Contractionary Budget Cuts Transfer Wealth to The Rich

The massive cuts to fundamental public services are working a massive transfer of wealth from the less wealthy to the more wealthy. I don’t think this is news to many readers here, but being able to provide a concrete example or two helps win the watercooler wars.  More on the flip.

Example 1: Fire Services

I have yet to see in writing what the impact is on fire services in Santa Barbara County, but the rumor is that there will be substantial increases in response times. In the LA Times a month ago, the LAFD warned of this:

Los Angeles’ budget crisis is likely to mean it will take longer for firefighters to respond to calls for help.

Faced with $56 million in budget cuts, the Los Angeles Fire Department plans to enact rolling brownouts that temporarily take fire engines out of service at stations across the city.

Now, how does this transfer wealth to the rich? First, let’s falsely assume that fire stations are equally distributed by response distance across property values and/or average income by area. (They most certainly aren’t.) Second, without delving into specifics of the science of firefighting, let’s assume that there is a roughly linear relationship between property damage and response times. (In other words, there isn’t a massive difference between 4 minutes and 5 minutes but not between 5 and 6.)

Given these assumptions, what happens when response times are lowered? One might think it’s typical of the Darwinian mindset of conservative policy. If you have a fire in your house (and you should, you know, take personal responsibility for that–everyone who has a fire deserves no sympathy unless they have the top rated fire retardant roof, all of their wiring is up to 2009 code, and they have fire alarms every two feet in their house with both land and cellular connections to the fire department–otherwise, they shoulda…), you lose.

But that’s a mistake. Slower response times mean more damage and more injuries. And what does that mean? That means higher insurance rates. And everyone with a mortgage has to have fire insurance.

So, even if you don’t have a fire, your “taxes” just went up. This is like a tax because it’s a payment that you are more or less bound to pay. And given the marginal utility of extra money (another concept that the conservative brain cannot compute) this “tax” will, as usual, fall far harder on those with less cash to spend.

Of course, the rates also go up because now you really do have a higher risk of your house being destroyed by a fire!

Now, universalize this effect to the other cuts in basic services. 40-to-1 classrooms mean the earnings potential of students in lesser funded school districts would be even lower (yet another concept all the “self-made men” can’t handle). Police? Better hope you live in a well funded police district.

People want services. People love socialized schools, socialized fire departments, socialized vector and animal control, socialized police, socialized sewers… and they love their erstwhile “public option” for workers compensation (SCIF), but they don’t want to pay. Well, guess what? Everyone’s paying now–but the check is going to Allstate instead of the state.

3 thoughts on “Contractionary Budget Cuts Transfer Wealth to The Rich”

  1. It’s time we start asking every candidate for every state and local office what their plan for restoring our fundamental services is and what their position on the Democratic capitulation and complicity in destroying them is.

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