AltAusterity Digest #55 July 5-11, 2018

Democratic New York congressional candidate Alexandria Ocasio-Cortez has criticized the austerity agenda in the U.S. and has called for significant state investment in the areas of healthcare, education and housing. Ocasio-Cortez, who holds an economics degree from Boston University, said recently: “I don’t think most of Congress understands how economics works” and has said that the problem is not overspending, but rather a misdirection of policy towards tax cuts and subsidies for the wealthy.

Ontario’s new Conservative government has scrapped a $100-million fund for school repairs and updates. In the city of Hamilton alone, repairs for things like lighting, water boilers and windows, have left the municipal school board rushing to find alternative sources of funding for the $2.15 million in spending that would have been covered by the fund. These cuts come in an environment where Ontario already has a repair backlog of approximately $15 billion.

The Institute for Fiscal Studies (IFS) in England has estimated that education spending per pupil has declined by 8% since 2010. The combination of rising pupil numbers and cuts to local authority support have resulted in staff layoffs and a backlog of repairs similar to the above story. Despite Department of Education funding being at its highest ever levels – rising to £43.5bn by 2020 – the IFS predicted that a 2%-4% rise in teacher pay could cost an additional £200-£400 million and push school budgets to the top of the political agenda.

A New York Times piece analyzes how New York City has subsidized major sporting franchises with free land, tax breaks and public money to build new stadiums. For example, the building of New Yankee Stadium, which opened in 2009, cost the Yankees $650.6 million, while public money and tax breaks supplied $1.186 billion. Many of these stadiums were subsidized with public money even after the 2008-09 financial crisis. In a city with some of the highest real estate costs in the world, the building of new stadiums and arenas has used billions of dollars not only for construction, but also in infrastructure developments specifically to benefit the sporting franchises.

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