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State Tax Revenues Plummet By $87 Billion, Biggest Year Over Year Decline In History; Record State Tax Hikes In Progress

Tyler Durden's picture





 

The Center on Budget and Policy Priorities has released a report "State Tax Changes in Response to the Recession" in which the center notes that "national recession has had such a devastating effect on state finances that states took in $87 billion less in tax revenue from October 2008 through September 2009 than they collected in the previous 12 months. This 11 percent decline, the steepest on record, resulted from the impact on tax collections of lost jobs, reduced wages, and lowered economic activity." And here we are, missing the forest for the Greek tree, and discussing evil CDS speculators' role in Greece barely able to make a €5 billion bond auction, when we should be all over the evil Municipal CDS speculators wreaking havoc in our own back yard. 

And it actually gets worse: as we have pointed out, states are now running on fiscal fumes, as record unemployment insurance claims bleed the vast majority of state not only dry, but well in credit to the Federal government. "At the same time, the recession has driven up the number of people needing various state services. This, along with the requirement that states have balanced budgets, has increased the pressure on states to deal with the unprecedented revenue shortfalls in a variety of ways. Nearly all states have cut spending. In addition, most have opted for a balanced approach that includes revenue."

So while Obama is about to break all campaign promises about taxing everyone, let alone those who make under $250,000, individual states have already raised taxes by substantial amounts in an unprecedentedly short period of time.

In 20 states, tax changes are providing a significant boost to revenues — that is, they are producing additional revenue of more than 1 percent of the prior year’s total revenues. Ten of those states have raised taxes by more than 5 percent of the prior year’s collections: California, Delaware, Florida, Indiana, Massachusetts, Nevada, New Hampshire, New York, North Carolina, and Oregon. Personal income taxes and sales taxes, the two largest sources of state tax revenue, experienced the greatest changes. Overall, 13 states raised new revenue from personal income taxes, 17 enacted sales tax increases, 22 increased excise taxes on tobacco, alcohol, or motor fuel, 17 increased business taxes, and 24 increased fees or other taxes.

Surely no sane man can believe that the tax respone will be appropriate or meaningful, as ever more people decide instead to either cheat, or to outright decline to pay these exorbitant tax increases. But at least we can now proudly tell Papandreou that austerity has come to the US as well.

And to save the mainstream media some time in finding the next scapegoat, we present the Municipal CDX index.

Just in case it is not obvious to the ambulance chasers, here is tomorrow's MSM headline bold, ALL CAPS glory: OH NO, MUNICIPAL CDS IS SURGING! KILL THE CDS TRADERS, KILL THEM ALL!!!! IT IS NOT THE STATES' FAULT THEY ARE ALL BANKRUPT, IT IS THOSE SPLIT-TONGUED, SULFUR-SMELLING SPECULATORS WHO ARE WREAKING MARKET HAVOC!!!

Here's an idea - why not just sell MCDX? If you think the market is so mispriced, just take the other side of the trade.

Ugh, logic.

Full report detailing the collapse in state tax receipts.

 

 


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Mon, 03/08/2010 - 14:22 | Link to Comment Sancho Ponzi
Sancho Ponzi's picture

We just received the property tax bill for the local warehouse, and guess what, it reflects a 40% increase over last year. Of course we'll contest the valuation, but really, 40%?

Pffffftttttt

Mon, 03/08/2010 - 14:37 | Link to Comment Mr Lennon Hendrix
Mon, 03/08/2010 - 15:43 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

"It rubs the lotion on it's skin, or else it gets the hose again."  

Aren't we already getting hosed?

Mon, 03/08/2010 - 15:49 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Over and over and over.............

Mon, 03/08/2010 - 14:45 | Link to Comment umop episdn
umop episdn's picture

Same thing happened to me with my two acres of rural doomstead, except my property taxes more than doubled. I live in one of the no-tax increase states in the Babble Belt, too!

Mon, 03/08/2010 - 15:49 | Link to Comment Anonymous
Mon, 03/08/2010 - 14:23 | Link to Comment fuu
fuu's picture

It is all burning now.

Mon, 03/08/2010 - 14:34 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Torching?  or crowning?  There is so much smoke, it is hard to see.  ;)

Mon, 03/08/2010 - 17:16 | Link to Comment WaterWings
WaterWings's picture

Yep. Slow burn for a lack of oxygen - "backdraft" if you open the door to take a look.

Nobody wants to believe the fireman these days:

http://www.youtube.com/watch?v=kaIilh_7nFI

Mon, 03/08/2010 - 14:32 | Link to Comment TraderMark
TraderMark's picture

No worries.  I am enjoying the news stories about the need to raise rates, taxes, and the like while never pointing out the disparity in pay and benefits between public and private workers.  It's all good... just pay up... it is only right that Joe Public Employee 6Pack shall retire at age 56 with full benefits and pension. 

Mon, 03/08/2010 - 14:51 | Link to Comment Postal
Postal's picture

Well, I work for the gov't. But since there's so many alternative options in the private sector, why don't you hire me?

Mon, 03/08/2010 - 15:17 | Link to Comment crosey
crosey's picture

Have you checked your USPS financials lately?  Might want to get your resume ready for UPS.

Mon, 03/08/2010 - 17:29 | Link to Comment Whizbang
Whizbang's picture

you can bitch all you want about government employees. At least we are doing some work. The rest of the sad sacks out there have been collecting (welfare) unemployment for the last two years.

Mon, 03/08/2010 - 18:19 | Link to Comment Anonymous
Mon, 03/08/2010 - 19:03 | Link to Comment Postal
Postal's picture

I don't disagree that we gov't type work off of the taxes of the rest.

My complaint is with the hypocrisy of the criticism: If Alice doesn't want me working for Bob, she should hire me herself. Otherwise, she should shut the hell up and be thankful I'm not doing other "work": Growing weed, harboring illegals, taking "pictures" of her kids, getting together with other unemployed to riot... The list goes on.

I have yet to have even one positive response to this proposal: If you don't want me working for the government (and being paid with your taxes), then you are welcome to extend a offer to employ me in the private sector. Unless and until you are willing to provide an alternative, quit yer bitchin'.

Mon, 03/08/2010 - 19:13 | Link to Comment Anonymous
Mon, 03/08/2010 - 19:18 | Link to Comment mnevins2
mnevins2's picture

"I have yet to have even one positive response to this proposal: If you don't want me working for the government (and being paid with your taxes), then you are welcome to extend a offer to employ me in the private sector. Unless and until you are willing to provide an alternative, quit yer bitchin'.

You're kidding, right? Otherwise, your "logic" leads to the govt hiring EVERY unemployed person in the country?!? Why don't all of the "private sector" employees quit and then get become "public sector" employees?

Any idea where the money will come to pay them?

Mon, 03/08/2010 - 20:53 | Link to Comment Anonymous
Tue, 03/09/2010 - 09:31 | Link to Comment chumbawamba
chumbawamba's picture

That dude scared me once!  I still owe him a punch in the face.

I am Chumbawamba.

Mon, 03/08/2010 - 22:11 | Link to Comment Anonymous
Tue, 03/09/2010 - 09:41 | Link to Comment chumbawamba
chumbawamba's picture

Here's a civics lesson for you, since that didn't seem to be a prequalification for whatever job you're currently performing on my dime.

(This works no matter what country you live in, as long as you subscribe to the concept of Liberty.)

We, as in those here posting messages, including you, are The People.  Once in a while We decide to form a government, and in this iteration here in the USA We have chosen a government by the People, of the People, for the People.

Notice, now, it says FOR the People, not For Postal, or For Those Whom We Hire To Fulfill The Rolls That Such Government Entails.  No, it's FOR The People.  It's for US.

Our consent is the fuel of the government.  Without our consent, there is no fuel, and therefore there is no power.  As long as We consent, you have a job.

Well, guess what?  We no longer consent.

Go grow a garden.

I am Chumbawamba.

Tue, 03/09/2010 - 11:14 | Link to Comment Anonymous
Tue, 03/09/2010 - 01:53 | Link to Comment Anonymous
Mon, 03/08/2010 - 15:18 | Link to Comment Greyzone
Greyzone's picture

The notion of "globalism" is nice but it totally does not mesh with reality. Globally open markets would make sense in a world where laws were largely the same and enforced in the same manner, meaning contract, labor, and environmental laws.

Instead, because these huge disparities exist between governments, all that has happened is wage arbitrage, moving jobs out of wealthier nations into poorer nations where a corporation can pay some poor guy $1 a day to make tennis shoes or assemble PCBs. Indeed, this destruction of the US middle class was predicted decades ago by people who saw the lie of "globalism" for what it was - a play to further enrich the very wealthiest while also exploiting weak or nonexistent labor laws (including child labor) and environmental laws. Indeed, look at China, an ongoing environmental disaster as all heavy industry has moved to Asian nations where weak laws allow massive dumping of toxins directly into the local ecosphere. And further, weak individual liberties and lack of property laws ensure that none of the "little people" can sue against such gross acts of negligence.

Those nations that have done better are those that have deliberately taken steps to protect production jobs inside their own borders. Germany is one such example.

It is now too late to save the middle class in the United States. All that will be left will be the rich and the poor. And while most of those reading ZH don't admit it or even realize it yet, they too will be among the poor.

Austerity is coming to the United States too. And then not only will the private sector good jobs be gone but the public sector ones will go as well.

That's about when I expect the US Congress to start issuing titles of nobility. After all, if we're going to do a high tech feudalism, we may as well have all the trappings, right?

Mon, 03/08/2010 - 16:39 | Link to Comment kwvrad
kwvrad's picture

Sad but true... even IF we tried saving the middle class, it'd take years, after all mechanics, machinists,plumbers ect all the tradesman jobs take many years to become 1,

a good mechanice/machinist takes at least 10 years in the trade before you truly know what you are doing...and we simply donot have that kind of time to do it in...

Mon, 03/08/2010 - 23:27 | Link to Comment Anonymous
Tue, 03/09/2010 - 09:46 | Link to Comment chumbawamba
chumbawamba's picture

Austerity is certainly coming to America.  But those who had the foresight to acquire hard money like gold and silver when they could will be a little less austere.

I am Chumbawamba.

Mon, 03/08/2010 - 14:54 | Link to Comment SteveNYC
SteveNYC's picture

Just look at the stock market SOAR on all this good news......

Mon, 03/08/2010 - 23:16 | Link to Comment Masked Man
Masked Man's picture

Pathetic attitude. Ask for a raise from your employer instead of complaining that gov't workers are "overpaid". The only reason public jobs now seem so "well paid with great benefits" is that private jobs have been gutted. Gov't jobs were not desirable jobs 30 years ago. Even today in many professional fields, entering government work pretty much kills the resume. Wait another 20 years and even these professional jobs will be more desirable in the gov't sector.

Tue, 03/09/2010 - 00:49 | Link to Comment Anonymous
Tue, 03/09/2010 - 08:13 | Link to Comment Anonymous
Mon, 03/08/2010 - 14:32 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

'Merica getting hit from all sides!  "Give us money to pay the banksters!  Give us monie to give the government!  Pay for cable to watch the Oscars instead of putting food on yer family (yes I said it)!  Give your monie to help Haiti/Chile/Turkey/Sesame Street.  Give us all your damn monies!"

Khali better start printing new monies in a state bank or else China will use their IMF gold they just bought at $1125 an OZ to buy the whole state.  Cali, can I make a suggestion?  Print your new monie on hemp paper (obviously legalize Cannabis) and back the currentsea with gold/silver/PMs/hemp.  You can do it!

Mon, 03/08/2010 - 15:11 | Link to Comment seventree
seventree's picture

 Print your new monie on hemp paper

Brilliant! Print CA state scrip on ZigZags. It will always be worth something.

Mon, 03/08/2010 - 14:33 | Link to Comment 10044
10044's picture

Can they tax you more than once after filing?? Going retro-active or some summers-geithner-barry rule sheitster

Mon, 03/08/2010 - 14:36 | Link to Comment Sancho Ponzi
Sancho Ponzi's picture

As I recall, there was a Fed retroactive tax increase during the Clinton administration.

Mon, 03/08/2010 - 19:35 | Link to Comment carbonmutant
carbonmutant's picture

Collection may be a problem... Not everybody has a home to live in these days.

Mon, 03/08/2010 - 14:34 | Link to Comment sodbuster
sodbuster's picture

Handy Dandy News Definition Interpreter:

Good news..................good news

No news......................good news

Bad news....................good news

Really horseshit bad news.......good news

 

So according to this it's.......let's see...add 3, carry the one........GOOD NEWS!!! Praise be! Hallelujah! We should commence upon a 1.5% rally, immediately.

Mon, 03/08/2010 - 14:39 | Link to Comment faustian bargain
faustian bargain's picture

Recession? What recession?

Mon, 03/08/2010 - 14:43 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

yeah, Green Chutes!

Mon, 03/08/2010 - 14:53 | Link to Comment Postal
Postal's picture

It must be bad. Even CNBC is headlining the budget mess (at least on the website). I really miss the cheerleading. It might be fantasy, but I do feel better. ZH can be so depressing--accurate, but depressing.

Mon, 03/08/2010 - 15:50 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

"ZH can be so depressing--accurate, but depressing."

And thus precisely why the vast majority embrace Zombie-land. Being anesthetized during the ass reaming is always preferable to being wide awake and screaming bloody murder.

Let's place blame where it belongs. If facts are depressing, maybe it's not the speaker of the facts but the facts themselves that's the problem. But of course, we aren't much good at anything when we're falling down stinking drunk, are we? Thank God I was too drunk to see that car run over me.

Thank God indeed!

Mon, 03/08/2010 - 16:16 | Link to Comment Lux Fiat
Lux Fiat's picture

As others have noted on other occassions, there are Treasury auctions this week.  CNBC is just being helpful by highlighting some facts about our financial and economic situation, versus verbally mugging the occassional unsuspecting guest who, gasp, decides to actual call it as they see it.  Don't worry, they'll have their smiley faces back on come Friday morning, unless something really bad does break loose.

Mon, 03/08/2010 - 19:38 | Link to Comment carbonmutant
carbonmutant's picture

The only reason it's depressing is that nobody is doing anything about it.

Mon, 03/08/2010 - 14:39 | Link to Comment swamp
swamp's picture

The banksters covered up the debt but the debt was still there. The big drop in revenues will continue, but the decrease in revenues trails enormous bubbles and windfall revenue for years, that was spent in excess and no prudent reserves were not set aside. Austerity? The government has spent lavishly with puff programs, fat salaries and stratospheric pension programs far in excess of the private sector. The massive spend spree covered every entitlement, perk, interest group and fantasy imaginable. The base number for the backdrop was the blow off top, not an average and not sane.

Mon, 03/08/2010 - 14:42 | Link to Comment Anonymous
Mon, 03/08/2010 - 16:09 | Link to Comment Bam_Man
Bam_Man's picture

Just out of curiosity, how much will that monthly ticket cost after May 1?

I did the commute between Princeton and NYC Penn Station for several years back in the late 1980's when the monthly ticket was $165.

Mon, 03/08/2010 - 16:41 | Link to Comment Anonymous
Mon, 03/08/2010 - 16:48 | Link to Comment Bam_Man
Bam_Man's picture

Yikes.

Then there is the parking at the station as well.

Mon, 03/08/2010 - 17:38 | Link to Comment Whizbang
Whizbang's picture

Metro just upped fares by about the same amount. Brutal.

Mon, 03/08/2010 - 14:44 | Link to Comment walküre
walküre's picture

They can try.

Of course it won't work.

Tax increases to support government spending levels are never a good idea.

Make no mistake, if you don't "give" your "fair share" voluntarily. The government will take it by way of confiscation.

Stage exit.

Mon, 03/08/2010 - 14:45 | Link to Comment Fritz
Fritz's picture

Just another great reason to ramp the S&P back to all time highs.

Mon, 03/08/2010 - 14:50 | Link to Comment koaj
koaj's picture

dear governor christie

 

cut faster

 

thanks...taxpayers of NJ

Mon, 03/08/2010 - 15:25 | Link to Comment SmalleyD
SmalleyD's picture

+100

Tue, 03/09/2010 - 00:57 | Link to Comment Anonymous
Tue, 03/09/2010 - 01:08 | Link to Comment Anonymous
Mon, 03/08/2010 - 14:52 | Link to Comment AnonymousMonetarist
AnonymousMonetarist's picture

No worries...

Tis the Doritos model of monetary policy...

“Crunch All You Want, We’ll Make More”

Mon, 03/08/2010 - 14:53 | Link to Comment AnonymousMonetarist
AnonymousMonetarist's picture

Which is itself a corollary of the Federales Pringles policy:

'Once You Pop You Can’t Stop'

Mon, 03/08/2010 - 14:54 | Link to Comment AnonymousMonetarist
AnonymousMonetarist's picture

Which lastly will result in Main Street coming to grip with a De Beers reality ...

'How else can two months’ salary last forever?'

Mon, 03/08/2010 - 14:59 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Gold?

Mon, 03/08/2010 - 16:08 | Link to Comment faustian bargain
faustian bargain's picture

With perfect synthetics, the mined-diamond industry should be fearing for its life.

Mon, 03/08/2010 - 19:01 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

So why isn't it?

The diamond industry (in particular de Beers) has been artificially creating a thin supply of diamonds for years, decades in fact. Every time there is a major diamond discovery, de Beers and it's various front companies and lackeys rush in and throw ridiculous amounts of money at the principals to take over the new find. Then it starts a double barreled process of slowly developing the new mine while removing existing diamonds from the market to keep prices artificially high.

I've read some interesting articles about the synthetics diamond industry and how it has very deliberately kept away from the retail market. I wonder why? The average Joe and fiance would be very happy to purchase a "manufactured" diamond for half the price of the "real" thing if it looks, acts and quacks like a "real" diamond, which for all intents and purposes, it is.

Mon, 03/08/2010 - 19:32 | Link to Comment seventree
seventree's picture

The Industry is working on Joe and Jane also, particularly Jane, with ad campaigns: "Was your special diamond forged over millenia in the fires of the earth? Or did that cheapskate Joe settle for a perfectly identical one made in a factory?" I don't know how successful this has been, but diamonds, especially engagement diamonds, have a more emotional valuation component than even other gemstones. Which to me is one more good reason to avoid them as investments.

Tue, 03/09/2010 - 00:11 | Link to Comment Gromit
Gromit's picture

Can you say "Blood Diamond"?

Tue, 03/09/2010 - 09:54 | Link to Comment chumbawamba
chumbawamba's picture

The diamond industry is run primarily by zionists.  Look at what they do to Arabs, then apply that to retail diamond buyers, of whom they have the same opinion basically?  I.E. give us your wealth and fuck you.  At least the diamond buyer gets back a pretty rock.

Anyway, fuck diamonds, it's all about GOLD BITCHES!!

I am Chumbawamba.

Mon, 03/08/2010 - 19:52 | Link to Comment carbonmutant
carbonmutant's picture

Actually the industry has developed spectroscopic devices and techniques to distinguish synthetic and natural diamonds

Mon, 03/08/2010 - 16:11 | Link to Comment Bam_Man
Bam_Man's picture

Then there is the Fed's "Lay's Potato Chip" corollary:

"Bet you can't print just one (trillion)."

Mon, 03/08/2010 - 14:55 | Link to Comment Anonymous
Mon, 03/08/2010 - 14:59 | Link to Comment Anonymous
Mon, 03/08/2010 - 15:09 | Link to Comment bugs_
bugs_'s picture

It may already be too late to get your refund.

Mon, 03/08/2010 - 15:14 | Link to Comment Anonymous
Mon, 03/08/2010 - 15:21 | Link to Comment Anonymous
Mon, 03/08/2010 - 15:26 | Link to Comment Anonymous
Mon, 03/08/2010 - 15:28 | Link to Comment Abraham Snake
Abraham Snake's picture

Georgia isn't listed in the 33 states that raised taxes because it 'raised taxes' in a sneaky way. Among other things, Georgia discontinued property tax homestead exemptions and dramatically increased traffic fines. Minor offenses increased from about $80 to about $275 (cracked auto glass) and major fines increased from about $200 to $600 (speeding over 20 mph). The middle class -WERE NOT- officially targeted. Taxes -WERE NOT- officially increased in 2009.

Tue, 03/09/2010 - 10:08 | Link to Comment chumbawamba
chumbawamba's picture

Haha.  Sounds like the revolution will start in Georgia.

I am Chumbawamba.

Mon, 03/08/2010 - 15:31 | Link to Comment carbonmutant
carbonmutant's picture

If you think the state's shortfall is bad wait till you hear the Federal numbers in April.

Our community organizer will be in front of his teleprompter talking about the need to realign expectations... again.

Mon, 03/08/2010 - 15:32 | Link to Comment sgt_doom
sgt_doom's picture

Super post, TD!

Yup, those states' actions are undoing any pitifully small thing Obama may be doing, or giving the impression of doing (as in actually shipping those stimulus funds over to China on behalf of Wall Street).

Having the opposite effect of any anti-depression activity (lowering taxes and having the super-rich monetize their own damn debt!).

Years ago, when I lived in Seattle, a local reporter, Brier Dudley, broke the story (around 2003, I believe) that the Greater Seattle Chamber of Commerce, together with its affiliated Trade Alliance, was giving seminars for local corporations and companies on the efficient and smooth laying off of their employees and shipping their jobs overseas.

The local downtown association at that time was quiet on this subject (reducing the local tax base and jobs base) and I recently read that they now realize they need jobs and businesses in the downtown area.

What a country???????

Mon, 03/08/2010 - 15:33 | Link to Comment Yophat
Yophat's picture

FYI - Link to the report doesn't work - left the "f" off of .pdf

Mon, 03/08/2010 - 15:36 | Link to Comment Anonymous
Mon, 03/08/2010 - 15:39 | Link to Comment AR15AU
AR15AU's picture

To all cigarette smokers - stop funding your despotic state with $5 or $6 / pack cigarettes.  You can buy a high quality cigarette injection machine such as the Top-o-matic and produce perfect filter cigarettes for $1 / pack.  Yes, $1 / pack.  This will not only save you money, but it will punish the greedy government for relying on such a regressive tax on the poor as cigarette tax.  Please get yours today.

 

Mon, 03/08/2010 - 15:42 | Link to Comment Shameful
Shameful's picture

Good advice but they massively jacked up taxes on tobacco for rolling your own last April.  I'm not a smoker but I warned my dad who bought garbage bags full of the stuff.  Don't know how people can afford to smoke these days, especially buying by the pack.

Mon, 03/08/2010 - 15:45 | Link to Comment AR15AU
AR15AU's picture

They can raise the tax on loose pipe tobacco by 100% and it still pales in comparrison to the tax on a pack of cigarettes.  Might make the roll-your-owns go up to $1.05 per pack or something.  8 ounces of Farmers Gold tobacco is about $8, and thats enough to make a carton.  200 paper tubes with filters are $2.

Mon, 03/08/2010 - 15:59 | Link to Comment Anonymous
Mon, 03/08/2010 - 18:52 | Link to Comment Shameful
Shameful's picture

I disagree with cigarette taxes and I'm a lifelong non smoker.  It's just the gov trying to make revenues while also taking away people's choices.  Some people think cars are bad so should we have $7 a gallon gas, which has been proposed? 

Hmmm America is full of fat people maybe we need crushing food taxes!  That should stop fatties from eating, hit them in the wallet. /sarcasm Which we are going to see with soda taxes, and some places are putting in food taxes though not for the "fatties".

Mon, 03/08/2010 - 20:50 | Link to Comment Rainman
Rainman's picture

Yup, Phoenix is moving to the food tax......other cities will follow. Auto sales were their biggest moneymakers pre-recession. Monkeying with prop taxes spanks the elderly fixed income, putting more of them on the street. They'll jiggle the multiplier soon anyway.

In Loma Linda, CA they now charge you $ 300 to call 911. If you pay $ 48 per year resident fee you can call unlimited. I suppose it's a scheme to jam the insurance companies for freeway accident calls by out of towners.

Even for those without a vice, the sneak taxes are coming with a vengeance. The smoking and alcohol taxes are old '90s schemes.  

Mon, 03/08/2010 - 15:41 | Link to Comment Anonymous
Mon, 03/08/2010 - 15:48 | Link to Comment sharonsj
sharonsj's picture

My property and school taxes are going up too (I'm in PA), but Obama has nothing to do with it.   State budgets have to be balanced and states cannot print money, so the only way is to raise taxes and/or cut services.

This problem began with Bush, when he cut taxes on the rich and assured the rest of us that we'd benefit.  I just laughed when I heard it because I understood the connection between state and federal government.  I knew that the tax cuts would eventually screw the states, and I was right.

Mon, 03/08/2010 - 16:02 | Link to Comment AR15AU
AR15AU's picture

Sorry, when Bush was in office, I was making less than $100k / yr, and I benefited greatly from the tax cuts, to the tune of about $2000 / year.  People who don't pay taxes cannot benefit from a tax cut by definition.  Get a clue on that.

Bush failed to cut government services along with the tax, so that was a big problem.  Medicare part D should have never been implemented and there should have been major cuts elsewhere.  Our government services must be reduced if the country is ever going to recover.  I for one will not invest in an environment where the government is running a centrally planned economy.

Mon, 03/08/2010 - 16:07 | Link to Comment Anonymous
Mon, 03/08/2010 - 17:11 | Link to Comment Anonymous
Mon, 03/08/2010 - 16:11 | Link to Comment hambone
hambone's picture

Don't know what you folks are worried about - check the REIT sector today and you'll know all is well.  New 18mo highs and nothing to fear...go long and strong.  Higher taxes and high unemployment...no problem.  Quit your thinking about 50 to 80% of CRE on interest only loans since '05, mostly on 5yr loans, needing to be rolled over w/ high vacancies, lower rents, and 50% of mortgages under water.  Stop thinking and just buy, buy, buy.  And then help me do the same...this thinking stuff is killing my returns.

Mon, 03/08/2010 - 17:22 | Link to Comment Anonymous
Mon, 03/08/2010 - 18:52 | Link to Comment Anonymous
Mon, 03/08/2010 - 18:54 | Link to Comment Anonymous
Mon, 03/08/2010 - 17:23 | Link to Comment Anonymous
Mon, 03/08/2010 - 17:29 | Link to Comment Happy Days
Happy Days's picture

Just a thought....maybe this whole thing is an illusion. Can you really trust a government? I don't think so. Think about it...the banking elite do this every now and then to make some more cash, gain more power and further just about everyone into slavery of some sort. It's a script they have patiently followed for hundreds of years (longer, actually). By using the main stream media that "they" own, they are able to manipulate booms and busts at their discretion. This is quite predictable. For example, the boomer generation was a classic "hit" case...the largest demographic group to hit the streets ever and, as such, excellent pickings.  Think like the banksters do and it becomes fairly obvious. All the boomers are starting to retire...they will have to sell their homes to survive...social insecurity won't cut it....This is a fact...and the upcoming generation is about 60% the size of the boomers. I don't mean to step on someone's feet here as it appears that the people here are not main stream types. I'm referring to the massive  collective... the typical stereotyped boomers which seem to lack common sense and this is a factor in the overpricing of homes (bubble). For example, I used to go to bankruptcy auctions (businesses) and I would see the "yuppies" bidding way to high for many items (paper, computer garbage, copiers, etc.) and when I say high...I could buy the same stuff at a retail outlet for less!! They seemed to lack a sense of value. How about this?...I know that one can build their own home for about $20 to $30 per square foot which is cost of materials only.  How do I know?... because I have done it. Yet, I see these same yuppies paying $275 to $700 per square foot for average homes (the $700 per square foot was for a townhouse...1200 square feet and cheaply built!!!). I'm sorry, but this is not sound thinking, while at the same time leveraging to the hilt. By the way, I am 59, so I'm in this group, but never participated with same. In any case, this group does deserve what is now happening to them...because they got caught up in the frenzy and didn't use their brains.  How many out there always believed real estate would always go up? Ha ha ha....nothing goes up forever. Common sense is uncommon here.

Getting back to the illusion...does everyone really think that the so-called losses are for real as the governments say? Be honest with yourself...we know they lie...it is a fact. Do you really think they will show you the real balance sheet? Do you really think they will tell us their real income...from various investments, etc. They only show the income from taxes in the various forms...but that is only part of the picture. The rest is on a separate "sheet" ...second set of books. Look up "CAFR" to get a feel for this...and that's only part of it!!! How about this?...a bank lends money (joke, of course). which is created out of thin air. Monopoly money is all it is. So if I print up some monopoly money and "lend" to you with interest, I make a good haul. Even if you default, I still made out. Banking is like running a business in most respects, except in banking, you don't have to pay for your supplies. They just print it up and sell it. It's like any company getting all their materials for free and reselling same. So, we have all this "talk" about defaults in mortgages, credit cards and so on. So, in perspective, let's say they have defaults in the area of 10-15%. So what? I have had businesses where sales fluctuated that much and more....was never a problem and it isn't for the banks. It's just a show, my friends. They are not in trouble...it is we whom are in trouble if we desire to believe what they say and let them get away with it. Solution: everyone stop participating in their game. It's an illusion...a show brought to you by Hollywood East. How can we fix this? Maybe don't go to work....

Mon, 03/08/2010 - 18:08 | Link to Comment hambone
hambone's picture

Uhhh, Happy Days this requires me to believe there really is a cohesive "plan" and some sort of "cabal" in cohoots and that the real ends are well hidden. 

I prefer to believe there really isn't a plan but just the appearance and perception of a plan.  My bet is the world is managed chaos which has all sorts of opportunities for those who know how to work the system.  I think all the facts we need to make this determination are right in front of our face but like one of the art pieces that require you to change your viewpoint to see the "bigger picture", folks can't see what is ahead of them because it doesn't compute w/ the world they believe in.  Anyway, I think people are pre-disposed to believe men w/ a little grey hair in expensive suits even if they tell some real whoppers (don't get me started on religion :). 

We've been raised to believe in a Ponzi scheme which in time will be unmasked like manifest destiny or endless resources.  The world is finite and ultimately, so are returns.

Mon, 03/08/2010 - 17:44 | Link to Comment Anonymous
Tue, 03/09/2010 - 02:48 | Link to Comment docj
docj's picture

The grade of this "Recovery" continues to rate a B+.

Solid. B+.

Tue, 03/09/2010 - 05:03 | Link to Comment Anonymous
Tue, 03/09/2010 - 07:00 | Link to Comment Anonymous
Tue, 03/09/2010 - 11:19 | Link to Comment Anonymous
Thu, 04/15/2010 - 10:35 | Link to Comment mark456
mark456's picture

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Fri, 02/25/2011 - 00:36 | Link to Comment george22
george22's picture

Tent City scene:

Nothing to see here, move along. These are just migrant workers in progress in the new OUSA.

Overworked
Unemployed
STASI
AMERIKA

OUSA

http://funy1.blogspot.com/2010/03/hevybaudy-ignore-all-collapsing-state....

In French Ou sa? = Where is that?
KOUSA = Arabic for kornholed meat stuffed Zucchini.

The FED Baked a liquidity bubble cake and left the oven on.
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