Wisconsin State Deficit Grows
This is not surprising in the least.
State government faces a long-term imbalance between spending commitments and tax collections of almost $1.7 billion, even if the budget-repair bill being debated in the Legislature becomes law, lawmakers were told today.
Bob Lang, director of the Legislative Fiscal Bureau, gave Senate Republicans that estimate of the so-called “structural deficit,” which is the projected shortfall Gov. Jim Doyle and legislators face next year when they must debate and pass the 2009-’11 budget.
First, however, Doyle and legislators must fix a $652 million shortfall in tax collections in the current budget, which ends in mid-2009. The Senate was scheduled to debate a budget-repair bill today; the Assembly will take up the same bill on Wednesday.
Lang said the $1.7 billion long-term deficit is almost entirely attributable to the slowing economy. Tax collections are only expected to grow by 2%, which is less than half of the average annual growth of 5.5%. Every 1% lag in tax collections means state government collects $130 million less in taxes, Lang said.
The real question is… what will our politicians do? In a slowing economy where people are losing jobs, foregoing raises, paying for higher fuel costs, paying for higher food costs, trying to keep their homes, and everything else… will our politicians move to scale back the cost of government or increase it?
Given the budget repair bill, the answer seems pathetically obvious.
Of course the real question is, when will Republicans actually start being fiscally responsible? A little tidbit omitted by the “liberal” Journal/Sentinel
According to the LFB, the governor’s plan would have left the state with a structural deficit of $1.42 billion, the Assembly plan carried a $1.65 billion structural deficit, and the Senate’s proposal had a $1.37 billion structural deficit.
Combined with the larger structural deficit that the Assembly budget from last year contained, the free spending ways of the Tommy days, and the idiodic spending ways of the one McCallum budget, when will you conservatives realize that the GOP is repeatedly taking a dump on your fiscal conservative ideals?
It’s not like this is a plague of WI Repubs, this is how Reagan operated, eventually proving Mondale to be a profit in the 1984 race when Reagan raised fed income tax shortly after his re-elect to defray some of his deficit spending. It is how Bush Jr’s been running the show for 8 years.
Y’all may not agree with Dems on the programs they want government to fund, but at least they try to pay for them.
Posted by on May 13, 2008 at 2153 hrsLefty,
1) I largely agree with you that the GOP has sucked at this too.
2) Don’t pretend that the Dems are any better. The Dem-controlled State Senate already passed the ridiculous repair bill.
Posted by Owen on May 13, 2008 at 2158 hrsThe Dems are better at paying for what they agree to spend, period.
The GOP in this state, even budget hawks like J. Fitz, Vumir and Pridemore (who are peanut gallerying the Decker/Huebsch deal) and the kings of TABOR F. Lasee and Wood, voted for the Assembly GOP budget repair bill in March. That bill left a higher structural deficit than either the Sen or Gov’s version, by a quarter billion dollars nonetheless. Same last summer on the budget as a whole, when every Assembly Repub but Wood got behind the big deficit spending plan the GOP leadership crafted, then tried to sell it as fiscally conservative.
If you want to debate the merits of state programs and argue for cuts, fine, at least it is an honest debate. But the party you and the majority of your readers keep backing, down to every member of the rank and file (no matter how many tough talking press releases Nass puts out) are the ones who are the biggest drivers of ongoing deficits. They won’t raise revenue, and they won’t make cuts. They just b and moan, crying foul, while not offering one ounce of solution.
It’s always the Dems fault though in their eyes. Hell, even congressman Sensenbrenner hammered Doyle for the Real ID raid yesterday, even though Doyle only proposed taking $5 million from that fund, while the Assembly GOP leadership were the ones that agreed to taking all $21 million. He didn’t bother to notice that it appears Doyle was cut out of this agreement, and has done everything but say he’ll veto the who thing out right in the media the last two days.
It’s tiresome. If you truely want fiscal responsibility, meaning the books should be balanced, then you cannot rationally vote for Republicans. Over the last two decades in this state and last 3 decades at the federal level, they have made mess after mess after mess, and then blamed Dems for raising taxes when no other option is left.
Posted by on May 13, 2008 at 2245 hrsWow… I haven’t laughed that hard in a while. Thanks, Lefty
Posted by Owen on May 13, 2008 at 2255 hrs
$1.7 billion long-term deficit is almost entirely attributable to the slowing economy.
How much is that I94 project going to cost?
Was it $1.9 billion?
Posted by on May 13, 2008 at 2302 hrspjr,
The transportation fund are fueled primarily by the registration fees and gas tax. They aren’t dramatically affected by a slowing economy. The general fund is hit hard because it is primarily reliant on the income tax, sales tax, and other ancillary taxes.
I know that’s in vogue lately to blend these funds together, but that’s not the intent.
Posted by Owen on May 13, 2008 at 2307 hrsLaugh if you wish Owen, but the numbers bear me out. This isn’t a discussion about spending you initiated, it is a discussion of paying the bills. The GOP has failed miserably in that respect in this state.
Posted by on May 13, 2008 at 2327 hrs"they won’t raise revenue...” How do you propose to raise revenue during a slowing economy Lefty, by raising taxes and slowing the economy further?
Posted by on May 14, 2008 at 0651 hrsThe transportation fund are fueled primarily by the registration fees and gas tax.
Owen, you are aware of the shortfall between the transportation fund’s projected revenue stream versus what we are projected to spend on highways over the next 20 years.
Where would you propose we find the money to close this gap?
What gives with this deaf ear to decreasing highway spending?
Are you just trying to raise some campaign cash from the road builders?
Posted by on May 14, 2008 at 0834 hrsWhat gives with this deaf ear to decreasing highway spending?
pjr, are you new here? I have constantly been a supporter of slashing transportation spending and reprioritizing the spending to do more maintenance and fewer new projects.
Are you just trying to raise some campaign cash from the road builders?
??? I’m not running for office. Why would I want any campaign cash?
Posted by Owen on May 14, 2008 at 0910 hrs??? I’m not running for office. Why would I want any campaign cash?
Gee wiz, I guess I must have stumbled onto the wrong blog. I thought you were the Owen Robinson who was a frequent speaker at GOP and conservative fund raising events.
I have constantly been a supporter of slashing transportation spending and reprioritizing the spending to do more maintenance and fewer new projects.
Really!
http://www.bootsandsabers.com/index.php/weblog/permalin k/decision_coming_on_i94_expansion/
That certainly was a riveting call for fiscal prudence.
Exactly which new planned projects are you opposed to?
Posted by on May 14, 2008 at 0925 hrs...frequent speaker at GOP and conservative fund raising events.
I have spoken at a few events. It’s hardly frequent. And I’ve never spoken for the purpose of raising campaign cash or at a fundraiser. So no, I don’t care about campaign cash. Never have.
Yes, I support the I94 project. That does not translate into wholesale support of the way we manage transportation in Wisconsin. If you go back through my archives, you will ind consistent support of cutting transportation spending.
I know that you really want to rip me here, but you’re ripping me for a position that I don’t hold.
Posted by Owen on May 14, 2008 at 0940 hrsAnd I’ve never spoken for the purpose of raising campaign cash or at a fundraiser.
Tomayto, tomahto.
Owen, I94 is the most expensive individual project on the plate yet you have not questioned 1 cent of the projected cost.
Since when did you become so trusting of the governments decision making process?
If you go back through my archives, you will ind consistent support of cutting transportation spending.
That’s “a chicken in every pot” rhetoric.
How about something specific?
And know I am not trying to “rip” you, just asking for a little clarity and candor.
Posted by on May 14, 2008 at 1030 hrsI oppose the KRM and other derivations. I oppose taking out the left turns on the “loop” in Fond du Lac. I opposed them rerouting Hwy 33 west of Allenton when they had just lowered the road for bridge clearance the year before. I oppose widening 33 between West Bend and I43. I oppose the policy of construction crews needing to reflect the racial makeup of the area in which the project is to be done. I oppose the overuse of asphalt in lieu of more durable concrete (yes, I know it costs more up front but the TCO is less). I oppose all waysides. Etc.
And I support the I94 project. I’m sure that it could be done less expensively, but I haven’t seen a breakout of how the money will be spent, have you? I’d love to do the I94 project for $1.5 billion or even $1.2 billion.
Still, YOU made the blanket statement, “What gives with this deaf ear to decreasing highway spending?” How about being a bit more specific yourself, eh? Because I have been vocal about cutting transportation spending in Wisconsin.
Posted by Owen on May 14, 2008 at 1108 hrsI had to laugh at Lefty’s comments as well in #3.
It seems that tax and spend are the only two words in his budget vocabulary.
Posted by on May 14, 2008 at 1200 hrsLaugh all you want Republican supporters, lefty is right in what he says. Google national debt. It rises sharply in Republican years and either slowly or even declines during Dem years. He was even accurate when he did not state you should vote for a Democrat instead. Neither side has actually cut any significant spending, even pork expenditures, at the (Wisconsin)state or national level in decades. Neither side has been remotely fiscally responsible. Bush’s tax cuts have gone straight to the deficit, a cash advance on our national credit card. Think how much that will help if the economy slows as much as people fear.
Posted by on May 14, 2008 at 1225 hrsIndeed Lefty was right. Owen is there anything he said not factually correct?
Did you also not support a version of the biennial budget that made the structural deficit worse than the alternative?
Do you agree with Belling when he said yesterday, “I’d rather have a sham budget that doesn’t raise my taxes than an honest budget that does”.
That position advocates tax increases on our kids, does it not?
Posted by on May 14, 2008 at 1240 hrsGoogle inflation, Tuerqas. Then google asset inflation. How can you rationally vote for a democrat?
Posted by on May 14, 2008 at 1254 hrsYour comment that the transportation is not really impacted by the slowing economy is simply not true. The transportation fund is running a deficit right now because the econonmy is slowing and car registrations are down. It is also impacted when people drive less because they can’t afford to put more gas in the family car.
And lefty is right. The Repubs are worse on budgeting by far. They had a chance to show just how fiscally responsible they are in 2003. They controlled both chambers and actually sent the governor a bill that spent a billion more in the second year and included a larger deficit and about 650 more state employees than the dem governor had proposed.
At least when dems propose new spending, they are honest and offer ways to pay for it. Republicans just get out the credit card. Our federal budget problems are proof enough of that fact. The federal Repubs never met an earmark they couldn’t love.
Posted by on May 14, 2008 at 1255 hrsThe GOP is headed for a major beatdown in November due to their fiscal irresponsibility. Unless there is some suprise between now and November the elections could boil down to a single issue… It’s the economy stupid.
Americans are smart enough to realize “tax and spenders” are superior to “borrow and spenders”.
Posted by on May 14, 2008 at 1304 hrsHow is tax and spend superior to borrow and spend?
Posted by on May 14, 2008 at 1313 hrsBV, did you read my comment? I couldn’t rationally vote for a Democrat! Try reading and comprehension.
To answer your last query: Because then at least you aren’t paying interest too. I earn and spend as a private citizen. I pay off my credit card each month, and only owe for my house. I believe I am in significantly better shape fiscally than the people who buy all the latest toys, buy a new car while still owing on the last one, etc. because they borrow and spend. I guess you can argue that they are superior because they have more and better ‘stuff’, and on that we can just disagree. I mean, we do have 5 horses.
Posted by on May 14, 2008 at 1340 hrsDo you do your own budgeting at home BVBB? The key to responsible budgeting is to spend roughly equal, preferably less than you take in.
You seriously haven’t learned that it is a bad idea to run up debts large enough to make their repayment difficult?
Are you seriously suggesting that it is better to run up debt than it is to pay for things as you purchase them?
Posted by on May 14, 2008 at 1346 hrsI also happen to agree with the statements about it’s the economy stupid and the republicans are going to be smacked down. Unless gas prices come down significantly, the republicans are going to be lamed even though the Dems and RINOs are responsible by refusing to drill more and the ethanol mandate. The only hope the Republicans is that they have at least 41 conservatives in the Senate to fillibuster. The RINOs like McCain and others are bent on destroying the party.
Posted by on May 14, 2008 at 1420 hrsThe last decade has seen nothing but inept leadership, lousy budgeting, poor planning and nothing to grow the state’s economy. This has come from both the GOP and the dems.
Posted by on May 14, 2008 at 1445 hrs
The GOP had control of both houses for several sessions and they were worse than Doyle. When they lost they blamed the people that failed to vote for all of the special interest wants.
Quick, tell me the last idea that Scoott Fifzgerald, Dale Schulza and Kevin Gilkes have had. Any idea, even a bad one. I will take nap while waiting.
Worse, the whole culture in Madison, from all of the staff on down are geared to spending, just different things.And yet, the majority of readers on this blog will vote for Republicans or Democrats…
Posted by on May 14, 2008 at 1457 hrsThe problem, 3rd way and Tuerqas, is that in my home I don’t have the ability to steal from my neighbor. Or, at least when I steal from my neighbor, I don’t claim to be doing a good thing. Taxation is done at the expense of others. It “pays” your debts by doing things like putting other people out of work.
The key is spending, and only spending. Tax and spend is worse than borrow and spend.
Posted by on May 14, 2008 at 1458 hrsI hope you aren’t in control of your families finances BVBB. Borrow and spend is the tax and spend deffered. Everything you borrow has to be paid back with interest.
Spending has to be paid back with taxes, borrowing to spend is no different than creating a future tax increases.
Posted by on May 14, 2008 at 1505 hrsNot necessarily 3rd Way:
It is possible that the borrowed funds can be made up when the economy grows and revenues from current taxes increase again. Of course, that presupposes that whichever party is in power at the time replenishes all of the funds that were borrowed from rather than spending it on new pet projects.......
Gee, what a depressing thought, I think I will go lie down and see if my head stops throbbing from the thought....
Posted by on May 14, 2008 at 1530 hrsBV, your own words are not cohesive.
The key is spending, and only spending.
Whether the Gov’t taxed 1 trillion dollars or taxed a 1/2 trillion and borrowed a 1/2 trillion shouldn’t make a difference to the above statement if the Government spent 1 trillion dollars. The only way I can see that one is worse is when you tax 1 trillion it is gone, but there is no debt. When you borrow half of it you still have to pay back a 1/2 trillion + interest. The next year you will owe 1 full trillion, because you have not raised taxes or lowered your spending.
So I think your statement is inaccurate. The quote above is like having good with no evil. The key is spending compared to income. If you pay your bills, spending is less damaging to you and your fiscal position than if you don’t, unless you can declare bankruptcy.
Posted by on May 14, 2008 at 1536 hrsPrecisely elovrich. Of course the odds of that happening are slim.
Worse 3rd way, is that tax and spend can create the situation of the late 1990s, where tax revenues are enhanced by taxation of assets that have been inflated by a loose money supply. The situation, perceived as being good, but actually unsustainable, is then used to justify further spending. Then, when the bubble bursts we refuse to stop the spending.
Posted by on May 14, 2008 at 1541 hrsUltimately Tuerqas we have to address spending. The options are not the government spending a trillion dollars and either taxing 1/2 trillion or 1 trillion. Government spending is driven in part by the perception of what is an acceptable deficit. If we collect tax revenues of 1/2 trillion government may only be able to spend 1 trillion. If on the other hand we collect tax revenues of 1 trillion, government will spend more than 1 trillion because it can because the deficit no longer looks imposing.
Witness this very thread. People are concerned about the deficit and their perception of what government should spend changes based on nothing more than whether or not the money would have to be borrowed and not whether it actually needs to be spent.
Posted by on May 14, 2008 at 1554 hrsThat is all well and good and I agree absolutely in the sense that it is self evident. My point was simply that neither the Dems or Reps have been anything more than deficient at it, whether you pay as you go or borrow.
People are concerned about how it is spent merely by whether they are Dem or Rep. If you read my comments through, my points support what you seem to be saying. It was you ironically, who started the ‘borrow is better’ after ?misreading? my first comment.
Posted by on May 14, 2008 at 1638 hrsRead sentence one of Lefty’s comment number 3, Tuerqas. He’s pretty clear that he believes the democrats have some ground to stand on here and that’s the comment I have been referring to. I believe both parties are terrible on spending, but given the choice between taxation and borrowing I’ll take borrowing every time.
Posted by on May 14, 2008 at 1642 hrstax and spend can create the situation of the late 1990s, where tax revenues are enhanced by taxation of assets that have been inflated by a loose money supply. The situation, perceived as being good, but actually unsustainable, is then used to justify further spending
You have a skewed view of history BVBB. You are correct that the tax revenue projections were inflated by an asset bubble, but the budget shortfall wasn’t created by additional spending it was created by foolishly reducing the supply of revenue based on faulty projections.
It gets back to the whole concept of keeping spending realistic compared to income. Borrowing with hopes that your income will rise and increase your ability to pay down your debt is dangerously risky, and not something our government should do. Once upon a time this was a principle of conservative thought.
McCain is going to lose because he supports this “borrow and spend” foolishness.
Posted by on May 14, 2008 at 1659 hrsTaxation, 3rd way, only increase the borrowing. Government spending isn’t based on need, but on an acceptable level of deficit and debt.
Increasing tax rates in the hope that you will increase revenue or reduce a deficit is dangerously risky and not something our government should be doing. Once upon a time that was a principle of conservative thought
Posted by on May 14, 2008 at 1719 hrsBVBigBro your comments are absurd.
First deficit spending hides the cost of “big government” and can, in effect, lead to more big government. If “big government” costs me only 50 cents and we borrow the rest then I am going to have less a problem with it than I would if it cost me a dollar. You’re literally taking away a very good argument against big government by prefering deficits.
Second I was also under the impression that a principle of conservative thought was personal responsibility. Charging the costs of big government to future generations creates a liability they have no choice but to pay. Elovrich this is for you too: were it not for the debt we rack up now, those future increased revenues could be spent on something of the future generation’s choice or, better yet, not collected at all instead of being obligated to t-bills.
The same conservative hacks complaining (rightly) about people who get in over their heads with mortgages or credit cards but who would “prefer” deficits are engaging in hypocrisy.
Posted by on May 14, 2008 at 1952 hrsI forgot to add that this,
Taxation, 3rd way, only increase the borrowing. Government spending isn’t based on need, but on an acceptable level of deficit and debt.
Is not really correct.
Deficits are routinely larger under Republicans, suggesting that Democrats do not generally accept the same level of debt on top of a higher level of spending. Since the Eisenhower administration annual deficits have averaged 2.3 percent of GDP under Republican Presients and 1.3 percent under Democrats.
There is also no evidence that “starve the beast” works at the federal level (the only level legally allowed to run a deficit):
http://www.cato-at-liberty.org/2006/05/11/starve-the-be ast-just-does-not-work/
Of course, the simple fact remains that neither party nor their brainless minions should be trusted with any responsibility whatsoever for fiscal policy; or anything else for that matter.
Posted by on May 14, 2008 at 2005 hrsTosa,
Read carefully, I did not say I was in favor of deficit spending, only refuting 2rd Ways assertion that deficit spending was a way of avoiding a tax increase today for one tomorrow. I am for fiscal responsibility and only spending what you have. WIth exceptions for disasters, wars, or other unforeseen emergencies that cannot be deferred.
Posted by on May 14, 2008 at 2012 hrsI have not argued for deficit spending anothertosavoter, only against the notion that we can tax our way out of it, and also that during a slowing economy that such policies are doubly wrong.
Note that we are talking about state spending, for which the federal parties are not responsible.
Note that the Cato institute link you provided provides no actual evidence, and actually his assertion number 2 is merely restating the fact that lower taxes lead to a higher GDP.
Taxation is a cost to future generations even greater than borrowing. All government spending comes at a cost to future generations and should be treated as such.
Posted by on May 14, 2008 at 2029 hrsElovrich said,
only refuting 2rd Ways assertion that deficit spending was a way of avoiding a tax increase today for one tomorrow.
Which you have not done. Deficits incurred today must be paid tomorrow, hence you are taxing for expenditures in the future over which you have no choice. Had the future not had the deficit, they would have the choice of lowering their taxes.
Your point has no logical basis.
I am for fiscal responsibility and only spending what you have. WIth exceptions for disasters, wars, or other unforeseen emergencies that cannot be deferred.
And part of that fiscal responsibility means covering your expenses. If a government enacts an obligation, regardless of your opinion of its merit, it is more fiscally responsible to pay for it today than to spend additional dollars on principal plus interest simply because you don’t want to pay for it, is it not?
Posted by on May 14, 2008 at 2124 hrsBVBigBro said,
I have not argued for deficit spending anothertosavoter,
Yes you have. You’ve explicitly stated you’re for it as opposed to another alternative.
only against the notion that we can tax our way out of it,
Of course we can tax our way out of a deficit. That’s not to say it’s the best policy but it can work. Witness the 1993 tax increase and subsequent budgets - the general fund of the federal government reached surplus by FY 1998. Raising taxes when coupled with restrictions on spending increases worked like a charm.
Note that the Cato institute link you provided provides no actual evidence,
I posted the wrong link:
http://economistsview.typepad.com/economistsview/files/ niskanen_vandoren.pdf
Taxation is a cost to future generations even greater than borrowing. All government spending comes at a cost to future generations and should be treated as such.
That is absurd. A tax can be reduced or eliminated at any time by an act of law; a debt usually must be repaid over a period of years.
I get the feeling you’re incapable of objective thought on this issue.
Posted by on May 14, 2008 at 2137 hrsThe government does not and cannot create wealth. Taxes detract from wealth creation and thus clearly are a cost to future generations and unlike borrowed money they are a cost incurred immediately. All government spending is such. We may decide that the spending is worth the cost but that does not change the cost. Either through taxation or borrowing future generations bear the cost.
Please reread the above discussion of asset inflation and think about the implications to the idea that we taxed our way out of a deficit in the 1990s. Please also look at the deficit and debt including future liabilities. We created and taxed a bubble and proceeded to spend, spend, spend, and when the bubble inevitably burst we elected to not stop spending and also then have to deal with the unfunded future liabilities. The deficit today is a byproduct of a loose monetary policy begun in the early 90s.
Note also that to claim we were in a surplus in 1998 you are assuming we will not pay the future liabilities not counted in the deficit calculations that you then claim we will have to pay. Please pick one or the other.
It appears we may get lucky and avoid a recession. If that happens we will probably continue a monetary policy that favors growth over inflation control and that in turn avoids any hard discussion of government spending. That may be unfortunate in the long run.
Posted by on May 14, 2008 at 2239 hrsI’m sure that it could be done less expensively, but I haven’t seen a breakout of how the money will be spent, have you?
Owen, here is at least a sketch;
http://www.dot.wisconsin.gov/projects/d2/i94/index.htm
The best part is at the bottom;
Cost containment strategies will also be put in place to ensure the $1.9 billion projected cost is not exceeded.
I really am curious about what strategies WisDOT plans to implement to control global demand for construction materials for the better part of a decade.
If you really want to get up to speed here is the FEIS;
http://www.dot.wisconsin.gov/projects/d2/i94/eis.htm
And the best part of the entire document is;
Economic Impacts
All construction costs presented in this document have been calculated to account for inflation between 2006 and the end of the multi-year construction that WisDOT has scheduled to begin in 2009. WisDOT and FHWA assumed a 3-percent annual inflation rate.
The short-term economic impact of the Build Alternatives would be an expenditure of $1.3 billion to $1.5 billion in year-of-construction dollars. Replacing the study-area freeway system in its current configuration would cost an estimated $1.1 billion in year-of-construction dollars. This cost estimate does not include the cost of reconstructing the eleven service interchanges with I-94 in Kenosha and Racine Counties, because those projects have been evaluated separately and therefore are not evaluated in this Environmental Impact Statement.
The total cost, including the Kenosha and Racine County service interchanges, is $1.7 (6-lane) to $1.9 billion (8-lane) in year-of-construction dollars.Another words the economic impacts according to WisDOT is limited to the costs of the project with no projected economic benefits.
Nice.
And you want to spend my money on this?
BBB
Say what?The government does not and cannot create wealth........
I always enjoy a good laugh before I get some sleep.
Wake me up when you are lucid.
Posted by on May 15, 2008 at 0059 hrsAh yes pjr, I always enjoy Marx for a good laugh, and Groucho, too.
Posted by on May 15, 2008 at 0739 hrsGovernments can adopt policies that lead to the creation of wealth. If you don’t beleive that, look at ireland. Wisconsin is in the process of creating a welfare economy with thing like Badger Plus etc. Instead we should be adopintg policies that leade to mor ejobs, not more welfare policies.
Posted by on May 15, 2008 at 0901 hrs
In the long run we will bankrupt ourselves with these programs.Good point Dohnal, but I have to admit I also snickered after I read your comment. Ireland does seem to be doing most things right, and it is arguable that governments main purpose is creation of wealth.
The part that made me snicker was your swipe against universal healthcare. Is healthcare in Ireland not guaranteed to everyone and funded by the taxpayers?
We could learn a lot about how to manage an economy by looking at Ireland as a model. Take care of your citizens health care needs, invest heavily in the education of your citizens and pay for it by asking for more from those that have the most. They have two tax rates in Ireland; 20% for the lower range of income and 41% for everyone that is above middle class.
Yet their economy has grown at something like twice the rate ours has in the past decade… stupid drunk socialist bastards.
Posted by on May 15, 2008 at 0933 hrsIn Ireland the corporations total taxation is 12.5% while in Wisconsin, when you count all taxes it is 43.5%. How do you plan to build on that? If we would have passed “Heatlhy Wisconsin”, results unknown, the taxes on our businesses would have doubled as both spouses would have had to pay in instead of one and the corporations would have had to pay in for both people. You can’t build a welfare state and also get new business. Take your choice.
Posted by on May 15, 2008 at 1024 hrs
It will not bother me anymore, for the next 15 or so years of my life, but those that would like jobs to stay in Wisconsin will be poorly rewarded unless you work for the govnerment.BVBVBVB said,
[The government does not and cannot create wealth.
Actually we can, though we’re not great it and it should never be our primary goal. The money we take shockingly does not get put into a giant furnace; it is recirculated into the economy by paying our salaries, building our prisons and missiles, and making payments to welfare queens. Several industries and corporations, for instance SAIC or Northrop Grumman or Corrections Corp of America take a lot of tax money and add wealth to their employees, their suppliers and their stockholders.
Taxes detract from wealth creation and thus clearly are a cost to future generations and unlike borrowed money they are a cost incurred immediately.
You’re not an accountant are you. Borrowed money immediately forms a long-term liability on the balance sheet of the government.
You’re also stretching with your point. There is no guarantee that anyone would use an extra $1,000 they may not have to pay in taxes to create wealth. It may very well be invested and lost, blown on consumer goods that would have the same effect on the economy as a government purchase, or spent on hookers and blow.
Please reread the above discussion of asset inflation and think about the implications to the idea that we taxed our way out of a deficit in the 1990s....
You’re wondering off into economic policy as if it has a causal relationship. Regardless of the economic policy you choose, from a strictly fiscal (ledger) perspective raising revenue and holding the line on expenses is a sound way to cover the government’s expenses.
You also have not addressed the moral implications of borrowing from future generations for fiscal policy. You object to the way current taxes steal from the wealth of the future but seem to have less of a problem with the way deficits do the same thing.
Note also that to claim we were in a surplus in 1998 you are assuming we will not pay the future liabilities not counted in the deficit calculations that you then claim we will have to pay. Please pick one or the other.
You don’t make sense here. The surplus in 1998 was the fiscal statement for that year.
Posted by on May 16, 2008 at 2027 hrsShockingly, AnotherTosaVoter, money extracted from the economy by the government is money that would have been spent elsewhere. Note that military spending and prisons, etc. while necessary, does not create wealth for a society. Wealth not created today is wealth not transferred to the future.
You don’t get the implications of asset inflation. We taxed artificially inflated assets and did not check spending, but based spending on the projected revenue from the asset inflation which could not continue. When the inflated assets burst, who’s left holding the bag? Future generations. Creating asset inflation was a clever way to tax the future. What’s the moral implication of that?
The causual nature of fiscal policy in asset inflation is well documented. One need only read Greenspan’s whiny, self serving statements to realize it.
“from a strictly fiscal perspective raising revenu...” Here you make the assumption that you can raise revenue. The current problem is caused, supposedly, by a slowing economy. If that is in fact the case attempts to raise revenue are likely to fail and instead will excacerbate the economic conditions that leadi to the current revenue shortfall.
Note that the federal government does not count deficits like a corporation according to generally acceoted accounting practices. Liabilities are not counted when they accrue but when they are paid out. Thus in the 1990’s to claim surplus you must ignore future liabilities. The logic behind this is that we can change the law and not pay the future liabilites, but that’s really no different than saying we won’t pay future debt, which you apparently object to.
Deficits are preferrable to taxation because deficits retain the possibility for continued economic growth that exceeds the deficit. Taxation leaves no such possibility. The preferrable option is to stop spending.
Posted by on May 17, 2008 at 0932 hrsYour opinion on this issue is absurd.
The simple fact is, if you deficit spend you create a liability that must be paid in the future (you could change the law to say you will not pay it, but that would have quite dire consequences). If you tax today for what you want to spend you may indeed take money from people who may turn it into wealth, but in the next year you can cut spending and eliminate the tax required to provide the matching revenue; meaning you don’t have debt service payments in the future that must be made regardless of whether you cut other spending or raise taxes.
I can’t replicate a crayon on construction paper here so this is as easy as I can get: if you raise taxes in year 1 to match spending in year 1, you can then reduce spending and also reduce taxing in year 2 and there is no future liability. If you deficit spend in year 1, you’re going to have debt service payments you MUST tax for in years 2 and on during the life of the bonds. Those debt service payments require taxes in years 2 and beyond you need not have, meaning you had a chance to reduce taxes so people can build wealth but instead you’ve got debt service payments.
Now of course for the reasons our boy Hamilton explained a little deficit spending here and there is ok. But thanks to members of both parties, especially the GOP since about 1981, it’s approaching 80 percent of GDP.
Posted by on May 17, 2008 at 2203 hrsThe simple fact is if you tax the economy today you reduce its’ assets and wealth creating ability in the future. Your desire not to count it is irrelevant.
If you raise taxes in year one you have permanently lowered your ability to create wealth. You are no more or less able to cut spending in year two as year one. You will not lower taxes in year two because mysteriously you will find your tax increase has slowed the economy, as Wisconsin has found out now. That slowed economy creates a lower basis for the economic standing of future generations and it will be a greater burden on future generations than interest payments.
You have to use the caveat of lowering spending because spending, of course, is what matters.
Posted by on May 18, 2008 at 1634 hrs
Ol' Army
