Fiscal responsibility is not a partisan issue. Enough with the demonization of “Democratic cities and states”
Sorry. No can do.
California, Illinois, New York, Michigan.
California – The state, which is the 8th-largest economy in the world, faces a $19 billion deficit. They resorted to paying bills with I.O.U.s last year, and it looks like they’re not afraid to do it again.
If things got bad enough, and California just stopped making debt payments, it’s likely the world’s financial system would get swept up in the inevitable chaos. But no one in the bond community is ready to concede that there’s a possibility the state would default. At least not yet.
The unspoken hope is that Washington D.C. would swoop in at the last moment to bail out both debtor and creditor. But the tide may be shifting. Washington may be distancing itself from this implicit guarantee.
Illinois Governor Pat Quinn recently said that during his trip to Washington for the National Governors Association meeting it was made clear to all governors present that they should be fully prepared for less money to come from the federal government than they were hoping for.
I’m still not convinced, but I guess it’s just a waiting game to see what he will do 
Shhh🤫… your bias is showing.
As President Trump and the House GOP propose tax and spending plans that include sharp cuts to income taxes, it’s important to explore what happened when Kansas Governor Sam Brownback implemented similar cuts in 2012. The Brownback plan aimed to boost the Kansas economy, but instead led to sluggish growth, lower than expected revenues, and brutal cuts to government programs. The Brownback tax cuts, one of the cleanest experiments for measuring the effects of tax cuts on economic growth in the U.S., were eventually reversed by a Republican-controlled legislature as a failure.
An Associated Press Fact Check finds it’s actually the other way around. High-tax, traditionally Democratic states (blue), subsidize low-tax, traditionally Republican states (red) — in a big way.
Here are the 10 states with the most welfare recipients:
- New Mexico (21,459 per 100k)
- Louisiana (17,293 per 100k)
- West Virginia (17,155 per 100k)
- Mississippi (14,743 per 100k)
- Oklahoma (14,678 per 100k)
- Alabama (14,674 per 100k)
- Illinois (14,007 per 100k)
- Rhode Island (13,967 per 100k)
- Oregon (13,756 per 100k)
- Pennsylvania (13,613 per 100k)
https://worldpopulationreview.com/state-rankings/welfare-recipients-by-state
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I’m not really sure what you’re asking. If you didn’t like Obama, you likely won’t like Biden’s administration. It’s 4 years later and a lot has changed. Maybe he’ll bring Obama into the cabinet. haha. I think he’s going to get a SC seat
From what I can see this whole funding other states discussion doesn’t make sense in general. States with larger, younger populations and more industry will contribute more greatly than states with smaller, older populations and struggling economies, which will consumer proportionally more welfare and medical spending. I’d argue business stays in those high tax states despite the tax, not because of it.
Then a state’s inability to meet its obligations is a different matter, isn’t it - my understanding is that state coffers are funded by state taxes. The cost of that will be borne primarily by the taxpayers in that state. States like NY, California and Illinois do have among the highest tax burdens. Michigan seems to have moderate taxes. If you’re arguing that higher tax rates are better, I’d like to see how Michigan can improve its financial position by doing that.
Of course debt isn’t inherently bad…
As for that Kansas tax article, it seems to be suggesting that “this tax cut didn’t stimulate the economy, therefore tax cuts don’t work”? From what I can gather it’s hardly demonstrative. It was effectively the elimination of tax on small business profit at the state level, and its primary flaw seems to be it was poorly designed and got exploited.
Trump’s whole MO has been a candidate promising the equivalent of affirmative action for the welfare states.
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The Kansas example is demonstrative in that every incentive it was supposed to create failed to materialize. Economic growth lagged behind neighboring states. Business creation actually declined. This was a perfect case study as you could compare Kansas’ implementation of supply side economics with neighboring states that did not enact such a policy.
Job Growth Lagged behind neighboring states
Economic growth lagged
Creation of small business actually declined (LLC, Sole propoterships, and S Corp)
New businesses lagged behind neighboring states
There is also plenty evidence at the federal level. A study over 65 years of the tax rates show that tax cuts do not lead to Economic growth. The issue I have with Republicans is that they cling to this supply side economics BS that was literally presented to Reagan on a napkin, yet it’s never been proven to work. At best it creates a temporary incentive like an asset bubble in the stock market that quickly fades as businesses adjust to new tax levels. The tax cuts never pay for themselves and lead to deficits. Businesses will expand because there is a market need, not because of tax cuts.
https://www.google.com/amp/s/amp.theatlantic.com/amp/article/262438/
Businesses choose location based on the talent pool and target market. I don’t think taxes really come into it unless the taxes are prohibitively high. I saw study once that effect did not occur until taxes were above 50% which isnt really an issue in the US. At that point the labor pool would leave too. Nor do I think just because Kansas has low taxes will mean businesses will flood there if the talent is not there.
I am definitely not arguing that. The world is much more complex than that. My argument is that effective allocation of resources is more important than the tax rate itself. Why is that I have a lower income tax rate in Taiwan than the US yet I’m able to benefit from socialized healthcare? To me, that is a more efficient allocation of resources. The US instead chooses to allocate those resources to military spending/endless wars, corporate subsidies and welfare programs. I’d argue if they invested more in education and healthcare then the burden of welfare programs would decrease.
The purpose was to show the ridiculousness of demonizing Democratic states and Democratic cities. It’s an oversimplified petty and childish argument. For every example that attempts to argue it’s the Dems fault, there is a counter example. Proving policy should be tailored to the needs of each state, municipality etc.
The same goes for big government vs small government. The argument should be right size government, and the right allocation of resources.
Yep, and the important thing to remember in all these kinds of discussions is that it doesn’t happen in a vacuum. In basic economics it’s quite logical to expect tax cuts to encourage economic growth. Why would Kansas’ then do the opposite? It could be some completely unrelated, it could be due to the cuts in government expenditure. Or maybe the 5% or whatever tax break wasn’t enough of an incentive and no one felt like it.
I think it would honestly be almost impossible to prove because there are so many external factors.
Competition is another factor though. And I think that’s particularly important for industries like manufacturing. If you’ve only got enough resources to go into business in one state, then all else equal you’ll go with the one with the lowest taxes. If you can only go into one country, then all else equal you’ll go with the country with the lowest taxes.
That being said for an industry like airlines, I reckon you could tax to 80%, and they’d still be there given there’s still some money to be made.
But that after tax profit has to still be better than the RoI you can get from a bond, term deposit or taking your capital someplace else.
Yeah I agree with most of that. Solving those issues that make more gov spending necessary is probably the best investment, but what’s most appropriate, efficient and fair is very difficult to determine. I think it’s better to be on the conservative side, because government spending is typically inefficient. I suspect those states mentioned are pretty liberal with their spending. Just throwing money at problems doesn’t make them go away.
The article goes further to explain why the tax cuts had the opposite effect, as well as to explain external factors.
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Budget shortfalls led to a downgrading of bonds creating economic uncertainty.
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Inability to provide basic services - state employees fell by 4% and spending per resident by 5.5%
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Education - higher education was cut 2 percent per student.
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Crumbling Infrastructure - $1Bn was transferred from the highway fund and highway projects put on hold.
Had Kansas cut spending on state programs by those amounts instead, even fewer private-sector jobs would have been created, as teachers, nursing home aides paid with Medicaid funds, and private road maintenance contractors compensated with Highway Fund dollars would have had that much less money to spend in local stores.
Deeper tax cuts would have to led to even greater cuts in essential services. Considering that in the federal study over 65 years tax cuts have failed to grown the economy, and revenue declines have led to giant deficits the conclusion is pretty clear.
All else being equal never occurs in real life. There are many factors that go into a business deciding to locate in a certain area. And if the local government is unable to provide basic services and infrastructure then that will certainly be a deterrent as well. If they can provide better services and infrastructure with a lower tax rate than more power to them.
Just cutting money across the board also doesn’t seem to solve the problem either since you end up cutting basic services. I don’t buy the premise that government is inherently inefficient. Efficient allocation shouldn’t be that hard. If students are falling behind re-allocate to education. If the populace is ageing, re-allocate to healthcare. How do you prevent waste and just throwing money away? Well in my opinion we should be managing each income stream separately, and measuring the ROI rather than one giant pool of federal/state revenues.
All the people who took Economics 101, and never made it to 201.
It looks to me as if it stems from the exploitation. Shortfall in expected income, leading to cuts in spending leading to reduced economic activity.
I mean that’s kind of a given since government expenditure is a component of GDP.
I think the only thing that data shows is that those particular fiscal measures in those particular circumstances at that particular time failed to have a significant impact. But once again there are so many other things to take into account. I can’t say I’m familiar with the history of the US economy. The first question I’d ask is what was the purpose of those cuts. Looking at the graph the 2001 tax cuts were after a significant drop (albeit from a significant high). Where they in response to a downturn?
Have you ever been in charge of spending someone else’s money? It’s a lot easier to spend money when you haven’t worked for it!
When you go in to business you have to minimise costs in order to be able to compete, but most government owned enterprises don’t have competition and don’t have so much incentive to maximise efficiency.
In a private company, a manager is generally rewarded for reducing costs (given it doesn’t lead to poorer performances elsewhere). In a government department you’ve got to spend your entire budget or they’ll think you don’t need it and allocate you less next time round.
Reallocate from where? That’s another issue. A new problem comes up that requires gov spending, do you cut spending elsewhere, increase taxes or increase debt?
I don’t get what you mean by the last bit. As in measuring the impact of the income from each type of tax?
And so I said “in basic economics…”
A summary of the bill provided by the office of House Speaker Nancy Pelosi says state funds will be allocated according to a state’s share of its unemployment.
Which is wrong. At very high rates, it is true- about 70%-plus. At lower rates, no. For example, the Trump tax cuts did not lead to an increase in investment; they were basically just pocketed.
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That’s not true. The general principle is that it will result in growth, determinant on other factors such as how it’s funded or if the economy is close to full capacity, and it’s more likely to have an impact when rated are higher.
The trump tax cuts appear to have had a modest positive effective on economic activity
I just want to say thanks @Malasang88 although we have very different views, here I enjoyed discussing taxes and it helped me think over it more without animosity
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They didn’t.
In the year following the tax cut, business investment increased—but not by nearly as much as the tax cut proponents’ predictions would have implied. Furthermore, a study by the International Monetary Fund (IMF) concluded that the relatively healthy business investment in 2018 was driven by strong aggregate demand in the economy—not the supply-side factors that tax cut proponents used to justify the tax cut. In other words, the increase in business investment from the relatively weak 2015-2016 period seems like another example of an economic indicator returning to more-normal levels.
Worse, business investment has slowed more recently. The most recent data show that private nonresidential investment actually declined in the second quarter of 2019, [contributing to an overall slowdown](https://www.bloomberg.com/news/articles/2019-09-17/meager-corporate-spending-appetite-boosts-u-s-recession-risk?
Cooper: One in six Biden voters would have changed their minds if they had known the full story
November 26th, 2020 | by Clint Cooper
The Associated Press / President-elect Joe Biden introduces his nominees and appointees to key national security and foreign policy posts at The Queen theater earlier this week in Wilmington, Delaware.
Failed 2016 Democratic presidential candidate Hillary Clinton spent the three years after her defeat providing anyone who would give her an audience some two dozen different excuses why she did not win. As such, she has wound up, as one pundit said recently, caricatured and largely irrelevant.
President Donald Trump, if he continues after he leaves office his mantra about the election being stolen, could find himself in the same boat as the woman he berated for doing the same thing after her loss.
But Clinton had something the president never did — the full-throated, pull-out-all-the-stops support of the national media.
What if the Republican Trump had had even a neutral media, one that gave him credit where credit was due and investigated Democratic challenger Joe Biden where investigation was necessary?
Media Research Center, a conservative watchdog organization, tested that theory recently in a poll of 1,750 voters in seven swing states.
What they learned in an admittedly small survey was that one of every six Biden voters (17%) said they would not have voted for him had they known the facts about several of the news stories the national media refused to investigate thoroughly because they might have hurt his candidacy.
Had one of six voters not voted for Biden in the swing states, or voted for Trump instead, the election would have turned out differently.
The survey showed that 45.1% of Biden voters were unaware of the financial scandals of Biden’s son, Hunter Biden, and how Hunter’s business had been wrapped up in Biden’s work in foreign affairs while vice president under President Barack Obama.
It further showed 35.4% of Biden voters were unaware of his former aide Tara Reade’s allegation that Biden sexually assaulted her on Capitol Hill in the 1990s, and 25.3% of his voters didn’t know that Sen. Kamala Harris, D-California, Biden’s vice presidential running mate, was ranked America’s most “progressive” senator in 2019.
Meanwhile, the same voters were clueless about Trump’s accomplishments because the national media refused to tell them.
More than half of those surveyed, 50.5%, did not know the United States became a net exporter of oil for the first time in 2019. Nearly half (49%) of Biden voters had no idea economic growth rebounded by 33% in the third quarter, which was a record, albeit one caused by the global pandemic lockdown that forced a 31.4% plunge in the second quarter.
Further, 45.3% of respondents who voted for Biden had no idea the Trump administration had helped broker historic agreements between Israel and Arab nations, and 39.4% of the same voters weren’t aware the five consecutive pre-election jobs reports — from June 5 to October 2 — showed a record 11.1 million jobs were created in the summer and fall.
Incredibly, and perhaps most tellingly since the president was given widespread false blame for the spread of the COVID-19 virus in the U.S., 36.1% of Biden voters said they did not know about the administration’s critical role in promoting coronavirus vaccine research and the development of a vaccine through Operation Warp Speed.
National media bias against Republicans and conservatives is nothing new. Sadly, it goes with the territory.
As the Media Research Center pointed out in just one example, in 2004 Newsweek’s Evan Thomas boasted the media would go all in for Democrats John Kerry and John Edwards, and crowed it’s “going to be worth maybe 15 points.”
What might it have been worth in 2020, when the figure the national media wanted to take down was the first Republican president who didn’t take the media bias lying down?
Indeed, one only has to be a casual observer of media idiosyncrasies to see how the lions who snarled at Trump have become lambs before Biden.
They have praised the Obama administration retreads he has selected for his Cabinet, not taken him to task for the few times he’s met with the media since Election Day and lobbed softballs his way when they did get the rare chance to question him. One news reporter recently made a big deal out of his navy blue socks with lighter blue dogs on them. Seriously.
The media is not likely to give up their bias anytime soon, but it’s fascinating to see how the results might have been different if they did.
Trump, though, can’t change that. Now it’s up to him to whether he becomes, as he referred to Clinton, “crazy,” “crooked” or “lyin’” because he’s unable to accept defeat.
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Wait, is what you wrote saying that large samples of people who’d voted for Biden were misinformed, dare I say ignorant, morons? I’d hate for the media to paint D voters as educated idiots for the next 4 years. Would “the deplorables” be applicable?