United States Heading towards a Depression?

Governor of Arizona is talking about the possibility of a partial government shutdown.

 

Is the government raising taxes the only way to compensate for all the losses we are encountering right now just to show through statistics that there is economic growth? But in reality, there isn't because most people are having a hard time finding work.

 

Those are the times you cut taxes and give people that CREATE JOBS the incentive to do so. Raising taxes puts people out of work, and makes employers like me stop hiring.

 

Looking at the numbers for New york they might be more screwed than cali. What is the situation there right now?


When you consider the fact that the new york governor raised taxes like crazy to get more revneue and they will have that kind of a budget deficit, what are they going to do now? In fact raising taxes has killed california industry already. Thats why everyone and businesses has been moving out of california for the last few years and only illegals are moving in. California is becoming one big mexican sesspool.

 

Anyone find it ironic that only the Blue States are in trouble?

 

More sad than ironic. They appear to be learning resistant. Maybe they'll go completely bankrupt and finally have some common sense beaten into them.

 

California will have to issue IOUs in a week if lawmakers can't quickly solve a $24 billion budget deficit.

California Controller John Chiang: "Next Wednesday we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression," "The state's $2.8 billion cash shortage in July grows to $6.5 billion in September and after that we see a double digit freefall," Chiang said.

The California Legislature on Wednesday voted down $11 billion in proposed cuts to state services, sending members seeking a budget deal back to the drawing board.

http://news.yahoo.com/s/nm/20090625/ts_nm/us_california_debt

 

Has anyone paid attention to this data...that shows that certain states, and particularly Southern primarily Red States receive far more in Federal dollars than they pay to the feds in taxes.

Which states gain the most from the Federal government?
by plf515
Share this on Twitter - Which states gain the most from the Federal government? Wed Apr 29, 2009 at 03:29:23 AM PDT
Every state gets money from the USA and every state gives; but the amounts given and received don't balance. The state that gets the most per amount given is New Mexico (which gets $2.03 for each dollar spent), the state that gets the least is New Jersey (which gets $0.61

More below the fold

plf515's diary :: ::
At this site the Tax Foundation provides data on tax burden by state (note: I do not support the Tax Foundation - but this data seems sound) (also note, this is from 2005).

What might determine which states give vs. get the most? Well lots of things, but I chose these:
Poverty - states with low median incomes might get more

Republicanism - given that this data is from 2005, maybe states that supported Bush got more

Senatorial clout - hard to measure, but I used total years seniority of the two senators, as of 2004

First, a table of all the states, and what they spend for what they get


NJ 0.61
NV 0.65
CT 0.69
NH 0.71
MN 0.72
IL 0.75
DE 0.77
CA 0.78
NY 0.79
CO 0.81
MA 0.82
WI 0.86
WA 0.88
MI 0.92
OR 0.93
TX 0.94
FL 0.97
RI 1.00
GA 1.01
IN 1.05
OH 1.05
PA 1.07
UT 1.07
NC 1.08
VT 1.08
IA 1.10
NE 1.10
WY 1.11
KS 1.12
AZ 1.19
ID 1.21
TN 1.27
MD 1.30
MO 1.32
SC 1.35
OK 1.36
AR 1.41
ME 1.41
HI 1.44
MT 1.47
KY 1.51
VA 1.51
SD 1.53
AL 1.66
ND 1.68
WV 1.76
LA 1.78
AK 1.84
MS 2.02
NM 2.03


It would appear that a helluva of a lot of the RED states live off of federal government dole; Mississippi, Arkansas, Louisiana, Alabama, Kentucky, etc.

Of course a couple of other states w/ loud-mouthed radical GOP right wing voices get a lot of federal money...and pay little in taxes for it...Alaska, for instance.

It also seems that the states with budget problems as referenced above, California and New York being two examples...get little back for the tax money they send to the Feds.

It looks to me like the so-called RED STATES, with their so called fiscal prudence....actually practise a policy of living off the government dole.

It looks to me like the states with the loudest voices, and the big mouthed Conservative fiscal bull sh1tters about so-called fiscal responsibility practise enormous welfare to an unbelievable degree....just taking money from others.

Just another example of pure unadulterated Right Wing Extremist Political Bull Sh!t.

 

New jobless claims rose by 15,000 to a seasonally adjusted 627,000. Economists expected a drop to 600,000 claims. Continuing claims increased 29,000 to 6.74 million.

http://www.msnbc.msn.com/id/31543064/ns/business-stocks_and_economy

Warren Buffett Says U.S. May Need a Second Stimulus Package.

Buffett also warned in a CNBC interview that the U.S. may face “high rates of inflation” because of government spending designed to ease the financial crisis.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aS58Up2i8RFE

 

Now Buffett's comments are interesting and worthwhile. Frankly, if one twisted this into politicaly sparked commentary he simply addressed the two polar extremes that represent the big mouths of politics...who incidentally in aggregate, don't have anywhere's near the understanding of how big economics things work as does Buffett.

OTOH he suggests the govt might need to spend more money as a stimulus. OTOH he suggests that all that govt spending, which is borrowing after all, could lead to inflation.

Frankly, he is suggesting....spend the money...and protect against inflation. Obviously complex, difficult...but at least his statements are devoid of the rantings from the highly charged folks who seem to scream about stuff suggesting one alternative or the other and damned to anyone who disagrees with them.

IMHO, I'd follow him before any Dem or GOP loudmouth.

 

I wonder what reaction China will have to the US printing more money.

Geithner promised them a few weeks ago that we wouldn't do that. The Chinese students did laugh at him.

Obama also promised that from now on, the US would start pay as we go.

The 1st stimulus was a disaster. There is only $19 billion dollars of infrastructure projects that are shovel ready.

I'm wondering how we can afford another stimulus as only 4 months ago, the US passed a $787 billion stimulus package. On top of the that, there is a healthcare plan to pay for as well as the war in Afganistain.

Another issue is that we don't know what bailout is around the corner. Freddie/Fannie are bleeding money, and GM will need more money. We don't really know if the banks will be able to handle a worsening economic crisis. The stress test were rated to an unemployment rate of 8.8% and we have already passed that rate.

The recession in the early 1980s were a lot worse that the current recession in that unemployment peaked at 10.8% and at the same time inflation was 20%

 

I live in NM, have my whole life, and I'll tell you why we get so much government money. Poor minorities. It has NOTHING to do with how Republican we are. Most of our loud, outspoken politicians here are Democratic (hellooooo, Richardson) and it has been that way for some time. Democrats here enjoy using the "poor minority" excuse to get government money for EVERYTHING around here, and obviously, it works. We have so many Indian Reservations out here that I lost count. They make up a huge portion of the government money. The government works very closely with the Reservations and there's tons of money being dolled out for contracts, preservation, CASINOS, etc.

It's kind of odd that many Indians on the Reservations are living BELOW the poverty level, have very poor health, hardly have enough to eat, yet they build these multi-million dollar casinos on Reservation land. Now who do you think pays for that?

Hell, the government and the Reservations are such big business here that they teach special classes at UNM Law School to prepare future lawyers in settling disputes in the government/Reservation contracts and the special laws that the Reservations have in running their casinos. My sister-in-law graduated law school and there are HUNDREDS of jobs in government/Reservation/casion law, but NOTHING when it comes to regular criminal law.

And no, I'm not being racist. It's just the truth and basically so integrated into our lives here in NM that it's the norm now....it's sad though. They preach and preach that we need the government's money to feed our poor, which we do, but it ends up really helping nobody. Kinda the same exact thing that happened with Freddie and Fannie.....

You also have to realize that we have a lot of government-run facilities when compared to our small population. We have 2 huge labs, Sandia and Los Alamos, and we also have 3 military bases (Cannon, Kirtland, and Holloman). We have to make our top secret weapons somewhere. Why not NM where's there is MILES of NOTHING???

 

NAIL, MEET HEAD!!!

Keep in mind the ones begging for the money are the liberal democrats in the state legislature and at the state senate and congressional level.

Oh, and remember. The democrats at the federal level dictate where and how this money is spent, so if the state said they wanted to give it back; they could not.

If the state decided they wanted to pay down debt with the money, again they could not.

 

Its localized inflation, too...

These are among the first states to raise minimum wage, raise taxes, and demand high nominal dollar values before they can be satisfied with being "middle class."

As a result, real estate flies through the roof, wages fly through the roof, and you get screwed again by the progressive nature of the federal income tax system.

When compared to purchasing power indices (PPI) you'll find that the average wage of $30,000 in Oklahoma buys more than the average wage of $48,000 in urban California. Guess who has a bigger house and who has a bigger income tax bill?

 

That's part of the reason WHY I live in NM. I live far better off of my itty bitty salary than a lot of people do in NY or California. There's NO WAY IN HELL I would pay $200,000 to buy a 700 sq. foot apartment in a big city when I can buy a fully renovated 1600 sq. foot house in Albuquerque for $185,000 or even cheaper. If you have a 2 income household with each making $30-40k, you would be living pretty high on the hog here. Sure our salaries suck ass, but my money goes a lot farther. Not to say that NM is the greatest place to live, it is REALLY boring, but I'd much rather live comfortably, save some money, have BEAUTIFUL weather, than have the big city life....

 

Inflation peaked at 13 percent not 20 percent. And although the official unemployment was higher, the U-6 which is a more broad measurement and gives a much better situation of how people are doing in the job market is more than a percent higher than the 1982 high, based on mays numbers . In a year u-6 will probably be 5-10 percent higher than 1982. THe average amount of hours worked and the long term unemployed and the percentage change in unemployment rate are all time highs for post world war 2.

The only thing we don't have is the high inflation, but that soon will start and when it does EVERYONE well be feeling it not just those who got wage cuts or lost their job.

 

He obviously meant interest rates.

 

Firegirl:

You cited my post. You'll see I didn't cite NM, even as it receives the most in return for the dollars it sends to the feds.

In response to complaints and finger pointing from Mia who rips into Blue States such as NY and Cal for having severe budget problems I wanted to show that there are many ways to skin the cat.

The Red states in the solid south...dominate those states that take more in money than they give to the feds. In part they live financially off of a type of government subsidy.

The facts I showed have nothing to do with what Korr states. It is irrelevant. If real estate values go up in the highly populated states that means that the owners are paying more in state taxes.

If incomes go up in a state with big metro regions and expenses go up...it has nothing at all to do with sending money to the feds and getting it back.

If you can buyer a bigger house in more rural areas for the same money--big deal--everyone knows that...it has nothing to do with what I showed.

It merely shows how some states subsidize others.