American Elephants

Ranking the States for their Fiscal Reliability by The Elephant's Child

Here in greater Seattle, following national publicity surrounding the Seattle debacle with raising the minimum wage, the Seattle City Council has determined that it would be a good idea to raise taxes on the rich.  They passed an ordinance.  It will be challenged in court, for the Washington state constitution says they can’t have an income tax, and their plan clearly defines who is rich and who is richer, and has to pay even more.

Several states have decided to raise taxes this year to cover budget shortfalls. A new study suggests that the states might find themselves in worse financial shape after the money starts rolling in. (Leftists do not understand the free market. That’s why they are Leftists.)

According to the latest ranking of states by the Mercatus Center at George Mason University, the most fiscally sound states in the country are all low-tax, GOP strongholds, while the 10 least-solvent states are almost all high-tax and heavily Democratic.

The rankings in the fourth-annual “Ranking of the States by Fiscal Condition” report, which was released this morning, are based on an review of audited financial statements for 2015 covering five measures that gauge the states’ ability to pay their bills, avoid budget deficits,  meet long-term spending needs and cover pension liabilities.

Cash solvency measures a state’s ability to pay immediate bills. Budget solvency focuses on whether states will end the year with a surplus or deficit. Service-level solvency gauges a state’s ability to meet a demand for increased spending. Long-run solvency concerns a states’ ability to meet longer-term spending commitments. Trust fund solvency  examines the states’ unfunded pension liabilities and state debt.

The 25 most-solvent states are solidly Republican except for four. Of the bottom least-solvent states, all but five are solidly Democratic. The most fiscally sound states also tend to have the lowest tax burdens, according to a separate analysis by the Tax Foundation.

The Mercatus Center Analysis can be found here, along with a map which includes more separation of the states into groups. The bottom line seems to be that the more money the state government takes from taxpayers, the worse they do in handling it. That should be surprising, but it’s not.

Straightforward Question. Acting Budget Director Unprepared. by The Elephant's Child

You don’t want to tackle Senator Jeff Sessions (R-AL), ranking member of the Budget Committee, if you don’t have your numbers on the tip of your tongue. It was a fairly major number that Senator Sessions asked for from Acting Budget Director Jeff Ziets. How much does this budget raise the deficit? When you get used to putting numbers in their most pleasing and engaging form, in order to confuse the people about what you are doing, you can be unprepared for plain old straight talk. Mr. Ziets was unprepared, and embarrassingly condescending.

The National Debt is rapidly approaching $17 Trillion. Could we please manage to take it seriously, Mr. Ziets?

The SuperCommittee, The Democrats, And The Consquences! by The Elephant's Child

The SuperCommittee was a dumb idea in the first place. We shouldn’t let our representatives get away with this kind of abdication of their own responsibilities. It is perhaps inevitable in the current climate. I have never seen a time when the two parties are so completely at odds.  It’s not just politics — they don’t share the same worldview, the same hopes for the country, the same understanding of economics, or the same understanding of history.  They don’t share the same facts.

And they certainly don’t share the same plans on what to do next.  Representative Barney Frank (D-MA) finds the SuperCommittee’s failure to be “good news” for the Democrats “because it will help to end the Bush-era tax cuts and give Democrats more bargaining power in budget negotiations.” The Hill reports:

Groups on the edges of both the liberal and conservative spectrums have cheered the death of the supercommittee. Liberal groups like the Progressive Change Campaign Committee were happy that programs such as Social Security and Medicare were spared, while Tea Party conservative groups applauded the breakdown in talks because no tax increases emerged from the deficit-reduction panel.

The supercommittee’s failure to reach an agreement sets in motion $1.2 trillion in automatic spending cuts set to take effect in 2013 through sequestration. Half of those cuts are to defense initiatives, which has hawks in Congress vowing to undo them. House Armed Services Committee Chairman Buck McKeon (R-Calif.) said Monday that he was readying a bill that would prevent the defense cuts.

“The people who want to say ‘no’ have more leverage,” Frank said in a telephone interview. “Every showdown until now, the right-wing had more leverage. They tended to benefit more from gridlock. Now, thanks to sequestration and the expiration of the Bush tax cuts, gridlock is bad for the right-wing. So they are now going to be forced to deal.”

Democrats, Frank said, should offer to extend the Bush tax cuts for the middle class and end them for the rich — counting that as savings against the automatic cuts. And if you don’t like that just see taxes go up on everybody and sequestration.

The Senate Democrats plan to take up legislation that could add another $400 billion to the deficit. There’s a really nasty battle shaping up.  Democrats, as usual, want what they want right now, with no regard for the consequences.

They want to continue the reduction in the “payroll tax.” That doesn’t add up to much help for ordinary people, and  you’ll notice that they suddenly call it the payroll tax as if what the government is refraining from collecting is some nasty tax on a company’s payroll. It is the Social Security tax and the Medicare tax, and, uncollected is putting Social Security and Medicare in the red even sooner than expected. We’re already there, and the Democrats don’t want anything to interfere with their pretense that they are taking care of you.  They’re not.

They want to tax “the rich.” That won’t give them much revenue at all, but it is the principle of “redistribution”that they care about — which is the pretense that they are going to give that money to the poor.  They’re not. They will spend the money on more earmarks to take home to their constituents.  Haven’t you ever noticed that the poor never become less poor after they tax the rich more? You help the poor and the unemployed by helping the private sector economy to grow and create jobs, and helping people to stand on their own two feet and try to fulfill their potentials and pursue happiness.

And one thing that definitely does not help the private sector economy to grow is more spending, and the consequences that come with that spending.

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