Our economy is going to get better some day, step by step. But it’s bad right now, with a full recovery likely a matter of years rather than months away. Public officials should plan accordingly, keeping in mind how the vicious cycle of a bad economy turns typical decision making on its head.
Start with a look at a virtuous cycle – the opposite of a vicious cycle – for a point of reference. Look back to the early 1990s, when President Bill Clinton got a tax increase through the U.S. Congress. A lot of folks were genuinely concerned about our federal budget deficits and national debt back then. The tax hike signaled that the federal government had grown serious about getting its finances in line. That quelled fears about inflation, and sent interest rates lower.
The relatively low cost of borrowing benefited businesses just as new strides in technology were reshaping our lives and helping keep inflation in check. The tech sector’s growth sparked other segments of the economy, leading to more payroll taxes, sales taxes, property taxes, capital gains taxes, etc. The federal budget came into balance, and then went into surplus. Public officials had plenty to divvy up from the virtuous cycle.
Now we face a vicious cycle. Tapped-out consumers stop spending. Companies cut back on orders and production and payrolls. Weakness leads to more weakness. Jobs keep disappearing. Government revenues decline at every level. Budget deficits abound.
Elected officials in Los Angeles should beware as they seek to meet those deficits with budget cuts, however. The vicious cycle is in full swing. Plenty of folks are desperate to hang on to their house, make their rent, or just get their next meal. Desperate individuals sometimes take desperate actions. Some of them lie, cheat, steal – and worse.
This trend holds the potential to tear apart our social fabric. Examine past periods of economic hardship and you’ll see that some folks fall into cynicism, looking beyond government institutions for leadership. Some are drawn to what appears to be strong leadership but is really a criminal element sophisticated enough to exploit stress points in our societal sense of right and wrong. Yesterday’s gangsters could quickly become today’s folk heroes in a tough economy.
That’s a particularly vicious cycle, and it will take an increased commitment to public safety to head off any such erosion to our social compact amid the current downturn.
Now is the time for elected officials to trade across-the-board mentalities on budget cuts for a sharpened sense of priorities. They should heed the vicious cycle and find money for more cops to help keep the cynics and criminals at bay while the rest of us make an honest effort to slug our way through tough times.
The everyday working folks and business owners who will ultimately pull us out of this mess deserve that much cover.
The Los Angeles Police Department (LAPD), meanwhile, has earned the assumption that properly trained and appropriately deployed cops can do more than simply react to crimes once they have occurred. The LAPD’s recent record has earned a place for the notion that good police work can not only prevent crimes but also dispel any atmosphere of lawlessness that might otherwise take hold – with safeguards on civil liberties in place all the while.
Indeed, it’s true that the rugged economy is pushing some of our people a rung or two down the socio-economic ladder, and it’s inevitable that some of them will resort to crime. Yet that still doesn’t mean that socio-economic factors trump cops on the beat – or that we must accept lawlessness as a natural and unavoidable by-product of a bad economy. The economic downturn means that the pool of potential criminals will grow, to be sure, but that presents a question of math rather than sociology – and the answer is more cops.
Just in case that’s not enough, we urge our politicians to consider the bonus that’s in it for them. They should understand just how disappointed voters are with elected officials at every level. They should know that perhaps the best chance for them to recover their standing with the public is to make courageous decisions when it comes to public safety.
Jerry Sullivan is the Editor & Publisher of the Los Angeles Garment & Citizen, a weekly community newspaper that covers Downtown Los Angeles and surrounding districts (www.garmentandcitizen.com)
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In behalf of the severe
In behalf of the severe economic crisis, there are still unsung heroes that comes to our path. Ever ready to accompany us in combating the problem. Ever hear of Shadowhare? Shadowhare has nothing to do with male pattern baldness; he is a real life urban superhero. He and his group, the Allegiance of Heroes, patrol the streets of Cincinnati fighting crime and helping people in trouble, replete with masks and costumes. It does take courage, especially since they have purported to be willing to perform a citizen's arrest on anyone they find up to no good, and they are armed with handcuffs and pepper spray. Some members of Cincinnati PD would get a quick payday loan to get him to go away, but it's apparent he isn't. So long as his crime fighting doesn't lead to needing debt relief from missing work, Shadowhare is part of growing trend.
helping people out and possibly reducing crime
I graduated from the University of New Hampshire in 1992 with a BA Degree in Political Science and a minor in Economics. I took geography courses which were awesome. I have been interested in developing economy economics since I was a college student.
The less underground an economy is the better able governments may be to tax sales and incomes.
I ran for United States Senate in 2002.
My website is http://www.myspace.com/kennethstremsky
If Congress says for the next 2 years that individuals and businesses do not have to pay social security taxes on wages below $30,000 a year, many people will consume more and reduce debts, many businesses may fire fewer people, and many small businesses may hire more people.
If Congress says that businesses do not have to pay social security taxes any more, many businesses are likely to fire fewer people, hire more people, increase wages of some people, and increase dividends.
Congress could pass a 2 percent national sales tax that is placed on most things other than food, shelter, health care, and education. If a national sales tax is adopted, the federal income tax on individuals and businesses should be reduced at the same time. Some of the money could be used to fund Social Security and Medicare. A national sales tax would tax some of the money being earned in our underground economy by illegal immigrants and others.
The federal government should sell a lot of the land it owns to raise capital, reduce the national debt, help fund Social Security and Medicare, help fund infrastructure, help fund buses within cities, help fund buses between cities, help fund passenger rail, help fund energy transmission, help fund energy development, and do other things. If you type federal government owned land on a search engine, you might be surprised at how much land the federal government owns. Some of the money the federal government takes in from the sale of the lands should go to state governments. I expect many individuals and businesses from the United States of America and other countries to buy some of the lands. Many local governments may obtain more money from their property taxes.
Many more state governments should allow smoking in restaurants. If many more restaurants allow smoking, many state governments may obtain more revenues from restaurants and cigarettes. If more people are employed by restaurants, fewer people may need food stamps and Medicaid.
Most non violent drug offenders should be released from prison to make room for violent criminals. If most non violent drug offenders are released from prison, many families may have less need for food stamps and Medicaid over time. Teenage pregnancy may decrease a lot more if parents who are now in prison for non violent drug offenses are more involved in the lives of their children. Less teenage pregnancy may help reduce poverty over time.
If the United States of America and Mexico legalize, regulate, and tax the sale of marijuana, heroin, and cocaine for people who are at least 18 years old, they may be able to spend less money dealing with violent Mexican drug gangs. If Mexico is able to spend less money dealing with violent drug gangs, Mexico may be able to spend more money on its economy. If Mexico's economy grows a lot, fewer illegal immigrants may come to the United States of America, many illegal immigrants may leave the United States of America, and many more Mexicans may be able to buy products and services from the United States of America. Many poor people who are having a hard time finding jobs may have an easier time finding jobs if they do not have to compete against so many illegal immigrants. If state governments are able to spend less money fighting violent crime, dealing with illegal immigrants who are a major expense for them, and dealing with non violent drug offenders, they may be able to improve the services they provide to citizens and reduce their sales taxes.
The United States of America and many other countries should legalize prostitution for people who are at least 18 years old to reduce sex slavery and rapes. If police officers are able to spend less time dealing with prostitutes and their customers, they may have more time to deal with violent criminals.
The less the federal government taxes individuals and businesses the higher the taxes that state governments may be able to obtain from individuals and businesses. Sometimes, I think state governments spend tax dollars far more wisely than the federal government and get better results.
If the federal government stops taxing interest from savings accounts, dividends, capital gains, and estates, businesses are likely to be better able to get loans and investments for hiring workers and plant and equipment. Wealthy people and others may be more likely to donate money to homeless shelters, soup kitchens, and food pantries. Many middle class people, union members, and government employees who have mutual funds would benefit from capital gains and dividends not being taxed.
Sincerely,
Ken Stremsky