May 25, 2012
Dispatches XXIII: Wisconsin Government Diverts Funds from Foreclosure Relief
Unsurprising to me, but still of note.
From ProPublica, insight into Wisconsin (among other states):
States have diverted $974 million from this year’s landmark mortgage settlement to pay down budget deficits or fund programs unrelated to the foreclosure crisis, according to a ProPublica analysis. That’s nearly forty percent of the $2.5 billion in penalties paid to the states under the agreement.
What stands out is that even states slammed by the foreclosure crisis are diverting much or all of their money to the general fund. In California, among the hardest hit states, the governor has proposed using all the money to plug his state’s huge budget gap. And Arizona, also among the worst hit, has diverted about half of its funds to general use. Four other states where a high rate of homeowners faced foreclosure during the crisis are spending little if any of their settlement funds on homeowner services: Georgia, South Carolina, Wisconsin, and Maine.
Wisconsin Governor Scott Walker announced soon after the settlement was finalized that the bulk of it—roughly $26 million—would go into the state general fund. Two million went to an economic development fund, including funds for demolition in blighted neighborhoods. Many state Democrats and housing advocates opposed the plan, but failed to block it.
Posted by Menzie Chinn at May 25, 2012 04:08 PMdigg this | reddit
Instead of presenting an insinuation of mismanagement on the part of the Governor, would you please suggest a fair and appropriate way to use that $26 million with more economic specifics. After all, the settlement was based upon past foreclosures which can no longer be helped. Should that money be spent on those now currently in forclosure, or upon those for whom foreclosure is approaching? How would you determine which families get a break? How much would they get? SHould those with a $1 million mortgage be helped more or less than those with a $10,000 mortgage? How many families would you expect to be helped by your plan? How would you do it in a way that does not create a moral hazard to encourage forclosures to get some of this $$? At least if it's in the general fund, then everyone in the state can benefit a little.
As you mentioned in an earlier post,
"I believe it would be more useful if you highlighted something ... numerically"
Posted by: J at May 25, 2012 07:58 PM
J: I see. So there are no numerical errors in all the posts I have written on Wisconsin. Thank you for confirming that fact.
My personal view is that it would been better to forgo the tax breaks for corporations implemented by the Walker administration, or devote these funds to rescinding the cuts to Badgercare (health care for low income residents of Wisconsin). But I do understand the "are there no poorhouses?" view of the world, so understand why you might not like these alternatives.
Posted by: Menzie Chinn at May 25, 2012 08:19 PM
Menzie said: "My personal view is that it would been better to ..." ( list of PERSONALLY preferred options follow) with a challenge why they are not likable. This was in response to a "would you please suggest a fair and appropriate way to use that $26 million with more economic specifics."
Notice the failure to provide the fair and appropriate description? Notice the failure to address the "JOBS SAVED" argument we hear constantly? Notice the failure to discuss the "budget deficit reduction" argument we understand Walker was elected?
The smoke is getting denser as it appears Walker will win.
Menzie, out of curiosity, what is your argument against Walker?
Posted by: CoRev at May 26, 2012 04:33 AM
Thank you for 2 suggestions. But now I'm a little confused. Corporation tax breaks are designed to encorage business to move to the state. Yet, you are against that idea while simultaneously taking after Walker for not creating enough jobs in the state(1). What do propose that Walker does to create jobs if he cannot use tax breaks as an incentive?
Apparently, tax breaks for corporations have been used before. After all, Milwaukee Mayor Tom Barrett must be disappointed to see that Milwuakee lost another 4400 jobs in March (2).
He is apparently so desperate to try and create any jobs that he pulled the 'ol tax-breaks-for-corporations and offered Kohl company > $170 million to move their headquarters about 10 miles down the road from it's current place in Menomonee Falls to inside the Milwaukee city limits(3). He must be desperate to divert so much of Milwuakee's tax resources to a transparent move in a bid to claim that he is "creating" jobs in Milwaukee. And, as a sign of the negative business climate that he has created in Milwaukee over his 8 year reign, the Kohl company said NO! (4)
Factual, uemotional analysis would suggest that you would compare Walker and his opponent Barrett and their strategies and records for job creation. However, I will not anticipate seeing any balanced post from you regarding Walker because of your status as a state employee of the university system. Of course, in journals, you would have to disclose that conflict of interest in every article you submit. On blogs, that can be conveniently omitted.
Posted by: J at May 26, 2012 06:15 AM
Didn't Jerry Brown just do this in California?
Posted by: Steven Kopits at May 26, 2012 06:32 AM
Let me follow up on my 'so what else is new' comments:
- In Wisconsin, I would be interested in counter-factuals or analysis. For example, what aspect of Walker's policies, in your opinion, caused the poor numbers (other than increased state spending on teachers, etc.). Do you think Wisconsin is under-rewarded for a 20 position jump in competitiveness? Do you believe unions make a state more competititive? Why?
- Contractionary expansion. If G is part of GDP, the reducing G reduces GDP. I see no reason to believe that the S, I, or C components would increase at the same time. So why the repeated posts on this topic? Why not a post on the strengths and weaknesses of traditional GDP accounting? How can economists accept as their primary measure of economic performance one which fails to take into account increased indebtedness? How can economists function with no measure of increased value, as opposed to increased activity?
- Intentional ignorance. That's quite interesting. If you use the Three Ideology rule, it has a theoretical basis. (Ball's in my court, on that one.)
- The whole issue on public provision of data and its politicization is quite interesting. For example, I was speaking with a very nice woman who runs the satellite sensing group at U of A in Fairbanks. They want to start looking for natural oil slicks (seepages) off the Alaskan coast. That's terrific. We need more baseline data--one of things missing, for example, prior to the Exxon Valdez spill in Prince William Sound. Ironically, it's oil company activity which will provide us much broader environmental data in many regions.
What other kinds of data do we need? Who should provide it? Reinhart and Rogoff talk extensively about data in their book. Just a review of their discussion would be of interest. What data do you need that you don't have? How do you think data gathering, management and dissemination should evolve?
- The SpaceX thing is just fantastic. Private provision of space flight seems to work. NASA provided the company money. What was the role of the Obama administration in this? Do they deserve some credit? How should we think about this as a model?
- Tyler has a great link to this article: http://priceonomics.com/televisions/#television-prices It's about the lag of seller pricing expectations in a declining market. I think it's fascinating. I've never understood why buyers don't reset prices rapidly in a declining market. Why did it take four years for US housing prices to return to sustainable levels, when it was pretty clear four years ago that this is where we'd be. How should we think about expectations re-setting? Should it be accelerated, retarded, or just left alone? What are the pros and cons of each approach?
So, there are many interesting topics to write about beyond the evil Mr. Walker and that austerity is no fun.
Posted by: Steven Kopits at May 26, 2012 07:16 AM
Is "jobs saved" an argument? It isn't accepted as one when people argue against Obama and the "stimulus". Or is the point that "jobs saved" is an argument when it's for the side you want to win?
Posted by: jonathan at May 26, 2012 07:51 AM
J: I have nowhere advocated voting for one candidate or the other on this weblog, at the national or state level.
Believe me when I say that were I an employee at a private university, I would have the same views on, say, the impact of government spending cuts on economic activity at the ZIR bound...
Posted by: Menzie Chinn at May 26, 2012 08:13 AM
You're missing the bigger story of Walker financial mismanagement, Menzie. That's the LFB memo released this week which shows that Walker borrowed $558 million over the last 16 months to "balance" the budget, and kicked $714 million in expenses into future years as a result.
Anyone who says Walker balanced Wisconsin's budget is either a clueless out-of-stater, or a paid right-wing hack, because our fiscal situation is going to end up quite a bit worse than it was 2 years ago. And that's assuming we stop the bleeding by blowing Walker out of power in 10days.
Posted by: Jake formerly of the LP at May 26, 2012 09:43 AM
If unemployment in a state was high and there was a large output gap, but at the same time the state was running a fiscal surplus, would anyone say it was smart economics to take a windfall and add to the existing surplus? Since this is supposed to be an economics blog I would hope that most readers are savvy enough to understand that adding to a surplus while there is a large output gap would be a stupid policy. So why do some folks here seem to think that it's any different if the state is running a large fiscal deficit rather than a surplus? The underlying economic problem is the same, but yet people seem to think that using a windfall to reduce a deficit is somehow different from using a windfall to add to an existing surplus. It's not. If there is an output gap the government should use that windfall to stimulate economic activity and not pay down existing debt. And by the same token, if the economy is operating at full employment and the state gets a windfall, that windfall should be used to pay down debt or increase the rainy day surplus rather than be used to reduce taxes or increase spending. Why is this so hard for people?
Posted by: 2slugbaits at May 26, 2012 10:41 AM
Steven Kopits Why not a post on the strengths and weaknesses of traditional GDP accounting? How can economists accept as their primary measure of economic performance one which fails to take into account increased indebtedness? How can economists function with no measure of increased value, as opposed to increased activity?
NIPA accounting certainly has its shortcomings. For example, housework is not counted as an economic activity. That's a problem. The focus on Gross product rather than Net product sometimes skews our decisions about long run welfare. This is especially true when thinking about environmental policies and mineral extraction. And traditional NIPA accounting just doesn't get this Net product calculation right.
Increased indebtedness has been a big topic on this blog. You don't have to look far to see comments about the asymmetric effects of debt between creditors and debtors. That's the whole Fisher effect that's been talked about. Debtors have to repair their balance sheets much more urgently than creditors have to increase their spending...and that creates an output gap.
I'm not sure what you mean when you say economists "function with no measure of value." By definition GDP is the sum of value added processes used to produce a final good over the course of one year. What bothers me is that you might be slipping into that old 19th century bugaboo about some kind of fixed standard of value; e.g., the labor theory of value. Welcome to the marginalist revolution.
Posted by: 2slugbaits at May 26, 2012 10:59 AM
It's called backward induction, I am certain you are familiar with it. Polcicy makers in various states and countries look a few steps ahead and see Greek and California style calamity. They work backward to today and make a decision to reduce the government spending/GDP rather than continue along an unsustainable path to ruin.
The alternative is to double down on debt financed stimulus and hope it works; hope that the economy is kickstarted so that growth saves the day through increased tax revenue.
The thing I like about reducing the growth rate in public spending and shrinking government/GDP is that economies are resiliant. Green sprouts will bloom wihtout the help of government.
I'll take slow growth for a few years, but on a sustainable path, instead of a 50/50 shot at debt financed stimulus that leaves us with our bloated governmnent if it works, and economic disaster if it doesn't.
Posted by: tj at May 26, 2012 01:14 PM
From Economist Professor Mark J. Perry :
Describes Menzie to a T.....
Posted by: Darren at May 26, 2012 01:41 PM
“J: I have nowhere advocated voting for one candidate or the other on this weblog, at the national or state level.”
Dr. Chinn, thanks again for your comment. Now, for a listing of some easily verifiable facts:
# of Econobrowser posts on the Wisconsin economy and governor by Dr. Chinn
From 2006-2010 (under Gov. Doyle) = 0
From 2011-present (under Gov. Walker) = 34
Some of the titles of the 34 posts on Gov Walker…
Cairo has come to Wisconsin
Walker rejects union offer to accept concessions
Wisconsin - Open for Business or For Sale?
A Dog's Life in Wisconsin
Bloggers Beware! (If You Work at a State University in Wisconsin)
Walker Administration Interprets the Law
Wisconsin Governor Walker Threatens Layoffs (Again!)
Walker cancels budget bill-signing at firm run by felon
Wisconsin’s Lost Year
Governor Walker only 244,100 Short of 250,000 New Private Sector Jobs by 2015!
To those who don’t live in Wisconsin, it’s not hard to recognize the emotionally charged verbage in these post titles. While you do not explicitly endorse a particular candidate, your implicit and explicit bias drips from your posts on Wisconsin. Now, IT’S FINE to have a particular political point of view. However, hiding such a unilateral political viewpoint behind a portrayal of “professorial rational economic analysis” is not an economic discussion, it’s a political (i.e. emotional) polemic.
Should you care to, say, compare and contrast the way that (predominantly democrat) Illinois is doing budget-wise and employment wise to (for the first time ever, predominantly republican) Wisconsin is doing, then that may be an interesting post. Be sure to include that last year, Illinois raised taxes 67%, and they are still unable to pay many small business contractors this year due to their recurrent $6 billion deficit (1). How about some comments on Rahm Emmanuel asking the Illinois State Legislature public union cuts for his own city (that vastly exceed the Walker cuts) to bring his budget under control?(2)
Nah, that would break the constant narrative of Walker=Bad.
To requote from the article “What good are economists anyway “
“Economists today primarily serve the needs of powerful interests at the expense of society in general."
They often just don’t realize they are doing that.
Posted by: J at May 26, 2012 03:20 PM
Darren: A "religions doctrine"???
Posted by: Menzie Chinn at May 26, 2012 03:27 PM
J: I ask once again, what factual/numerical/analytical errors are contained in those posts? I believe you have not found a single one.
You might read those posts you have tabulated, instead of leaping into polemic against data that annoy you. For instance the Cairo title that has so exercised you is a near verbatim quote of Representative Ryan.
Finally, if I may be so bold, this is a weblog where we present our personal opinions. That is a pretty clear definition of a weblog. If it were my academic writings, well, it'd be on my UW webpage. Should I go and check to see if your weblog is devoid of any point of view? If you think so, please provide your weblog address, and I will be happy to review.
Posted by: Menzie Chinn at May 26, 2012 03:34 PM
tj Policy makers in various states and countries look a few steps ahead and see Greek and California style calamity.
Then they are either blind or need to refocus their attention on relevant examples. Greece is in trouble because it doesn't have a functioning government that can tax its citizens. How's that libertarian thing working out in Greece? And California has to rely on taxing income rather than property, which only encourages old fogies to stay in the state while it drives young income earners out of the state. Such is the legacy of Prop 13.
The alternative is to double down on debt financed stimulus
We have both theory and historical evidence that says fiscal stimulus in a ZIRP world has the best chance of working. The alternative you seem to endorse is the proven failure that Krugman likes to call "the confidence fairy." Again, how's that working out Europe?
Green sprouts will bloom wihtout the help of government.
And if we wait long enough those green shoots will grow over our graves. In the meantime we're wasting literally trillions of dollars of lost economic utility. That's just stupid.
I'll take slow growth for a few years, but on a sustainable path,
Easy to say if you're comfortably enscounced in the middle class or enjoying retirement and you don't have to worry about the future. But it flunks the Rawls test. In any event, the path you recommend will undoubtedly lead to less growth and more debt over the long run. You cannot save your way out of a deep recession.
Darren That had to be the stupidest blog post I've seen in months. This Perry guy is a laughingstock. He claims he was educated at George Mason...and I believe it. George Mason is the Heritage Foundation of the East. Apparently this Perry clown never bothered to consider that even though recycling might not lead to as many new trees being planted, recycling would also mean fewer trees would have to be cut down.
Posted by: 2slugbaits at May 26, 2012 05:01 PM
Problems with GDP measurements.
If the government borrows and spends money, then GDP goes up, as G (government spending) is a component of GDP. This creates the appearance of an improvement in welfare--and in the short term that's true--but does nothing help understand whether taking such debt was a good idea.
If I take out a loan to buy a house, my assets and liabilities both increase--but I am not better off financially. If I use the proceeds of that loan to increase consumption, my spending has gone up, but my financial condition has actually deteriorated.
In addition, GDP growth tells me nothing about whether increased economic activity provided commensurate value. If the government hires a million ditch diggers to dig ditches and then fill them in, that's in GDP. If you were a business and did the same, your costs would go up, your revenues would be unchanged, and your profits would go down. So government spending which appears a virtue in national accounts would be considered a waste of money in private accounting.
Maybe we NDW or something like that: stock of national assets, net of depreciation, less debt. Does anyone doubt that the national balance sheet has deteriorated markedly, suggesting that--in terms of return on investment--the deficits of the last few years were a pretty bad idea.
Posted by: Steven Kopits at May 27, 2012 06:17 AM
Thanks for the excellent post demonstrating that austerity is a consequence not a policy. Those states with the most Keynesian policies in the US are finding that their budgets are out of control. Most of those states were already highly taxes and have increased their taxes significantly in an attempt to close the budget gap only to find tax revenue continuing to decline.
Answering Steven Kopits' questions would go a long way in helping you understand why even the most "consumptionphilic" states are being forced to pay their bills.
Posted by: Ricardo at May 27, 2012 07:31 AM
Steven Kopits I think you're confusing stocks and flows. GDP is a measure of the annual rate of production. It's a rate, so that makes it a flow variable. The counter side of GDP is the income that attaches to each act of production, so that is also a flow variable. Debt is a stock variable.
Increasing G does not always increase GDP. There can be crowding out so that C or I or NX go down. That's what should happen when the economy is operating at normal capacity.
Regarding your housing example. The counterpart to GDP is not your acquiring the stock value of the house, it's your enjoying the benefit stream of housing goods; e.g., shelter, warmth, privacy, status, etc. Those are the flow variables that come from the housing stock. That's the counterpart to GDP. Now if you're homeless and living on the street, then you would probably put a high value on shelter, warmth and privacy. That's the counterpart to unemployment during a recession. And right now interest rates are extremely low, so the cost of reducing unemployment is very low. In your example, the cost of borrowing for shelter is very low.
We do know that if you provide an unemployed person with a job, that newly employed person is getting a benefit stream at least equal to the value of the increment in government spending. It's a value stream to that individual. There may also be multiplier effects because that person's spending may stimulate other economic activity. The real question is whether or not discounting the benefit stream justifies the pulling forward of consumption. When the nominal 10 yr Treasury is at 1.74% this seems like a no-brainer. Helping the unemployed is worth a 1.74% discount rate against the future.
Part of the problem with the ARRA is that it did not include enough investment. Too much in the way of tax cuts and not enough physical infrastructure spending that would also yield a supply side return in addition to an aggregate demand effect. And while Obama deserves some of the blame for this, most of the blame is with the Senate GOP side. Because we passed on this opportunity we will find ourselves having to spend public monies on infrastructure at exactly the time we need to invest in private capital. The time to invest in public infrastructure spending is during a recession, not during an economic expansion!
The problem with the last few years was that the deficits weren't large enough. In fact, "G" has been pretty flat over the last 3 years. The problem with the deficits prior to 2008 was that those were too large.
Posted by: 2slugbaits at May 27, 2012 08:21 AM
Menzie: My personal view is that it would been better to forgo the tax breaks for corporations ...
I agree. Walker should get rid of the tax exempt status given to the GREEDY corporation that calls itself the University of Wisconsin. When it comes to greed, Wall Street has nothing on American colleges/universities.
Posted by: Robert at May 27, 2012 11:16 PM
Darren: A "religions doctrine"???
I am quoting Prof. Mark J. Perry from the linked article.
Prof. Perry is a Professor of Economics at the University of Michigan.
Posted by: Darren at May 28, 2012 12:54 AM
2slug: "Too much in the way of tax cuts and not enough physical infrastructure spending that would also yield a supply side return in addition to an aggregate demand effect. And while Obama deserves some of the blame for this, most of the blame is with the Senate GOP side."
Another SCREAMER! Most of the blame for Obama's failed stimulus lies with the GOP in the Senate. ROFLMAO.
Would it be the GOP that Obama and the Dems REFUSED to negotiate with as Dems were writing, passing ARRA? Or would it be the Obama who let the House Dems write the mess called ARRA with little input from the WH (because he was just too darn busy playing golf)? Or would it be the Obama who knew ARRA was primarily designed as a taxpayer-funded scheme to pay back Dem constituents (unions and other anti-business suck-at-the-public-teat interest groups) and Obama bundlers? That ARRA was a crappy legislation which has done more economic harm than good lies at the feet of one person---Obama, the job killer.
Posted by: Robert at May 28, 2012 12:55 AM
The problem with your scenario is that the debt created by issuing a 10 year treasury to fund stimulus today, will be rolled over in perpetuity. It never gets paid back. It just creates a perpetual cost to taxpayers equal to the rate on the debt. (Which could top 5%+ if the stimulus doesn't work, then the market will drive rates up as the probability of default rises.)
For example, $100 of perpetual debt at 2% actually costs taxpayers between $2000 and $5000 if rates vary between 2% and 5%. (100/.02 = $5000) in present value.
Some of that returns to domestic taxpayers as income, some leaks out to foreigners.
If the multiplier on every $100 of simulus is 1.5 then the stimulus creates $150 of GDP, but costs taxpayers between $2000 and $5000 given the rates above.
If only 10% of interest payments go to foreigners then U.S. taxpayers make between $200 and $500 in interest payments to foreigners for a $150 bump in GDP.
The remaining interest payments that taxpayers pay to bondholdes redistributes income from taxpayers to bondholders so its distortionary.
The only way it makes sense is if you can show that the debt will be paid back at maturity and/or all interest payments go to U.S. taxpayers. In the latter case, it's still distortionary and a re-distribution of wealth from taxpayers to bondholders.
Posted by: tj at May 28, 2012 07:06 AM
Darren Prof. Perry is not an economist. He is a professor of finance and business economics in the business school. And he is not at the University of Michigan...he is at the University of Michigan-Flint.
As I said before, finance guys in the biz schools don't know much macro.
Posted by: 2slugbaits at May 28, 2012 07:19 AM
tj I agree that the portion of the debt servicing going to foreigners is a leakage. Except in the US most (and I mean way most) of the debt is held domestically. See Krugman's charts on this. And so what if the principal is forever rolled over? That's been true since 1791.
The real economic costs of the principal part of the debt are absorbed by the current generation. That's the generation that consumes the labor and capital costs diverted from private sector spending to public spending. What's really driving your analysis is a bifurcation between the taxpayer and those who receive the benefits of government spending. If it's clear that the benefits of building a dam go to the taxpayer, then the creating an asset worth $X cancels out a debt worth $X. As long as the utility flow from the dam is at least equal to the interest rate, then building the dam makes sense. But when you talk about fiscal stimulus you think of it in terms of benefits going to someone else and not you, so any stimulus is a loser from your perspective. And if you'll stop and think hard about a lot of the stuff you post here, you'll have to admit that you see things as an "us versus them" kind of thing. You get no benefit from an economic stimulus package and only higher taxes in the future, so you see it as bad policy. That's a line of division that the GOP is very good at exploiting. But if you believe policy makers should look at things that maximize national utility according to some agreed upon metrics (e.g., GDP growth, gini coefficients, etc.) rather than designing national economic policy around what benefits tj personally, then I think you come away with a different view about stimulus.
Posted by: 2slugbaits at May 28, 2012 09:02 AM
I am the representative agent. Oh wait, I pay federal income tax, so maybe not ;)
A couple of thoughts -
* The debt is a perpetuity while the asset is finite, so the utility stream ends before the interest stream.
*Progressives can't even produce a federal budget, won't even bring one to the floor. Until they do, then stimuls is nothing more than vote buying and payoffs to cronies. It's nice to be able to offer something for everybody and claim it can all be paid for by taking a few more tax dollars from the rich. The numbers don't add up. The middle class is going to pick up the tab.
Posted by: tj at May 28, 2012 02:54 PM
tj by taking a few more tax dollars from the rich... The middle class is going to pick up the tab.
Which is it, the rich or the middle class?
There is no stimulus. Government spending actually fell 2.1% in 2011 and will fall even more in 2012. And whether or not a budget is produced is irrelevant to the economics.
It's nice to be able to offer something for everybody and claim it can all be paid for by taking a few more tax dollars
Back to the old zero sum "us versus them" thing again.
The debt is a perpetuity while the asset is finite
Governments and corporations are immortal and almost always roll over debt. You're applying the economics of the household to government. But you've got the accounting wrong. Remember, the real resources are consumed by the current generation. What future generations get is a piece of paper that promises to pay green pieces of paper in the future. And those green pieces of paper will come from future taxes. To a first approximation there is no net effect. Taxpayers have a future liability, but taxpayers also have an asset that is worth exactly as much as the liability. That doesn't mean there isn't an economic cost to borrowing. There is. The cost is in certain kinds of deadweight costs and inefficiencies that come with taxes. But those costs are trivial compared to the truly massive costs of foregone income during a deep recession. When you're at the zero lower bound the only way investment and savings equilibrate is by reducing income. In other words, in a recession you are accepting the immedicate loss of income at the front end rather than paying higher taxes in the infinite future. That's not too smart in my book. The problem is that you keep trying to pretend that recessions only affect other people and not tj so why should tj care about ending the recession if it means higher taxes for tj in the future? Let me assure you, without more fiscal stimulus even the wealthy will be worse off in the future because we're starting to get to the point where prolonged unemployment will permanently reduce potential GDP for at least a generation.
Posted by: 2slugbaits at May 28, 2012 07:39 PM
ummm...you misquoted...you left off the "claim it can all be paid for" by taxing the rich. the 2slugs policy boils down to, "we will tax the other guy and pass the benefits on to you".
That's the 2slugs fantasy world. 2slugs does not seem to be able to grasp the fact that a tax increase on the rich is not sufficient to reduce the budget gap to a manageable level. 2slugs and his progressive team are like the unethical salesman who will tell the customer whatever they want to hear in order to close the deal. Only later does the customer find out they've been duped.
Greece, California, etc, used the same spendthrift policy that 2slugs is pushing - Taxpayers have a future liability, but taxpayers also have an asset that is worth exactly as much as the liability.
2slugs appears to be incapable of accepting the reality that the 2slugs policy of borrowing your way to prosperity doesn't work when your debt load becomes too large.
That's right 2slugs let the next generation pay for it. Tell that to those rioting in Greece and California, because their governments are having problems borrowing enough to fund their education and retirment. Go ahead 2slugs, tell them all they have to do is borrow more and their problems will go away, because they will have some assets worth exactly what they borrowed.
Posted by: tj at May 29, 2012 10:30 AM
Height of hypocrisy here. Dems sold us out on the casino money, the highway funds and the tobacco money note, tobacco was under a GOP Gov, but Dems had the appropriations power). I do agree the money should go to help those in foreclosure trouble, but then we always hate the words, "I'm from the Government and I'm here to help!"
Posted by: steve at May 31, 2012 02:42 PM