America's children hurt most by housing recession
Middle class families have traditionally depended on their homes as their store of wealth. Local municipalities, in turn, have traditionally derived their revenues from property taxes. This recession has been different from past recessions in that families and communities have been more directly and immediately affected, due to the dramatic fall in housing prices.
Most states and municipalities are forbidden by law from borrowing money to cover a period of revenue shortfall. While police and fire departments have suffered cutbacks in their budgets, the service most severely hit by revenue loss has been education. Substantial numbers of teachers have been laid off, programs cut, and recreational and educational activities curtailed, especially in sports and the arts.
Ordinarily, the federal government would intervene to assist the states, which in turn would assist local communities in maintaining their educational infrastructure. No longer. Yes, Congress did pass the stimulus package which provided $140 billion dollars to support state and local governments over two and a half years. But that money covered less than 40 percent of state revenue losses in 2009 through 2011, and it has run out.
With families and communities hurting for money, the heaviest burden has been placed on America’s children with the cutback in funding for education. Moreover, their older siblings graduating from high school and college have found few job opportunities. Even those lucky enough to find jobs, often find the jobs inadequate in opportunity and pay. A number of well-documented research studies have determined that a poor start in the job market often does permanent damage to one’s entire career.
Most previous recessions were not characterized by such a dramatic loss in property values. This unusual circumstance has not been fully appreciated by economists and politicians. Banks and businesses have been bailed out under the government’s too-big-to-fail policy. Yes, someone has to pay for the financial misdeeds in the private sector and the wrong-headed policies in the public sector. Why should it be America’s children?
Larry’s commentaries can be found via Twitter under NDProfMarsh.
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