Will NY be the next state handing out IOUs?
- State tax collections for the first
quarter of 2009 showed a drop
of 11.7 percent, the sharpest
decline in the 46 years for
which quarterly data are
available. Combining the
Census Bureau’s quarterly data
with its annual statistical series,
which extends back to 1952,
the most recent decline in state
tax revenues was the worst on
- After adjusting for inflation,
legislative changes, and known
anomalies, tax revenue
declined in 47 states.
- The personal income tax
decline was particularly sharp,
an unprecedented 17.5 percent
in nominal terms. The
inflation-adjusted decline in
state personal income taxes
was the greatest in the 46 years
for which quarterly data are
- Early figures for April and May
of 2009 show an overall decline
of nearly 20 percent for total
taxes, a further dramatic
worsening of fiscal conditions
nationwide. Preliminary figures
for the state fiscal year 2009
indicate around 8 percent
decline in total taxes, 13
percent in personal income
taxes, and 5 percent in sales
Info from the Rockefeller Institute of Government.
Many people are going to look at the above numbers and go, “See the stimulus didn’t work, so we should just let the market, I mean the economy correct itself.”
I don’t agree. To me the above logic is comparable to a doctor giving a patient with syphilis half of a bottle of penicillin and then saying, “You’re not better, so we better just let it run it’s course.”
I don’t know about you, but I don’t want to die from syphilis.
I think the second stimulus was too conservative and not taking into account how incompetent George Bush truly was. You know how Obama likes to be positive.
So I’m voting for a third stimulus. I’m not an economist, but from looking at the numbers above it looks like it wouldn’t be a rush to judgment (the people who talk this give it time silliness assume that you don’t know how to read the above charts or any charts at all that don’t come with naked people or movie stars) to assume the conservative stimulus package that was passed isn’t going to quite give the economy the jump start it needs, unless someone plans on killing off all of the unemployed people via a spectacular disease or fancy war.
The people who don’t want another stimulus give very vague reasons, which mainly center on things are getting better.
They don’t look better to me.
But that’s stupid. Here why it is stupid put more succinctly by Harlan Green:
“The main inflation worry has been about the enormous amount of government debt. But the U.S. ran twice that amount of debt as a percentage of GDP during World War II that got us out of the Great Depression. Japan’s debt load is even higher.
And we cannot have inflation without rising wages and salaries—which make up more than 80 percent of incomes. Not only have wages and salaries barely kept up with the inflation rate for more than 30 years, but the jobless rate of this recession will reduce incomes even more. The average work week has now dropped to 33 hours—when it was 40 + hours during boom years.”
According to the above Rockefeller Institute of Government Study personal income tax fell by 17%, so I’m thinking that means fewer people are working and until that number comes back up (which doesn’t look to be anytime soon) we don’t have to worry about inflation.
Let us look at the Great Depression. In the Great Depression there was a real fear of inflation aka preserving the dollar at all costs. The government decided deflation was the way to go. This is why it lasted so long. (It’s more complicated than that, but this is just a blog.) The gov’t didn’t inject enough dollars, so people kept losing jobs, then everything kept getting worse and worse, BUT the upside is that people who already had cash. People whose banks didn’t fail and had fixed incomes (i.e. trustfunds,) came out smelling like roses. Their money rose in value. (It didn’t so much rise, but their purchasing power increased.)
Rich people already know what is going to happen. They know you’re going to be “responsible” and say we should buckle down and say no to more stimulus. The rich plan on staying rich which is why in September of 2008 they took 550 billion dollars out of their US Money Market Accounts.
So you might understand why a selfish rich guy might be anti-stimulus, because if this country continues to do poorly, his dollar ends up worth more which makes him even richer. Don’t listen to rich people who don’t have degrees in economics or non rich people who have ties to the stock market and work for rich people.
Here are the people with credentials who agree with me that another stimulus is needed.
It is bad out there, but we can fix it, but we need more help from the federal government.
Hopefully this current administration will not allow our whore of an economy to die of syphilis.
The economy promises next time to wear a condom.
By Browne Molyneux