Degrowth Neg - DDI 2023 LS

DDI LS Degrowth Neg 23
States CP
1NC---Off
States CP
CP: The 50 States should uniformly adopt a degrowth-based federal jobs guarantee.
States CP solves
Paul et al. 18 [*Mark Paul is a Postdoctoral Associate at the Samuel DuBois Cook Center on Social Equity at Duke University. **William Darity Jr. is the Samuel DuBois Cook Professor of Public Policy, African and African-American Studies and Economics and the Director of the Samuel DuBois Cook Center on Social Equity at Duke University. ***Darrick Hamilton is Professor of Economics and Urban Policy at the Milano School of International Affairs, Management and Urban Policy and Department of Economics at the New School for Social Research, and Director of the Doctoral Program in Public and Urban Policy at The New School. “The Federal Job Guarantee - A Policy to Achieve Permanent Full Employment.” Center on Budget and Policy Priorities. 09-03-2018. https://www.cbpp.org/research/full-employment/the-federal-job-guarantee-a-policy-to-achieve-permanent-full-employment#_ftn1. Accessed 24-07-2023.]/ISJD
Because of the vital role of state and local governments in providing public workers and services, it is essential that federal agencies and the NIEC are empowered to work closely with these governments. Local and state governments will be encouraged to develop employment proposals in conjunction with community leaders, local government officials, labor organizations, and local residents to ensure the proposals will serve the needs of the constituents and available pool of labor. The employment proposals may not be used to employ individuals who will replace or speed the displacement of existing employees or individuals who would otherwise perform similar work.[35] The program will cover wage, benefits, and material expenses.[36] This structure will largely parallel the direct employment programs under the New Deal, whose projects were developed and proposed by local and state governments. Fostering partnerships and buy-in from local and state partners is critical to the success of the program, as localities may be most aware of the skills of their available workers as well as projects that will provide the greatest benefit to their communities.
AT – Can’t Deficit Spend
States have the capacity to be countercyclical and deficit spend during recessions
Hoongrajok 21 – (Amanda Page-Hoongrajok received her Ph.D from the University of Massachusetts Amherst, her M.A. from Roosevelt University in Chicago, IL, and her B.A. from Alverno College in Milwaukee, WI. Her dissertation focused on state and local government finances over recessions and recoveries); 02-03-2021, "Can state and local government capital spending be a vehicle for countercyclical policy? Evidence from new interview and survey data," Taylor & Francis, https://www.tandfonline.com/doi/full/10.1080/01603477.2021.1875246 //sp
Importance of state and local government spending for countercyclical policy The fifty state governments and ninety thousand local governments in the United States are responsible for administering and managing essential services such as education, healthcare, and transportation. To this end, they hire public workers, invest in infrastructure, and purchase materials and equipment. State and local government consumption and investment spending rose from 5.5% of GDP in 1947 to 12.5% of GDP in 1975 and has averaged 11% of GDP between 1970 and 2020. The sheer size of the state and local government sector implies that fluctuations in its spending will have significant impacts on the macroeconomy. Figure 1 shows that stagnate state and local spending after the 2001 recession contributed to the weakness of the 2001 recovery and the fall in state and local spending after the 2008–2009 downturn contributed even more greatly to the weakness of the 2009 recovery. In the 2009 recovery, real state-local expenditures declined until 2014 and did not return to the pre-recession level until 2019, a full 10 years after the official end of the Great Recession. This dragged real GDP growth, rather than supporting it. Policymakers are deeply concerned that the current contraction in state-local government spending will once again prolong the recession and delay the recovery. For example, Federal Reserve Board Chair Jerome Powell stated in June, “It will hold back the economic recovery, if [state and local governments] continue to lay people off, if they continue to cut essential services. And in fact, that's kind of what happened, post the global financial crisis.” (Smialek, Rappeport, and Cochrane Citation2020). Figure 1. Real state-local expenditures and real GDP during the 2001 and 2009 recoveries. The solid lines in the figure show aggregate state-local government spending growth during the 2001 and 2009 recoveries. The dashed lines in the figure show real GDP growth during the 2001 and 2009 recoveries. The index equals 100 at business cycle trough. Source: FRED and author’s calculations. Table 1 shows the change in real state-local spending from the prior year for total direct expenditures and for the major categories of spending by function. It shows that education spending fell four consecutive years, accounting for about half of the fall in overall spending in 2011 and about 30% of the overall fall in 2013. This means education spending was a large drag on state-local government spending during the recovery from the Great Recession. Transportation, public safety, and environment and housing spending also declined, dragging overall spending. Public welfare spending, on the other hand, increased every year except 2012, providing a countercyclical stabilizing force. Capital spending is a promising potential vehicle for countercyclical fiscal policy for two major reasons. First, capital spending, unlike current spending, is easier to shift forward and backward in time. Keynes supported the idea the government should pace capital spending such that no business cycle fluctuations could occur. He argued the government should ready blueprints “as ambitious and glorious as the minds of our engineers and architects and social planners can conceive” and then pace capital spending “neither so slow as to cause unemployment nor so rapid as to cause inflation” (Keynes Citation1978, 266). The potential for countercyclical stimulus is only limited to the imaginations of the architects and engineers who create capital project designs. Second, capital spending is one aspect of state and local government budgets that has the potential to operate on a countercyclical basis even in the absence of federal aid. Balanced budget rules legally prohibit state and local governments from deficit financing operating expenditures to varying degrees. This effectively forces aggregate current spending to decrease when revenues decrease, imparting a significant procyclical bias to state and local government budgets. However, the majority of governments can legally borrow to pay for capital investment (National Conference of State Legislatures Citation1999). This means state and local governments could issue bonds during a recession to finance capital spending, providing local stimulus.
States circumvent the Balanced Budget Requirement
Randall and Rueben 17 – (Megan Randall is a research associate in the Urban-Brookings Tax Policy Center and in the Urban Institute’s Research to Action Lab, focusing on state and local public finance, federal place-based programs, state and local economic development policy, and inclusive economic recovery; Kim Rueben is the Sol Price fellow and director of the State and Local Finance Initiative at the Urban-Brookings Tax Policy Center, and she is an adjunct fellow at the Public Policy Institute of California); “Sustainable Budgeting in the States: Evidence on State Budget Institutions and Practices,” November 27th 2017, Urban-Brookings Tax Policy Center, https://www.urban.org/sites/default/files/publication/93461/sustainable-budgeting-in-the-states_2.pdf
BBRs are not uniform across states. They vary in stringency and design, and not all spending is subject to BBR limitations. Capital and pension funds, for example, are usually exempt from BBR limitations (Snell 2011) (box 5). In 44 states, the governor must propose a balanced budget, while in 41 states the legislature must pass a balanced budget, and in 40 and DC the governor must ultimately sign a balanced budget (figure 11). States combine rules differently. For example, although Texas and West Virginia require the legislature to pass and the governor to sign a balanced budget, they do not require the governor’s initial proposal to be balanced. Hawaii, meanwhile, requires the governor to propose and eventually sign a balanced budget, but the state does not require the legislature to pass a balanced budget as an intermediary step. Circumventing Balanced Budget Requirements Balanced budget rules are often designed imperfectly, and state policymakers can circumvent BBR requirements. Limitations on the spending covered under BBRs, paired with government fund accounting practices, can provide opportunities for circumvention. BBRs are generally applied on a cash basis rather than on an accrual basis, which means that states can engage in accounting gimmicks to satisfy requirements. For example, states can push a payroll or state aid payment from the last month of the current fiscal year into the first month of the next. This allows states to meet their legal requirement to balance their budgets while leaving resources and obligations out of balance. In 1998, Hawaii delayed payroll for state employees from June to July to balance its budget, although the effort resulted in several lawsuits from public university employees. In 1985, Texas made a similar choice to move its payroll in order to balance the budget (Oregon Office of the State Controller 2009). California moved its payroll obligation by one day in the 2009–2010 budget cycle to balance its budget (California Legislative Analyst’s Office 2010). This gimmick only produces one-time savings, however, as the state is simply transferring its obligation to the following fiscal year. If a shortfall is caused by sudden changes in economic conditions, this flexibility can allow a state time to recover economically and meet its fiscal obligations. However, it can also lead to ongoing reallocation of expenses to the next budget year. State BBRs do not apply to all revenue streams or spending obligations. For example, states typically do not apply their BBRs to pension obligations or employee health care costs. In these scenarios, a flexible BBR can make suspending pension payments especially attractive, even if fiscally unwise in the long term, since suspending payments frees up resources to cover general fund expenses. This example illustrates how state fund accounting can obscure a state’s true fiscal position.
States can avoid Balanced Budget Requirement
Bourdeaux 23 – (Dr. Carolyn Bourdeaux is a Senior Visiting Scholar at the University of Georgia, a Board Member of the Concord Coalition, and a Former Member of Congress from Georgia’s 7th District); “Op-Ed by Concord Coalition Board Member Dr. Carolyn Bourdeaux: Federal Budget Lessons From The States,” June 28th 2023, The Concord Coalition, https://www.concordcoalition.org/news-coverage/op-ed-by-concord-coalition-board-member-dr-carolyn-bourdeaux-federal-budget-lessons-from-the-states/
Now that we’ve come through the debt ceiling drama, most of us who want to see more fiscal responsibility at the federal level can agree that we got to a reasonable result, but the process was – to put it mildly – a problem. We cannot use the full faith and credit of the nation and the economic health of the global economy as a bargaining chip to restore fiscal responsibility. There has to be a better way. In fact, many of us who study state budgeting annually observe budget processes that lead to (largely) fiscally responsible decision-making and do not require high stakes hostage taking to get there. As someone who has worked at both the state and federal level, the differences are striking and suggest that some serious thought should be given to translating some valuable lessons of state budget processes and policies to the federal level. The most obvious place to begin is that almost all states have some sort of statutory or constitutional balanced budget requirement. The objection to this at the national level is that the federal government may need to run deficits to reboot the economy or respond to emergencies – but we are now running nearly $2 trillion-dollar annual deficits when times are good. And without any procedural restraint to invoke, it is very hard for policymakers to temper expectations and build a culture of fiscal discipline consistently over time. While balanced budget requirements at the state level are often perceived as strictly binding, state budgeters can deploy any number of tricks to circumvent these requirements. States can short their pension obligations, issue debt to cover operating expenses, create off-the-books entities to issue debt, pass the buck to local governments, and game the revenue estimate – just to name a few gimmicks. Yet, by and large, year after year, most states pass fiscally constrained budgets. Balanced budget requirements are as much about perception than about a hard and fast rule.
State Reserve Banks make deficit spending possible
Attewell 09 – (Steven Attewell is completing his PhD in history at the University of California at Santa Barbara, where he specializes in the history of public policy); “Fifty-State Keynesianism - Part Three,” The Realignment Project, http://realignmentproject.wordpress.com/2009/09/22/50-state-keynesianism-part-3/
Historically speaking, the economists who followed John Maynard Keynes can be grouped into two camps: fiscal Keynesians, who created a synthesis between Keynes and standard neoclassical microeconomics, and emphasized the power of aggregate spending and monetary policy, and social Keynesians, who emphasized the more heterodox elements of Keynes’ thinking, and argued that the government had to be a more dynamic actor in the economy. One of the chief arguments of the social Keynesians was that fiscal Keynesians, in their attempt to fit Keynes’ theories into the free market orthodoxy, had neglected the great man’s denunciation of the market as a tool for investment. Less well known than his arguments about aggregate demand, John Maynard Keynes had argued in the General Theory that the stock, bond, and money markets were terrible ways to distribute capital for investment, likening them to a giant casino, in which people made bets on what they thought other people would think the average man would think. Keynes argued that this process inevitably led to excesses of fear and exaltation that led at various times to over-investment, under-investment, maldistribution of capital, and general inefficiency – the government, he argued, would have to take over the investment function. And so the social Keynesians argued that it was insufficient merely to boost the level of Federal spending in recessions; the government had to use its spending power to invest counter-cyclically in those needed areas (infrastructure, for example) over the long run. So, what do we need in order to make sure that 50-State Keynesianism can handle both the short-term consumption function (boosting aggregate demand in recessions, dampening things down in bubbles) and the longer-term investment function? To begin with, as mentioned in part 2, the establishment of state reserve banks are a critical structure for developing a stable and counter-cyclical source of financing during recessions, both to fund the consumption function programs , and to provide the capital to keep necessary public investments running in times when the private credit markets have frozen up. However, it is only once “fractional reserve lending is combined with an agile use of the power to tax (as opposed to the 2/3rds rule in California) and a temporary suspension of balanced budget rules that individual states can muster enough financial muscle to be able to run counter-cyclically.
AT – States bad for Econ
State governments are best situated to provide green job guarantees—they have stepped in absent federal action
Gunby 19’ [Jennifer Gunby is the Senior Manager for State & Local Advocacy at the US Green Building Council. U.S. Green Building Council. 9-17-19. “State and local governments offer their own New Deal policy solutions” https://www.usgbc.org/articles/green-new-deal-policy-packages-offer-solutions-all-levels]//LA
State and local governments can capitalize on the benefits provided by Green New Deal-style legislation. There has been a great deal of attention following the November 2018 elections, and the announcement of the “Green New Deal.” At the federal level, a Green New Deal was introduced in February 2019 (House Resolution 109 and Senate Resolution 59). The resolution has spurred conversation and action from states and local governments to address economic inequality and climate risks. Absent federal action, state and local governments can move forward with solutions. Not only can they more nimbly address the challenges, they are also spending significant amounts of taxpayer money on the consequences of lack of action—increased rates of asthma, vector-borne diseases, heart disease and cancer; impacts of extreme weather events; and diminished air and water quality. Several states and cities have already moved forward with solving these challenges by introducing their own versions of a “Green New Deal,” and many others passed complementary policies that well aligned with the tenets of the Green New Deal. Those packages that specifically use Green New Deal terminology include: California: AB 1276, introduced in February Los Angeles, California: Green New Deal / pLAn 2019 Connecticut: HB 6452, introduced in January Maine: LD 1282, introduced in March; passed and signed in June Minnesota: HF 2836, introduced in April New York, New York: The Climate Mobilization Act, passed and signed in April; see also OneNYC 2050 North Carolina: H737, introduced in April New York: A08429 / S06599, introduced in June; passed and signed in July Rhode Island: H 5665, introduced in February, and RI S 0659, introduced in March Virginia: HJ 724, introduced in January These bills would put a significant portion of the country on the path toward net carbon neutrality and an improved economy. However, the majority are introduced bills and resolutions—they are not yet passed, actionable legislation. Moving forward in the meantime An alternate path forward for state and local governments to take realistic action without a jurisdiction-wide Green New Deal is to remedy their own impacts and lead by example. A Green New Deal policy package that is customizable to emphasize local concerns can lead by example, focusing on government-owned buildings, infrastructure and assets, as well as incentives to guide the private sector in following suit. Such a package should be ambitious, cover transportation and buildings, and have an aggressive time frame. While the exact policy package would vary based on the goals of each jurisdiction, a typical package could include: All existing government buildings meeting high-performance standards All new government buildings achieving net zero Electrification of fleets Clean energy mandates Incentives for green industrial practices Residential weatherization grants and training Increased minimum wage for projects receiving public funds State and local governments are well positioned to capitalize on the many economic and quality of life benefits provided by Green New Deal-style legislation. In the absence of federal action, USGBC believes it is imperative that local leaders take this opportunity to create better communities while addressing economic 

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