Budget Cuts Will Force Hundreds of Thousands of Layoffs

With state budgets under extreme duress, many governments are expected to layoff hundreds of thousands of workers, with remaining state workers facing pay cuts and benefit reductions, all a result of failed taxation and trade policies.

‘Free’ trade has allowed goods to enter the country with no regulation, and has made it extremely difficult for domestic sellers to stay in business, depriving local governments of tax revenue generated by this production. This has led to the prospect of mass layoffs and pay cuts.

Many schools are funded by property taxes, and as home values continue to plummet, that funding is expected to be hit hard. The end result: hundreds of thousands of people will be out of work in a job market that more than one million people gave up on in December and January. Students will be forced to endure larger class sizes, less qualified teachers and the elimination of elective programs such as art, music and physical education.

“Layoff notices are coming fast and furious because states are finding themselves in dire fiscal straits,” said Kim Anderson, director of government relations for the National Education Association.

America must work to implement taxes such as the value-added tax, that would not only help properly fund our government, but would help correct our trade imbalance. A value-added tax functions much like a sales tax, but global trade rules allow governments to rebate this amount on exports, leaving American products at a disadvantage. A value-added tax is also far more efficient at collection and there are no loopholes for individuals to exploit.

Many experts and politicians forget that the reason state budgets have gone from worrisome to flat-broke is because of the economic downturn. Laying off more people will hurt the economy further, creating a downward cycle. While government spending alone cannot turn around an economy torn asunder by failed trade policy, it is also imperative that local governments do not exacerbate the problem.

We must encourage our peers and politicians to work to remedy America’s failed trade policies which increasingly affect every part of the fabric of society. Inability to act will lead to the formation of a nation that is difficult and frightening to envision.

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