If we bailed out the banks, why not the states?

Note Rescue All States at top of pie chart
* Assumes funding state budget shortfalls 2012/21013 – see graph below

Since the recovery from the 2007 recession officially began in June 2009, private-sector jobs are up by 2.8 million, but public-sector jobs (the combined employment in federal, state, and local governments) are down by 584,000. Not only do these job losses suck energy from our economic recovery, all too many are in valued services like teachers, police and firefighters.

Helping the states overcome budget shortfalls and rehiring those workers not only would help invigorate our economic recovery, it would be a cheap investment in comparison to the amount spent on bailing out the Wall Street banks. If we were to begin such a program now, and assuming we offset all projected state budget shortfalls for 2012 and 2013, the cost would be 153 billion dollars (see graph below). By comparison, the actual expenditures for the bailout totaled 1.6 trillion dollars (see Adding Up the Government’s Total Bailout Tab – Interactive Graphic – NYTimes – link below). The pie chart above shows how miniscule the cost of putting state workers back to work would be in comparison to what taxpayers have spent saving banks from their time at the roulette wheel.

Adding Up the Government’s Total Bailout Tab – Interactive Graphic – NYTimes

Helping the states overcome budget shortfalls and rehiring those workers not only would help invigorate our economic recovery, it would be a cheap investment in comparison to the amount spent on bailing out the Wall Street banks. If we were to begin such a program now, and assuming we offset all projected state budget shortfalls for 2012 and 2013, the cost would be 153 billion dollars (see graph below). By comparison, the actual expenditures for the bailout totaled 1.6 trillion dollars (see Adding Up the Government’s Total Bailout Tab – Interactive Graphic – NYTimes – link below). The pie chart above shows how miniscule the cost of putting state workers back to work would be in comparison to what taxpayers have spent saving banks from their time at the roulette wheel.

Wall Street banks have done little to stimulate our economy and instead have continued to starve it for capital while gambling and losing billions more. Investing in the states would be a tremendous boost to their economies directly, not only in public sector employment but also due to the follow on growth in private sector jobs.

The current loss of public sector employment runs counter to previous recessions and is contributing to our slow recovery. Its time to invest in the people who protect and serve us.

This does not have to be a “throw money at the wall” investment where we simply give the states money. It can be focussed on replacing specific funding that has been cut from state budgets and which has put people out of work.

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