… I remember when they taught this sort of stuff in ECON 101.
What happens when people are out of work and lots of stores are closed? Income tax and sales tax revenue drops. Bloomberg is reporting that New York’s tax collections have dropped by over two-thirds. Meanwhile, over on the left coast KPIX reports that Governor Hairgel is proposing pay cuts for California state workers because state revenues are down over 20 percent.
As the old Russian proverb says, “Го́лой овцы́ не стригу́т. (One doesn’t shear naked sheep.)” I suspect that we’re about to see a large portion of the bureaucracy begin to favor an expeditious reopening of the economy.
There’s beginning to be a bit of noise about the possibility of states going bankrupt, but current bankruptcy law doesn’t provide for state bankruptcies. A state could default on its debts, but its creditors only real recourse would be to stop providing goods or services to the state government.
There have been several proposals floated for Congress the enact a new chapter in the Bankruptcy Code that would allow for state bankruptcy. However, the Eleventh Amendment prohibits citizens of one state suing another state in a federal court. IANAL, but that seems to prohibit out-of-state creditors from having standing in Bankruptcy Court. Also, Article IV, Section 4 requires the United States to guarantee “a Republican Form of Government” to each of the states. Placing a state under the control of a receiver in bankruptcy would likely violate that requirement.
So it may be that states can’t go bankrupt. But perhaps a territory can because territories don’t have the protections of the Eleventh Amendment and Article IV. Maybe Congress could enact legislation to allow for territorial bankruptcies and to allow insolvent states to revert to territorial status to go through bankruptcy. Of course, a state using the process would become a territory and lose its Senators and all of its Representative, but it should be allowed a non-voting delegate in the House, and after it had put its affairs back in order, it could apply for readmission to the Union.
Given that the states with the greatest insolvency problems are blue states, … oh, never mind.
One of the pieces of lard that the Democrats have gummed up the passage of a pandemic relief bill with is $10,000 in debt relief for student loans. People have been asking what relationship exists between student loan debt and the Wuhan virus panic.
I think I see their angle. They’re trying to optimize the amount of debt to be forgiven.
You see, while student loans are not dischargeable in bankruptcy, they don’t usually survive the death of the debtor. Thus, dying results in 100% debt relief.
Now, if the nation’s response to the pandemic can be delayed enough to increase the number of excess deaths, it’s possible that the total amount of student debt relief could exceed a mere $10k per debtor.
At least, that theory makes as much sense as anything the Democrats have said in public.
I make money in the stock market two ways. One way is buying stocks that pay dividends, and I hold those stocks long term as long as the dividends they pay are a good return on investment. The other way is buy stocks that I expect will appreciate in market value. I sell those stocks when I feel I can make a satisfactory profit. The recent coronavirus and Bernie scares that caused share prices to drop unreasonably was an opportunity to engage in that second method.
The DJIA is up over 5 % today.
The AP reports that
French union activists cut electricity to nearly 100,000 homes or offices. Eiffel Tower staff walked off the job. Even Paris opera workers joined in Tuesday’s nationwide protests across France, singing an aria of anger as workers rallied against the government’s plan to raise the retirement age to 64.
I’ve retired twice. Once, when I was 65-1/2 and my wife was going back to school. That lasted six months. Again, when she was diagnosed with cancer to help with her initial care. That lasted six months also. I’ll be 72 on New Year’s Eve, and I’m still working and intend to do so as long as I have interesting things to do.
This episode of Yours Truly, Johnny Atsign, which first ran four years ago today, describes Johnny’s first interaction with an insider code named Deep Vote.
* * * * *
ANNOUNCER: From Westminster, it’s time for—
SOUND: Landline phone rings once.
JOHNNY: Johnny Atsign.
DEEP VOTE: (Telephone Filter) Good afternoon, Mr. Atsign.
DEEP VOTE: (Telephone Filter) I have some more information for you. You’ll find an index card stuck inside your storm door when you get home this evening. Follow the directions.
SOUND: (Called Party’s POV) Line hung up. Dial tone.
MUSIC: Theme up and under.
ANNOUNCER: The Lickspittle Broadcasting System presents W. J. J. Hoge in the transcribed adventures of the man with the action-packed Twitter account, America’s fabulous free-lance Internet investigator …
JOHNNY: Yours Truly, Johnny Atsign!
MUSIC: Theme up to music out. Continue reading
The Daily Beast reports that ThinkProgress is for sale. The Progressive news site has been the launching pad for the careers of several prominent leftwing journalists, but it’s losing more money that the Center for American Progress, the leftwing think tank that owns it, can afford. The site is expects to lose $3 million this year.
ThinkProgress has never been profitable. In the past, it has made up its shortfalls with contributions from CAP and CAP donors. Several ThinkProgress alums told The Daily Beast that they believed that CAP could continue covering the deficit but had concluded that the site was too much of an editorial headache and too big a financial drain for them to rationalize doing so.
One of the things I learned even before I took Econ 101 was that if too few people want to pay for your product, it will fail in the market place. ThinkProgress has had over a decade to find a functional business model. It doesn’t have the Real World eyeballs and clicks to survive on ad revenue. It hasn’t attracted a subscriber base. It hasn’t attracted sugar daddy donors. And now, it seems to have become more trouble that it’s worth as a propaganda arm for its related think tank.
I suspect that someone will buy it cheap (Remember when Newsweek sold for a dollar?), and it will struggle along as a vanity project á là The New Republic for a while.
All we have to do is adopt the magic of so-called New Monetary Theory which states that a government that borrows in its own currency doesn’t need to worry about debt because it can print money to pay the debt. If the Green Nude Eel is only going to cost around 90 trillion bucks and we use one of these, we should have change coming.
Of course, that’s not how money works. Things didn’t work out well for Rome when it debased its money, and over the last century, we’ve seen what happened in the Weimar Republic and Zimbabwe and, currently, Venezuela. As John Hinderacker points out in a post at PowerLine, Modern Monetary Theory is universally regarded by economists as a crackpot idea.
So it’s unanimous: Modern Monetary Theory, the Democratic Party’s latest ticket to the promised land, is a fraud. And not a modern one, either.
Speaking of socialism…I heard an observation yesterday, in the context of Venezuela, that was striking and true. If I could remember who said it, I would credit him. Here it is:
You can vote your way into socialism, but you have to shoot your way out.
Another reason why we need the Second Amendment.
As Ben Franklin said when asked what kind of government was being formed at the Constitutional Convention, “A republic if you can keep it.”
The Foundation for Economic Education has a post up explaining how the rich could pay for that list of Progressive freebies: $47 billion on free college tuition; $1 trillion for new infrastructure; $1.4 trillion to write off student loan debt; at least $7 trillion on a Green New Deal; $32 trillion on “Medicare for All.” We can simply adopt tax schemes similar to those used in countries such as France, Denmark, Sweden, and Finland.
If Rep. Ocasio-Cortez and Sen. Warren want the federal government to collect European shares of national income, they will have to adopt European tax systems. That means higher income taxes on the middle class, higher payroll taxes, and higher consumption taxes. According to the Congressional Budget Office, raising $32 trillion in tax revenue would require adding 36 percentage points to the marginal tax rate of every federal income taxpayer in the United States. Not just the rich—everyone. The single woman earning $82,500 and the couple earning $165,000 would see their rates soar from 24 percent to 60 percent.
To borrow from P. J. O’Rourke, the good news is that the rich will pay for everything. The bad news is that you’re rich.
Finland collects about 43 percent of GDP in taxes, and that isn’t enough. Fuzzy Slippers reports at Legal Insurrection that Finland’s government has collapsed because of the cost of universal health care: #Bernie2020 hardest hit.
Finland has long been touted by American socialists as the socialist Nirvana, where everything is free and everyone is happy, happy, happy. Sadly, fiscal reality hit Finland’s government as it collapsed Friday due to the rising costs of its universal health care.
The warning signs were on the wall last spring when Finland … ended its experiment with “universal basic income.”
Bernie Sanders (I-VT), who has been hanging his socialist mantle on the “success” of Finland’s socialist structure, may be the hardest hit.
There ain’t no such thing as a free lunch.
I’m sure Paul Krugman thinks he made a morally justifiable argument in his recent NYT article supporting ¡Ocasio! She Guevara’s proposed higher tax rates, but he’s dead wrong on both the facts and his math. He wrote,
The controversy of the moment involves AOC’s advocacy of a tax rate of 70-80 percent on very high incomes, which is obviously crazy, right? I mean, who thinks that makes sense? … And it’s a policy nobody has ever implemented, aside from … the United States, for 35 years after World War II — including the most successful period of economic growth in our history.
It’s a fact that World War II ended in 1945. You can look it up.
It’s also a fact that the top U. S. personal income tax rates were cut from 70 percent to 50 percent in 1964. Paul Krugman could have looked that up in the NYT’s archives.
1964 – 1945 = 19 and 19 < 35.
Also, the peak period of post WWII economic growth in America was after that tax cut, a fact that Krugman would have also found if he researched his paper's own archives.
Space prohibits a full discussion of the impact of the tax cut, but current data show that inflation-adjusted G.D.P. increased 5.8 percent in 1964 after a 4.4 percent rise in 1963. Growth improved to 6.5 percent in 1965 and 6.6 percent in 1966. These were the three best back-to-back years for economic growth in the postwar era, and economists generally credit the Kennedy-Johnson tax cut for much of it.
Sometimes Truth just refuses to fit The Narrative.
UPDATE—To be fair to Paul Krugman, the Kennedy/Johnson tax cut became law just before his 11th birthday, so he probably has no real memory of the economic conditions he was writing about.
Andrew Ross Sorkin has an article over at NYT reporting that some people who have used firearms in mass shooting bought their guns using credit cards.
Well, duh. Most firearms cost at least several hundred dollars, and most purchases for items that expensive are paid for using either credit or debit cards. Fifty years ago, such purchases would have likely been paid for with checks. Either method is more secure than cash, but whether an electronic or a paper transaction, the funds would have been routed through the buyer’s and seller’s banks.
Sorkin seems to think that banks should be monitoring transactions related to firearms in order to … well, someone has to do something to keep those people in flyover country from buying guns. And if the government won’t because of that pesky Second Amendment, the banks should step forward.
<sarc>Maybe Sorkin is right. It could be that we have a problem with high-capacity credit cards falling into the wrong hands. The Progressive states limit access to normal-capacity firearm magazines to specially-approved individuals. Perhaps most people should be prohibited from possessing high-capacity credit cards and only be allowed debit cards with a ten-dollar daily limit. Anyone with a legitimate need to spend a larger sum can plan ahead and withdraw cash from his bank account in a face-to-face transaction that can be subjected to a proper background check.</sarc>
This is the opening paragraph on the ABOUT page of the protectourelections dot org website.The claim in the last sentence does not appear to be true.
The IRS publishes a list of all registered 501(c)(3) organizations. Protect Our Elections is not on the current list (updated on 8 October, 2018) under its current name, its previous name (Velvet Revolution US), or its Employer Identification Number.
Further, it appears from the information posted on the IRS website that it is not possible for a 501(c)(3) organization to be simultaneously registered as any other type of Section 501 entity.
Protect Our Elections/EMPR Inc. does appear to be registered with the IRS as a 501(c)(4) organization. For now. Kimberlin’s other not-for-profit, Justice Through Music Project, is registered under 501(c)(3). However, they are two separate entities, and commingling their assets could … never mind … I’ll let him find out the hard way.
At the end of 2016, the unaffordable Affordable Care Act requires that the state-run Obamacare exchanges operate without any federals subsidy. The Hill reports that states are now trying to find ways to keep the schemes solvent.
A number of states are quietly considering merging their healthcare exchanges under ObamaCare amid big questions about their cost and viability.
Many of the 13 state-run ObamaCare exchanges are worried about how they’ll survive once federal dollars supporting them run dry next year.
Read the whole thing.
Socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite a characteristic of them.
A worked example is discussed here.
Henry Meyer and Ilya Arkhipov have post over at Bloomberg dealing with the mutual collapse of the ruble and possible slide of Putin’s internal credibility.
The meltdown of the ruble, which has plunged 18 percent against the dollar in the last two days alone, is endangering the mantra of stability around which Putin has based his rule. While his approval rating is near an all-time high on the back of his stance over Ukraine, the currency crisis risks eroding it and undermining his authority, Moscow-based analysts said.
This strikes me as very dangerous.
Read the whole thing.
He who refuses to do arithmetic is doomed to talk nonsense.
… just wait till it’s for free.
Forbes report that Obamacare has raised the cost of individual market premiums an average of 49%.
This podcast from the Cato Institute deals with how “non-profit” schools benefit the folks who run them rather than students or the public. Schools aren’t the only non-profit businesses that function as a gravy trains for a few insiders.