed 30 billion dollars higher then the previous high. In 2009 state budget deficits reached 110 billion dollars. Not to worry, because in 2010 that record was blown away when the state budget deficits reached 191 billion dollars.

So now the politicians need their scapegoat right? Politicians like Wisconsin's Gov. Scott Walker, who says that the state's budget crisis was and is the fault of public sector workers. Gov. Walker told his voters "we can no longer live in a society where public employees are the haves and taxpayers, who foot the bill are the have nots." Gov. Walker then went on to cut public sector wages and their benefits and to add insult to injury he eliminated their right to collective bargaining. Does Gov. Walker somehow think that just because you work in the public sector that person does not pay ANY taxes? Just food for thought..

The authors of the report from Cal Berkley disagree with gov. Walker. They state that "public sector compensation as a share of state budget has actually declined." Not causing the problem to the budget as Gov. Walker and many other politicians would want us to believe. The authors of the report from Cal Berkley also find that there is little to no support for Gov. Walker's statement of the public sector employee being the "have". The report points out that wages for public sector employees lag way behind those in the private sector, who do the same work and have comparable education and experience. Even if you factor in the health care and benefits in the comparison, the public sector compensation is not better then that of the private sector.

Let's be honest here, most workers whether public or private sector are the "have nots". The only "haves" in our society are those corporations, banks, CEOs, who were engaged in dirty trades based on very sketchy values of home markets that started the trillion dollar housing bubble. When this bubble popped, the value of these homes fell, construction ceased, which all affected other parts of our economy. Lots and lots of people lost everything during this period. But none of this was caused by a public sector employee or their unions.

As the value of properties continued to decline, so did the tax revenue which is based on property value. As more and more people lost their jobs, business revenue continued to drop and so did even more tax revenue. And that is how you get to the record budget deficits of 2009 and 2010.

It will always be easier and more useful for politicians to find a scapegoat and place the blame somewhere else, then it is to face up to the actual causes of these deficits. But to try and turn the public against the very same people that provide for them is wrong and untrue...