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OP-ED | See The Forest

by | Jan 10, 2014 12:34pm () Comments | Commenting has expired | Share
Posted to: The Economy, Opinion, Nonprofits, Poverty, State Budget, Taxes

A national sigh of relief was heard several weeks ago as a federal budget agreement was reached that addressed the uncertainty created by the Budget Control Act of 2011.

That Act said that if Congress can’t agree on a budget, then the existing “default budget” will be slashed without analysis. The sequester feature was a remarkable public statement – by Congress—that the appropriation and spending of public dollars lacks integrity, so who cares how we slash?

The federal budget is approximately 25 percent of our national GDP.  Added to state and local taxpayer dollars and the total taxpayer investment is in excess of 35 percent of our national GDP.  This amount is larger than the GDP of every country in the world, other than China.  How can the manner in which this amount is invested not matter?

Federal spending is largely committed to Social Security and Medicare.  Still, we are debating how we spend over $1 trillion dollars of federal taxpayer money and more than that amount at the state and local level. This “reduced” amount still represents more than the entire GDP of India.

Given six years of a sustained and deep recession, it matters more than ever how we invest taxpayer dollars. Unfortunately, the appropriation process is a frenzy of partisan lobbying that uses historical funding habits as a guide star for the future. If we are unhappy with the present state of affairs, we should look forward, not back.

Taken individually, many issues have merit.  Unfortunately, the choices brand us as Conservative or Liberal, Republican or Democrat. Each issue is a red or blue tree in a forest we choose not to see. A shared national vision is increasingly difficult to articulate because we prefer to discuss the political affiliation of an idea, rather than the idea itself:  healthcare reform, military spending, and early childhood programs. Blue. Red. Blue.

The inability to speak with one voice about shared American values is a failure of our political system. Rather than fix problems, we fix blame.  We blame Democrats, Republicans, the Socialist Obama and the fascist Bush.  It is the fault of the current administration, or those prior. 

There are core issues facing our nation and state. 

The data is clear that “people results” continue to deteriorate:  the national median income has decreased five consecutive years, a smaller percentage of the population is in the workforce, academic achievement deteriorates across the board and is at crisis levels for our poor. Our state economy is constricting.  Yes, our poor are getting poorer, but many people are suffering. US upward mobility lags our international peers to an extent rarely discussed.

Our core issues are tied to the fundamental right of self-determination—let’s be hokey and even say the right to the “American Dream.”  We like to talk about Blue or Red issues, but a more sophisticated conversation is needed. The simple reality for today’s world is that social services and economic development are the same thing.

We value work. If you live the life you desire through the efforts of your own hands, many problems melt away.  Unfortunately, our country and our state are in the midst of an extended period when a smaller percentage of our population is working—and the majority of people that do work are making less money.

The design, implementation and evaluation of policies intended to promote lasting economic development and greater economic inclusion are not conducive to a four year election cycle. Real solutions require active participation of a wide variety of “stakeholders.”  Yes, jobs are needed, but there are many moving parts, as open jobs go unfilled and those that want to work are increasingly unqualified for a variety of life issues. Long-term solutions are required to combat long-term trends.

An expanding and inclusive economy is the best social service program that exists.  This is the focus we need. This should direct how we spend an increasingly limited pool of public resources. Ultimately, this is the most fiscally prudent course we can take as expanding poverty is proving to be very expensive.

Early childhood programs are not some “public assistance” program for “those people.”  It is a necessary tool that is required to make our investments in public education worthwhile and provide access to the American Dream for those that increasingly live in an environment where success is visible only on TV.

Workforce Development can structure programs that partner the interests of the long-term unemployed with private employers to provide a win/win for everyone. A company can gain a trained employee at minimal cost and a person gains hope for the future.  The long term economic benefits when these types of programs work can be extraordinary. The Connecticut Step Up program does this wonderfully, it unfortunately represents less than 1 percent of one annual budget.

Public investments should be evaluated for economic impact.  Investments that will expand economic opportunity ultimately save government money.  How we spend money does matter, but we need to pay attention.

Tools can be developed that will foster credibility by defining goals and tracking results.  The Great Depression destroyed the public faith in private capital markets. The Securities Acts and GAAP were developed in response to this lack of faith and were a primary reason investors reentered the US capital markets. Similar ideas can be applied to how government spends money.

The “great recession” revealed potholes many did not know existed.  The personal agony of a parent unable to support his or her family is the same for an ex-con, ex-banker or ex-government worker.  Those that have never worked need to learn how.  The consequences to the family are the same.  If you think aiding any one of these demographics is a red or blue position, than something is wrong.  If you want to exclude any of these groups, remember:  someone wants to exclude you.

Brian O’Shaughnessy of New Haven is a principal in the firm Community Impact Strategies Ltd.

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