Regular commenter here at the AEC linked us to this Boston Herald link. State and municipal debt is close to $5 Trillion - and you can pretty much tack it right onto the Federal budget deficit because the Feds are going to be picking up the tab.
Worse, the very folks that perpetrated this madness continue to point their finger at everybody else. Let's face it, we got here as a result of the something-for-nothing folks that are, even as I write this, doing everything they can to undermine the financial system to bring on their vision of the perfect world.
Nice shot, guys.
11 comments:
I think the Herald link is broken Greg. It should be:
http://www.bostonherald.com/news/opinion/editorials/view/20100623fiscal_insanity_rules/
Since we are all linking, where is that headline I found today or yesterday, about how the super-wealthys' net worth has essentially now been brought back to the levels they were prior to 2008 ....
There's lots of money to supplement Federal and state expenditures. The wealthy public just doesn't want to be taxed. Hell, I don't want to be taxed either. But if you want the benefits and services, someone has to pay for them. God knows how much money is being hidden in trusts and other shelters.
Repeat: there is LOTS of money available to be taxed for government spending.
If the rich, old farts want to flee to another country, I say "don't let the door hit you on the way out, pinko!"
Good idea bureaucrat! We could start with a healthy financial transaction tax. We had one from 1914 to 1966. It worked for some of the most prosperous times of the USA. In actual fact, all the extreme debt came afterwards except for a short itme during the Depression.
Read the numbers!
I think the #1 driver of the current malaise is the federal deficit. For years our dollars flowed offshore in search of cheaper labor and the only thing that allowed that to continue was the ability of those dollars to come back to the US. However, instead of those dollars flowing into US produced goods and services they flowed into government debt, primarily t-bills. That did nothing but deepen the problem by accruing interest.
Without that currency flow our ability to purchase foreign goods would have been limited by their willingness to purchase our goods, and free trade would have been mutually beneficial. As it is the government is hopeless I n debt and we are all going to continue to get hosed.
Dan,
Good review!! Free trade is not bad if the currency is hard money. The ability to print money allows the American consumer and uncle sam to buy goods and services that a more frugal currency set up would disable.
Anon,
One point that is brought up here continually is that to compare pre-peak production (early seventies and before) of oil to current economic debates is an exercise in futility. The major debt/deficit problem is oil. The only things taxes do is discourage investment and work.
Wall street journal
The Commerce Department said the U.S. deficit in international trade of goods and services increased 0.6% to $40.29 billion from a revised $40.05 billion the month before. Exports fell by $813 million, while higher oil prices helped to drive imports up by $1.61 billion.
The U.S. bill for foreign crude oil rose to $22.69 billion, the highest amount since October 2008. Imports by volume fell, but the average price per barrel climbed $2.81 to $77.13.
http://online.wsj.com/article/SB10001424052748704312104575298343320101692.html
This could also help explain why things are starting to get shaky again. I think the oil price spike was what really killed the economy in 2007-2008 and we are reaching that point once more. The light of high fuel prices exposed the darkness of our debt conundrum.
Hey Bur,
What will happen to the markets when they are force to divest to pay their taxes? Remember, they don't have bales of Benjamins or gold doubloons. They own stock and bonds and real estate. You are f^$*ing around with my retirement.
Regards,
Coal Guy
My entire pension and 401k/TSP is now dependent on U.S. Treasuries. This plus the IRA and other investments adds to $10,000/MONTH in retirement money for me. Think they'll pay me all that in 13 years, 6 months, when I escape? Those Federales are messing around with MY retirement. :)
The next 30 years will be similar to the 1966-82 period where the stock market went nowhere -- flatline. The world didn't end (the 1970s gave us DISCO!). And most of the money collected in taxes goes to old people who spend it on food and health care ... goes right back into the stock market anyway. :) Money doesn't stand still.
States and municipalities have defaulted before without being bailed out. What happens is the bond holders get screwed, and then the states have a hard time raising money in the future. Since GM has supported Detroit and Michigan for decades, bond investors should have paid more attention to the risk of these munis before buying.
Anon @ 4:58:
you keep commenting with identifying yourself... this is my 3rd request.
USE A NICKNAME if you do not wish to register. We don't do Anonymous here anymore. I am not interested in commentary from folks just looking to get a rise out of others.
should have read "without identifying yourself"
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