New Mexico Governor Susana Martinez is surfing exultantly on top of an economic death spiral, rolling out her proposal for increased austerity measures and holding fast to her pledge against any tax increases.
For two years, the state has seen marked drops in revenue owing to its dependence on oil and gas prices. This predicament is doubly unsound: the lack of diversity leaves us too reliant on a single industry and the vagaries of its markets, and revenue is shackled to the finite and destructive resource of fossil fuels. One way or another, the fossil fuel epoch will end, but little provision is being made for that transition. Under austerity politics, such provision is unspeakable: the only order of business is to survive another year, hoping the next one won't be much worse.
"It's up to New Mexico state government to tighten its belt - not New Mexico families," said the Governor when she presented her plan in Albuquerque last week. She went on to state, "We have many, many options to solve the budget deficit. We don't have to raise taxes. We don't have to penalize families."
This is consistent with the "no tax" pledge on which she campaigned, but looking through the rhetorical smoke, it is families who end up paying for such policies. Cutting take-home pay for teachers and state employees, already working for long-stagnated wages, penalizes them, not the government. Requiring more of their pay to be diverted into retirement plans is a transfer of wages to investment firms. Despite the Governor's words about protecting families, under this policy public workers must tighten their belts in order to maintain capital gains for others. Further cuts to education reduce employment and further erode public investment in our next generation, as well as research and development needed for economic growth and diversity. As austerity budgeting undermines economic growth further, the death spiral unfolds. Of course these policies penalize families. Families pay dearly for them in reduced pay, lost employment, eroded government and weakened public institutions, crumbling infrastructure, and more - but less so the families Martinez would protect from taxation. You will tighten your belt on their behalf.
The columnist who points this out will be accused by some of fomenting class warfare, but this is balderdash. If I witness and report a house fire, shall I be charged with arson? History is rife with class struggle, and the battle for New Mexico's budget reflects just such a struggle.
Since the middle of the twentieth century, the wealthiest American families have shifted their tax burden onto lower income groups while also increasing their share of national income in a rapid and aggressive transfer of wealth upward to a minority of the population. With this concentration of wealth, the minority has enjoyed greater means to spend on politics, winning further concessions on taxes and rewards for investment, all subsidized by the rest of us. Instead of paying taxes, the investor class prefers to lend money to the government by way of instruments such as Treasury bonds, earning interest which the rest of us help pay through our own taxes. These privileged families are under no obligation to invest in their communities or even their own country. Often, they do not.
Our Governor claims to be protecting families. Having lowered income tax rates for its highest earners and reduced corporate taxes, and refusing to tax wealth even in a prolonged crisis, New Mexico asks most of its families who toil hard on behalf of other people's wealth, with no guarantee of social benefit.
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Algernon D'Ammassa writes the "Desert Sage" column for the Deming Headlight and Sun News papers.