Where is the US economy headed?

California wasn't mentioned in that report.

And did I miss that Arnold became a Democrat?

It doesn't have to be in that report, Walter.

http://ibnlive.in.com/videos/75086/california-in-cash-crunch-schwarzenegger-seeks-bailout.html

And by the way, Arnold is not exactly a conservative Republican, he might as well change his party affiliation the way he governs lately. Besides, California legislature has been run by Democrats for quite a long time now I think. It certainly has not been conservative policies that has run the state into the ground.

okie :

a/t an article by AP there are now at least 40 U.S. states that are running a deficit .

http://www.theglobeandmail.com/servlet/story/LAC.20090103.RINFRASTRUCTURE03/TPStory/?query=hurting+states+eager+for+bailout+funds

from the article :


i wonder if all of those 40 states have democrats at the helm ?
perhaps you can enlighten us a bit .
thanks !
hbg

That would take more research than I feel like doing right now, and then you also need to know which party controls the legislatures in those states, but one thing seems certain, it isn't conservative policies that produce deficits. And Republican and Conservative are not synonomous. I do agree with the governor of South Carolina, government spending or public works will not cure a sick economy, it only recycles what is sick. What we need is to fix the things that will make our industries competitive with the rest of the world. We need a spring of fresh water to replenish the lake of wealth. Simply dipping into the lake with a bucket and repouring the same old stale water out around the shore will not replenish the lake, and the bucket analogy is akin to government spending. We need to reform our tax system big time, improve education by drastic reforms (government schools are broken), break the unions, fix health care and how it is paid for, and lots of other things, before we can once again get that spring to feed some fresh water at the rate that will make the lake healthy again.

The Rep fierce opposition to taxes is what caused the deficits. It began with Reagan's supply side, which caused the deficits to soar. (Reagan said that it would bring in so much revenue that the national debt would be eliminated. The opposite happened. Also, with Bush, there was starve the beast, which also failed. The Reps taught (falsely) the public that we could have it all without paying for it.

Tomorrow will be fine,

rjb wrote :



you usually don't hit below the belt <GRIN>
hbg

I prefer the laundry analogy. At some point we're just taking in each others laundry. You pay me; I pay you, and we both have a good income. In an economy as large as ours, it can seem to work for a long time.

Where is the economy headed? Well it will go up and then down, and then up and then down, and then up and then down, and then up and then down. Oh, by the way, did you give a date?

Where is the economy headed? Well it will go up and then down, and then up and then down, and then up and then down, and then up and then down. Oh, by the way, did you give a date?

Therein lies the disagreement. I say its too much spending, not insufficient taxing. Most of the time when households get into financial trouble, the trouble is too much spending in proportion to income. Spending must be tailored to income, not the other way around. It is a bit like a tug of war, and which side needs to give in, the taxers or the spending cutters. Reagan presided over a huge rise in tax revenues, but unfortunately the spending spiraled out of control as well.

Fine; let's cut defense spending by 1/3rd. Surely you can agree that we can't afford to keep throwing our money away on it.

Cycloptichorn

Cyclo, you have it right. We are now spending an amount for defense equal to what is spent by the next 26 largest countries COMBINED. There is unbelievable waste in our defense spending.

However, it would be near impossible to cut enough to balance the budget. Taxes should not be the dirty word given it by the Reps.

Further, we need to have pay-as-you-go, such as what we had under Clinton. This, however, may be problematic until we get out of the present mess.

The policies of the Reagan administration, and the Rep administrations that followed, provided fantastic rewards for the super rich. Those below them had static or reduced incomes. This trend may have ended.

A Final Report Card on the Reagan Years?

By Sam Pizzigati

January 5th, 2009 - 8:59am ET


--------------------------------------------------------------------------------



Our current economic meltdown may finally have ended the era that began when Ronald Reagan became President. Now a new study " from the Congressional Budget Office " helps us understand the inequality that has us melting.

Two days before Christmas, with hardly anyone at all paying much attention, the nonpartisan Congressional Budget Office delivered up a final report card on the Reagan era. The highest grades? They went, almost exclusively, to the super rich.

You won't, to be sure, find any As, Bs, and Fs in this new Congressional Budget Office report card. And the CBO's researchers certainly didn't set out to grade America on the years since Ronald Reagan became President a generation ago. But they've done just that. On taxes and income distribution, their new report makes vividly clear, the United States desperately "needs improvement."

That may or may not be the message Senate Finance Committee chair Max Baucus from Montana had in mind, last year, when he asked the Congressional Budget Office to dig a little deeper into the data on taxes and income than the CBO had dug in a report released late in 2007.

The CBO's December 2007 study, Historical Effective Tax Rates, 1979 to 2005, had looked at the federal taxes Americans at different income levels have been paying since the year before Ronald Reagan's election. But the report had a hole. Nothing in it indicated how the really rich have fared in the near three decades that the basic principles of Reaganomics " tax rate cuts, deregulation, and privatization " have set the public policy pace.

Senate Finance Committee chair Baucus asked the CBO to fill that hole " by focusing on the richest of the rich. The CBO's new report meets that request, with dramatic results.

Americans in the overall top 1 percent, the 2007 CBO data showed, did quite well in the Reagan era's first quarter-century. Their average incomes, after taking inflation into account, essentially tripled, rising 201 percent.

But these top 1 percent stats, the new CBO data help us understand, hardly tell the full story. The truly stunning income increases over recent decades have gone to the tippy-top of the U.S. income distribution, not the top 1 percent, but the top tenth " and top hundredth " of that top 1 percent.

The higher up you go on the income ladder, in other words, the sweeter the Reagan era.

Between 1979 and 2005, the bottom half of the top 1 percent saw their average incomes only double, after inflation. These incomes increased 105 percent. The next highest four-tenths of the top 1 percent somewhat raised the income bar. Their average incomes, after inflation, rose 161 percent.

That brings us to the top 0.1 percent of Americans. Their incomes, from 1979 to 2005, rose a staggering 294 percent after taking inflation into account. Not bad at all. But the top 0.01 percent did even better. The 11,000 households in this rarified air took home an average $35.5 million in 2005, a 384 percent increase over average top 0.01 percent incomes in 1979.

Need some perspective here? Let's compare Americans at the top to Americans in the middle. Between 1979 and 2005, the average income of America’s statistical middle class " the 20 percent of Americans in the exact middle of the U.S. income distribution " rose, according to the CBO figures, a mere 15 percent. That's less than 1 percent a year.

But many average Americans never actually saw that less than 1 percent. That's because the CBO takes a kitchen-sink approach to defining income. CBO researchers include in their “comprehensive income” calculations all the standard household revenue streams " wages, dividends, interest, and the like " and lots more, too, from food stamps and Social Security to employer-paid health benefits.

All these add-ins tend to inflate average household “incomes.” If your employer’s health insurance company jacks up prices, for instance, the extra dollars in premiums that your employer has to pay count as income to you, at least in the CBO calculations.

The CBO actually has a good reason to take this "kitchen-sink" approach to defining income. Conservative cheerleaders for the Reagan era have been arguing for years that the United States isn't growing that much more unequal, not when you calculate in the various benefits that poor and average Americans get from government and their employers.

But the CBO figures, by adding in all those benefits, neatly expose the flim-flam behind this cheerleading. The United States definitely has become substantially more unequal. Overall, after taxes, the very rich " the top 0.01 percent " have nearly quadrupled their share of the nation's income since 1979.

These super-rich Americans in the top 0.01 percent, even more amazingly, now pay a lower share of their incomes in federal tax than the merely rich.

The overall top 1 percent paid federal income tax at an average 19.4 percent rate in 2005. The top 0.01 percent paid at just a 17 percent rate, mainly because the richest of the rich get nearly half their income from capital gains " and capital gains enjoy preferential tax treatment.

Under George W. Bush, the tax rate on capital gains income " income from the sale of stocks, bonds, and other assets " dropped to 15 percent, less than half the current top 35 percent tax rate on “ordinary” income from paychecks.

And that brings us to about the only hopeful news we can take, of late, from the Congressional Budget Office. No one on Capitol Hill has spoken out more clearly on the noxious consequences of preferential treatment for capital gains income than Peter Orszag, the CBO director until last month.

Taxing capital gains at a lower rate than other forms of income, as Orszag has testified to Congress, “creates opportunities for tax avoidance and complicates the tax system.”

As CBO director, Orszag couldn’t do much about capital gains tax breaks for mega millionaires. Now he can. President-Elect Barack Obama last month named Orszag his choice to direct the Office of Management and Budget, the federal government’s most powerful fiscal agency.

Sam Pizzigati edits Too Much, the online weekly on excess and inequality.

ourfuture.org

Good evening. Okie, a page or two back, made a comment about state deficits, whether those states had Repub or Dem governors and legislatures. I cant even begin to paraphrase his argument.
But I did do some research today and found a bunch of stuff from the "Center on Budget and Policy Priorities." It looks clean with regard to bias.
The numbers are a bit muddy because states are on a fiscal year that does not correspond to a calandar year. Some numbers are for 2008, others for 2009 and some are projections for 2010-11.
Having said that, it looks like 44 states and D.C. are in a deficit mode. It could be 38 or 40 but 44 is the number I am going with after reading the narrative. $350 billion in total over the next fiscal year or two.

Some states (I am tempted to say many states, but I can't prove it) like my state of Virginia require a balanced budget. It matters not a bit about Dems or Repubs. They have to either raise taxes or cut spending. Or both. By a lot.

or get a bailout from the feds, which is what they are hoping for....

touche

Interesting. And perhaps the following article you would find interesting, indicating jobs are going more toward red states, and those states are probably in better financial shape.

http://www.nypost.com/seven/09212008/postopinion/opedcolumnists/red_state_vs__blue_state_economics_130036.htm

" In Texas, Florida and Arizona, life doesn't seem so grim. As Phil Gramm and Mike Solon noted in a Sept. 13 Wall Street Journal column, those three large states gained 1.7 million, 1.4 million, and 600,000 jobs, respectively, from 1996-2006. That's one-third of all US jobs during that period. The states also had per-capita income growth that far outpaced the national averages.

Most other red states have done either fairly well or very well. Friday morning's Labor Department report shows at least 15 states that went for Bush in 2004 had seasonally adjusted August unemployment rates below 5%: Alabama, Arkansas, Idaho, Iowa, Kansas, Louisiana, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, Utah, Virginia, West Virginia, and Wyoming.

But if you're looking for economic struggles, visit the blue states.

Begin with big kahuna California, which gave John Kerry a 10% margin in 2004. The now-misnamed Golden State, with its Democrat-dominated legislature and might-as-well-be-a-Democrat governor, had an August unemployment rate of 7.7%, up from just 5.5%, and over 400,000 more unemployed workers, in 12 months. Yet Arnold Schwarzenegger rejects the idea of offshore drilling, and the jobs it will create.

Then head east to Michigan (unemployment: 8.9%; 12-month job loss: 70,000). Things have gone from bad to very bad during the tenure of Democratic Gov. Jennifer Granholm, with the help of a too-compliant GOP legislature. Wolverine State defenders point to its "unique" auto industry problems. Baloney - Gramm and Solon noted that while Michigan lost 83,000 auto-sector jobs in the past 15 years, eight Southeastern states, all of which went for Bush in 2004, gained 91,000."

And this site shows deficits by state per capita, led by California, New Jersey, Nevada, Rhode Island, Arizona, Delaware, and New York. I limited it to the seven states, as the next state down, Florida, was quite a bit less in terms of deficit per capita. Another site shows of these seven states leading the pack, 3 have the Democrats control both sides of the legislatures, 3 are split, and 1 is total Republican. Governors, 4 Democrats and 3 Republicans, and if you count the CA governor as Democrat, he acts like one, that one at least, I am not familiar with the other ones, thats 5 to 2 Democrat. Of course, this does not show what they might have been in the past, leading up to the situation, this would take more research, but the information so far found tends to show the Democrats policies are probably more prone to financial trouble.

http://symbionews.com/thetakeaway/state-deficits-2009.html

http://www.ncsl.org/statevote/statevotemaps2008.htm

http://en.wikipedia.org/wiki/List_of_current_United_States_Governors

Those were the States in Bush's back pocket, which is why they've done so well! Formerly old Democrat States before 1964. Now that Bush has made a monumental mess of everything, I hear Repugs speak of bi-partisanship; something they never thought of in 8 years! Happy 2009, everyone!

Republicans have made a great mess of things in their pillage of the country. The result has been great windfalls for Bush's sponsors and great expenses for the American majority. This has resulted in extensive losses of power and legitimacy for the repubs. Consequently the democrats have gained in power and legitimacy, not because of their great deeds but because of republicans' anti-patriotic exploitations. As far as I'm concerned, to hell with "bipartisanship" (the repub's favorite term at present). Democrats should take advantage of the power republicans have literally given them. To "share" power with them is to deny their mandate from the voters.