Tax Cuts Sunny-Side Up

The Georgia Chamber of Commerce held its annual Eggs & Issues event this morning. There, Lt. Governor Casey Cagle promised tax cuts to help the faltering economy.

Cagle, speaking at the 2010 Eggs & Issues event sponsored by the Georgia Chamber of Commerce, moments ago said lawmakers this year “have to have foundational changes.”

With the state already facing a budget that is $3 billion less than it was four years ago, and preparing to cut another $1.5 billion, Cagle said the Senate will work to insure “we do the responsible thing, create efficiencies and bring government back to the 21st century and focus very deeply on cutting taxes.”

Cagle spoke yesterday about the budget crisis. It now seems that tax cuts will be a subject covered by the new senate budget task force.

House Speaker David Ralston also added to Cagle’s sentiments for budget management:

Ralston said the budget crisis provides an “opportunity” for the General Assembly to determine what state government should and should not be doing.

“We know we have a challenging budget situation,” Ralston said.

The fiscal conservative in me is thinking that trying to cut taxes with a budget deficit is a bad idea. The budget will be a big issue in this year’s General Assembly. Making necessary cuts while keeping taxes low will be quite a challenge for the Georgia General Assembly.

107 comments

  1. John Konop says:

    I agree!

    …..The fiscal conservative in me is thinking that trying to cut taxes with a budget deficit is a bad idea…..

    As I said we should shift tax abatement money toward SBA loans to stimulate growth. Small business needs capital not tax cuts!

        • ByteMe says:

          Just because you have a theory doesn’t mean your theory works in every circumstance. Witness the “Laffer Curve” that turns out not to work past a certain point. Good theory, but when over-applied it turns to mush.

          • Icarus says:

            “work past a certain point”

            That’s what the theory is. A curve. Supply side econ states that you only receive a revenue benefit if you’re within a certain range on the curve. Move beyond that range, and a cut is a cut.

          • ByteMe says:

            Not to hear the Reagan mythologizers talk about it. As far as they are concerned, every tax cuts spurs spending and increased business and reaps more revenue for the government.

          • Icarus says:

            Reagan was the greatest President of the 20th Century, in my opinion.

            The crap that is pulled under his name today makes me ill.

            He once said of “liberals” that it wasn’t what they know that was the problem. It was just that so much of what they know wasn’t true.

            We’ve come full circle.

            But if we try to actually educate our faithful, the terrorists will win.

  2. We’ve cut taxes, we’ve cut extraneous spending – there’s not much more that can be done. Cutting taxes at this point will only increase the shortfalls, if we are going to cut taxes some services have to be cut as well.

  3. NorthGeorgiaGirl says:

    I can guarantee you there is still waste in our budget, because there are things like the Center for Puppetry Arts that still get money from the state.

    I will not be satisfied that they have cut enough until they show us exactly what is in the budget, online, and they can prove to me that they are only funding things that are absolutely essential. Until then, no tax increases.

    • HowardRoark says:

      How ironic that you bash the Center for Puppetry Arts on the official blog of the Center for SockPuppetry Arts. Kidding.

      But in all seriousness, we’re by no means running this state lean. There are plenty of places that can be cut or even eliminated. Is it enough to make up the deficit? I don’t know, but I suspect it’s close.

    • Icarus says:

      I would be very interested to know how much funding the Center For Puppetry Arts receives from the State.

      The last time I was at that infernal place was probably about 5 years ago. After the performance, they made an angry plea/demand that we tell our legislators that they need more funding, then proceeded to trash the Bush administration.

      On the way out in the gift shop, they had their Axis of Evil puppets for sale, which included Bush, Cheney, and Rice if my memory serves.

      They have the right to whatever political message they want to convey. I don’t believe they have the right to use my tax dollars to push it.

      • Mad Dog says:

        Ic,

        Silence the loyal opposition by not giving them office funds.

        Pretty much what the Ruskies did, eh? Take funding (jobs) away from anyone who dared speak out in the state driven economy?

        You’re welcome to criticize spending by the Center, but are you sure tax dollars were used by the gift shop? Or did the gift shop make money?

        • NorthGeorgiaGirl says:

          The bigger question is: would the center even exist without state funding?

          If not, the question about the gift shop is moot. They are free to fund their own opinions, but I shouldn’t have to pay for something like that.

          • Mad Dog says:

            If the gift shop is making money, they are funding their opinions. If not, they are working entirely on the government dime. Which belongs to China, not you and I.

            Although many people want to pick and choose from a theoretical or mythical menu of government services, government has never worked like that.

            Except in theocratic societies where one made an ‘offering’ to the priests before asking to get justice.

            The even bigger question than your bigger question is: what would you have exist. Many people seem to be leaning towards a ‘Sparta’ instead of an ‘Athens.’

            Sparta banned art.

          • GOPGeorgia says:

            MD,

            Instead of talking about banning art, how about we introduce art to the world of supply and demand? If someone makes something that sells, more power to them. If they don’t, how about they get a job so the tax payers don’t have to subsidize their hobby?

          • Mad Dog says:

            So let’s introduce you to supply and demand of government services.

            Have you paid taxes equal to all the benefits you’ve ever received from Democracy, which is a huge component of our way of life as supported by our government.

            And if you have, show me the numbers?

            If you want me to do the numbers for you, let’s start with how many kids you sent to public school.

          • GOPGeorgia says:

            “let’s start with how many kids you sent to public school”

            My guess is there are about 2,500 kids in the Walker County School system, but I’m not sure how many kids have gone through the system while I have been a tax payer.

            I have no children of my own, but I think it’s in my best interest to educate these children because once they graduate they will become part of the area economy and provide me with business and services. I think educating children is a legitimate function of (state and county) government.

            I’m not willing to put my personal taxes on PP for all to see, so we will skip that part of your request. Now I am waiting for you do your math problem your are trying to create.

          • Mad Dog says:

            You misunderstood but still answered the question. You have no children of your own in public schools.

            So for me to work out how much of a benefit you’ve gotten cannot include expenses to educate your children.

            And if you won’t share how much you’ve paid (taxes) to be an American, none of will know if you if you are a net loss to the system or a net provider.

            But you could answer this. What would you pay to become an American?

            Don’t cop out, please.

            If you had no money, were living in a mud hut in an undeveloped country, how much of your future earnings would you pay to legally become an American … with your current social and economic status.

            Meaning, what would it cost Bob the Bedouin’s son to become you. What is your life worth …

          • GOPGeorgia says:

            Very loaded question. I’ll try to give an honest answer but it may not satisfy you.

            The other variable that you didn’t mention is that I have already gone through the school systems and in a way, my taxes are me paying back that service.

            I was born an American by the grace of God, but I am a Georgia by choice. I could easily move to TN where I was born, but I love Georgia. I was lucky enough to be born in the U.S. and not in Canada, Great Brittan, Germany, Haiti, or anywhere else. In my lifetime, I have developed attitudes about illegal immigration and legal immigration. I don’t think citizenship in the Untied States is something that should be bought.

            How much would I pay to become an American? Well as I stated before, with my history of being an American, I don’t think people should be allowed to pay. If I were born in another country, I might be content to be an Australian if that is what I had been all of my life. If I had been born in South Africa, Afghanistan, India, Panama, or parts unknown, that amount I would pay to became an American would have to be weighed against how much I loved that country and my family there. That amount would change depending on where I was from. It’s easier to live in Canada than Yugoslavia, therefore I would pay less if I were from Canada. Besides, being that close, I could just visit.

            I think a little bit better question is how much would it take to pay me to move from the US. Once again, it would depend on where I am moving to. The Cayman Islands sound better than Iceland to me. I would not want to leave my family and friends and would not leave for any price if I could never see them again. I’m not going to say that there not a figure I wouldn’t move for, but it will be many times more than what I expect to make in my lifetime.

            God made me an American and I am thankful for it. I can’t put a dollar figure on that, because if I were born elsewhere I would not appreciate it so much. The US cannot take in everyone in the world living in a mud hut from an undeveloped country.

            For the purpose of conversation, you may assume I am not on welfare or other government assistance. I think I pay more into the system than what I take out of it. However, the rights that I enjoy will not have a price tag associated with them.

            Now back to the thread. I said arts (not arts programs in schools, anything that is not marketable on it’s own) should not funded by tax dollars, and schools should be.

          • Mad Dog says:

            GOP,

            Sincerely, thank you for the time you took not to answer the question. It a was thoughtful and reflective response.

            But the question goes to the issue you did touch. There are intangibles in our quality of life. You don’t want to put a market value on what you have.

            That’s fine.

            I’m suggesting your birth was an accident and you seem to assert that yourself.

            But if you had to buy your citizenship every year at the going global rate, what would that TAX be? Including the things you don’t want.

            It’s a simple matter, my friend. Here’s every you got last year, if you don’t want that next year, vote with your feet.

            If you want some but not all, too bad. It’s a package deal. Pay the price of admission. What are you willing to pay …

            That’s the real tax discussion.

          • GOPGeorgia says:

            MD,

            You travel down a strange path. I have yet to decipher what I would pay to be an American citizen has to do with what the government should be spending our money on. Are you suggesting that we open up or borders and charge people to come in to off set the deficit?

            Your math question leaves out variables such as the exchange rate that will vary. On some days the Yen is up, and on other days it is down.

            Trying to answer your question, going by your strange logic, I live in mud hut in an undeveloped county. It’s unlikely I would come into US currency in that circumstance and I might even barter as opposed to using currency.

            Let’s say in live in a mud hut down by the river. (I hope it doesn’t flood.) I am a fisherman and I catch 20 fish a day. (I use a string and a hook. I’m to poor to buy worms.) It takes me five fish a day to live, so I can spend or save fifteen fish a day. I might use 1 extra fish to go to the movies ( pay for a ride to watch a lion eat something.)
            I suppose I would save 104 fish a week for my trip to the US. Over maybe five years of saving, I would be able to pay 27,040 fish to come to the US. Do you know anyone who would take them (almost all of them are rotten, I don‘t own a refrigerator) and let me in the US? Is that enough or do I have to fish some more? (I am assuming my fish are tax free in the country I live in, and I haven’t been eatten by a lion.)

            BTW, I have been told that I was a planned birth, but maybe my parents were just being nice. I’m not sure what that has to do with the topic either.

            Now I’ve given you a figure (in fish) of what I hope would be enough to get me into the US. In the going global rate, I’m not sure what the tax would be. The US may have tariffs on fish, but Georgia doesn’t tax food items.

        • Mad Dog says:

          GOP,

          I understand your response.

          When asked to live or die by market competition, you prefer nativism. But apply your concepts of competition to others that you don’t like.

          Nice double standard and conflicting philosophy.

          Hope you and Sonny have fun fishing.

          🙂

          • GOPGeorgia says:

            My (second) response was almost totally in jest, but if you are going to ask absurd questions, don’t complain when you get absurd answers.

            If one is an American citizen, that is not a function of market forces. It’s not something that can be bought or sold; at least should not be in principal.

            My tax dollars, on the other hand, should be reserved for legitimate functions of government. Art, as an industry, should be subject to the functions of supply and demand. Selected hobbies, be they art or fishing, should not be subsidized by the government. If government is going to write a check to anyone with a hobby, I like to eat chips and watch TV. I don’t fish in real life, but I don’t live in a hut down by the river either.

          • Mad Dog says:

            GOP,

            Reply in jest. Don’t be serious about what government provides you or what it’s worth to be an American.

            You’re stuck with it. You think the cost of continuing as an American is too high.

            You assume you’re overtaxed but admit there are priceless intangibles that you have never earned.

            When asked for the fair market values, you retreat to nativism. Some people, Americans, are risking their lives and therefore all of their future earnings to maintain your intangibles. Other people, not native, are risking their lives to live here illegally. So there is a “market worth” to those intangibles.

            If you feel defensive, keep replying. I am satisfied with your replies as being fully responsive and representative of your beliefs.

          • GOPGeorgia says:

            MD,

            I don’t really feel defensive as much as not fully understood. I think part of that is based upon the fact I don’t fully understand where you are coming from. Please help me understand. Educate me on the marketability of my citizenship. Is it something I can put on E-Bay?

            Do you think that there is a dollar amount on the value of your American citizenship? Would you sell it to rich Russian or a poor Haitian? Would you charge them the same if you had to take their place in Russia or Haiti? If not, what would you say the “market value” of your citizenship would be? Would it change upon who you sold it to and where you had to move to once you sold it?

            IMO, government engages in many things that it should not and I view that as my tax money not well spent. I don’t think that I am over-taxed that much. I think that many others who make more money than I do are over-taxed and one day, I hope to earn as much money as they do. THEN I will be over-taxed.

            I honestly have no clue as to what you mean by “You think the cost of continuing as an American is too high.” I am happy to stay right here and keep paying my taxes. That doesn’t mean I want to see my tax dollars wasted.

  4. B Balz says:

    Cutting taxes sounds wonderful and is counter intuitive to resolving the current State budget deficit.

    Our State Budget, at least according to the Georgia Budget & Policy Institute (GBPI) needs revenue, not just cuts. This link shows their take on the matter:

    http://www.gbpi.org/documents/20090911.pdf

    Advocating higher taxes during a recession did not work during the Carter years, yet lowering taxes (which I love to hear) seems too good to be true. Perhaps we can spend less in State government. But where?

    More than 80% of the State budget is composed of General Funds that are spent on 50 agencies and the three branches of government. Education is roughly half of the General Fund. Rep. Fran Millar outlines these facts and signals where he believes the cuts will need to come from: Teachers.

    To wit:

    http://thecrier.net/articles/2010/01/12/columnists/in_the_legislature/fran.txt

    Good luck with that.

        • IndyInjun says:

          Check Again….$53 billion at the beginning of 2008…..$42 billion at the end of 2009.

          $10.5 billion lost in two years.

          Think how bad it really is under Mark to Market accounting.

          Think about $10.5 billion loss in just 2 years versus a budget in the $20 billion vicinity annually.

          Think about how none of these numbers includes the $20 billion unfunded liability for health care.

          Looking for a Fed bailout? Analysis of its numbers shows $2 trillion in revenue to service $100 trillion in liabilities.

          • Mad Dog says:

            Indy,

            “Mark to market” was developed as an accounting standard by private industry. Overwise all investments would be a pig in a poke.

            BTW, good to see you again.

          • IndyInjun says:

            Thanks Mad.

            Overwise all investments would be a pig in a poke.

            Exactly.

            “Conservative” media like FOX and talk radio in 2008 started beating the drum to stop Mark-to-Market accounting. It happened.

            NOW, what most of the folks who met the appeal to call Congress face are 401k plans, pension plans, and all manner of benefit plans chock full of toxic assets recorded at face value, when some of those things are worth 5 cents on the dollar.

            Common folk were TRICKED into demanding that financials LIE TO THEM so that millions get statements that bear no semblance to the money actually available at retirement.

          • Harry says:

            “Conservative media like FOX and talk radio in 2008 started beating the drum to stop Mark-to-Market accounting. It happened.”

            The lobbying to eliminate mark-to-market came from public companies and investment banks, not conservative talk radio. I never heard talk radio address it, up or down. Most conservatives like me supported mark-to-market.

      • B Balz says:

        Indy could have the decency to wait until after I have had my stale crust of bread and cold 1/2 cup of instant coffee to begin depressing me? (;>)

  5. Provocateur says:

    And to think Fran Millar and Mike Jacobs wish to have the state takeover MARTA. Who else will fall for their piping (i.e., the Pied Piper)?

    • B Balz says:

      MARTA needs help, it cannot continue to gnaw away its’ reserves to survive. DeKalb and Fulton County residents pay for MARTA and Grady, yet both are used by all metro residents.

      I applaud Reps. Millar and Jacobs for bringing this issue to a Statehouse where many members could not care less if MARTA or Grady failed.

      We are ONE Georgia.

      • janna says:

        We are ONE Georgia? Oh my. To those of us that in the far flung somewhat rural corners of the state, it sure does feel like there are two Georgias. For the record, I couldn’t care less if Marta fails. Do metro Atlantans care that we have sub-standard roads down here? We both know the answer to that one.

        • ByteMe says:

          And yet we here in Atlanta pay more for your roads than you do for our public transportation. Seems like we care more than you do. Perhaps the roles should be reversed for a while and you fund us while we let your schools and roads rot.

        • B Balz says:

          Hey Ms. Janna,

          I care that sick folks in rural Georgia may have to travel on those poor roads a long way to find medical care. I care that my friends in Early County wish they had a Publix.

          Our lawmakers naturally serve their constituents, all of whom have differing needs. But make no mistake, if the economic engine of Atlanta falters, so too do the far flung corners of our State.

          The numbers behind MARTA and Grady are large and need to be amortized more equally among their users.

          Which far flung corner do y’all call home?

          • You Betcha says:

            I think Early County is pretty happy with its Harvey’s/Food Lion and the fact that it still has a hospital with an emergency room, a weekly newspaper and pretty decent public schools – pretty admirable considering it’s among the top 10 poorest (out of 159) counties in the state. But, I do agree … the rest of the state will follow Atlanta in success or failure.

      • Mozart says:

        B Balz,

        The solution is not for the state to takeover MARTA. That would be like adopting a bear that you know will eat you out of house and home.

        Privatize the service. Get the governing “authority” out of the way…far out of the way from the wasteful spending decisions they make.

          • Mozart says:

            B Balz,

            This state has proven itself time after time to be inept with just about everything it attempts to do. How’s that GRTA working out?

            The fact is that GRTA sucks, MARTA sucks, and all we have to look forward to in this state is a long string of nothing but the most incompetent leaders a populace could ever have a nightmare about.

          • ByteMe says:

            Sounds like you don’t like the very people you voted for. Or that you haven’t been able to convince people to vote for the competent people in this state. Or that you haven’t been able to convince competent people to run for office. MARTA, GRTA, ARC… the boards for these groups are all appointed positions made by the people you helped (or didn’t do enough to) elect.

            Don’t try to act like you aren’t part of the problem and this isn’t a place where you can make a difference at the ballot box.

          • B Balz says:

            MARTA is one of the, if not the only major US mass transit without ANY State funding. Mass transit is not usually profitable, yet is is a necessary function for urban living. If MARTA can be privatized, that’s fine by me, too.

            The MARTA governing board is a problem, agreed, and I know that Reps. Millar and Jacobs, both from Atlanta, know this. Part of making MARTA less of a financial sucking chest wound is to replace or diminish the power of its’ Board. Just like we did with Grady, before it got millions from Home Depot founder. Grady cannot turn a profit either, but it is a major tertiary care facility and cannot go away.

            I understand the reluctance of anyone not in Atlanta putting one penney toward MARTA with the current Board in place. But having the burden of both organizations fall on Fulton and DeKalb counties is not right either.

          • B Balz says:

            No offense, You Betcha, but when I was visiting friends in Early County, some of them sure wanted a Publix.

            Frankly, with the Harris family’s White Acre Farms beef, I think y’all have the best thing going. Mmmmm-mmm.

  6. John Konop says:

    The problem is we have a revenue issue. That is why using capital to expand small business over tax abatements will fix the problem faster ie more jobs more revenue. That said I am sure we could also make some cuts but if we do not fix the job problem this is an economic race to the bottom.

    And the real debate is will a tax cut or more debt capital create jobs. And I think if you talk to most small businessman that is a no brainer. They economy is starving for expansion capital.

    • This is precisely right. We have spending that could be cut, but we are already one of the more efficient states. Cutting taxes more has to be coupled with massive cuts in spending to big ticket programs.

      If we cut taxes down to 5%, and we didn’t cut spending, obviously debt goes up. It’s not such a difficult concept, yet most people ignore it.

    • Mad Dog says:

      Yeah, John, Ask small business if they want a tax cut. There’s a fine way to run government. Just test the political wind and react. Ops! That wasn’t what you were saying. You want expansion capital!

      Those who provide expansion capital aren’t seeing unfulfilled demand. Ask a few ex-loan officers…

        • John Konop says:

          Mad Dog

          Business loans are not the same as consumer loans. And the guidelines do require substantial investment, cash flow……..if done right.

          At the end of the day from my view many businesses do have opportunities they are just lacking the debt capital. And the ratios of debt to equity for business loans are way out of whack for businesses that are even cash flowing.

          And with a loan unlike a tax abatement you would get around 5 times the expansion via the leverage. And a business that is bowering money will not sit on it via the cost like they could tax cut.

          Also by putting money to work it would drive up employment and that would create more tax revenue.

          Business is not the enemy and the real issue has been favoritism toward big business over small business. And small has been a better driver of the economy.

          Clinton and Bush promoted “to big to fail concept of economics” with congress via campaign donations over sound fiscal policy.

          • Mad Dog says:

            Didn’t Bush promote an ‘ownership society?’ There’s a gem of social engineering.

            No one in economics currently agrees with your bare assertion that employment is going to rise as the recovery progresses. It’s becoming apparent that since the 1990’s, recovery does not restore employment to previous levels. And certain jobs have become outmoded. Construction … finance related to housing …

            BTW John … I make business loans. I know the market well.

            There’s just no requirement to force lenders to bailout failing businesses of any size. Most of what I’m seeing is small businesses that have been living off the commercial line of credit. Don’t blame an entire industry for the behavior of individuals, John.

    • Mozart says:

      “a revenue issue”

      Yeah. Except stop referring to it as “revenue” as it is actually tax dollars squeezed out of every man, woman, and child and wasted on crap authorized by clowns masquerading as elected public officials.

  7. PaulRevere says:

    “Ralston said the budget crisis provides an “opportunity” for the General Assembly to determine what state government should and should not be doing.”

    It’s really encouraging to hear elected officials talk about the proper role of government. Big points for Ralston. I just hope he has the courage to keep standing when the pushback starts.

  8. Junius says:

    Blind devotion to the mantra of tax cuts, no matter the circumstance, will ultimately lead to fiscal disaster for our state and political disaster for the GOP. Yes, wring out some more spending cuts (out with the puppets!) but folks, there ain’t much left without seriously considering whether we really need public schools. While some here may be all for that, shutting down the method by which the vast majority of Georgia’s future workforce get their minimal book learnin’ is not a recipe for long term political viability.

    When you consider the unprecedented unfunded mandate DC is about to dump on us in the form of medicaid expansion, the fiscal condition of our State, and every other state save Nebraska, is very, very scary. Tax cuts are a great short term political winner for the right. Spending and entitlement expansions are great short term political winners for the left (which the right will never have the gumption to unwind). Both sides win but the result is ruin. At both the federal and state level, we are closer to the abyss than we care to admit. Painful spending cuts and painful revenue increases are the only logical way out. I fear we are still 10 years away from either political party having the courage to admit it.

    • IndyInjun says:

      At both the federal and state level, we are closer to the abyss than we care to admit. Painful spending cuts and painful revenue increases are the only logical way out. I fear we are still 10 years away from either political party having the courage to admit it.

      Exactly. The only thing I would add is that the abyss is closer to 10 months away than 10 years.

      Georgia teachers won’t see their promised retirement, no matter their power. Social Security, same. Military retirement, same. PBGC insureds, same. FDIC depositors, same. $UST bondholders, same. Default beckons.

      It may be default via inflation, as Greenspan intimated when he said that SS beneficiaries would get every dime of promised benefit, but he would not guarantee their purchasing power.

      Google Zimbabwe and Weimar.

      How do I invest in gas pumps with the required 5 foot wide Total Sales displays?

    • Ken in Eastman says:

      State income taxes are such a small part of our overall tax burden, a tax decrease in Georgia at this time would have almost no positive benefit.

      We are indeed close to the abyss and standing on sloping ground.

  9. Mad Dog says:

    Ignoring the dialog to this point, might read it later. Not sure any of it is literate yet.

    As I was taught in finance and economics before politicians adopted global free markets … our tax system was not designed to tax the earnings required for essentials, like food. All taxation was on excessive earnings through a gradually increasing set of rates. (Progressive taxation)

    The economic benefits are obvious. When disposable income falls, there is an immediate and automatic tax cut to stimulate the other all economy. The cut is temporary and when the economy returns, government tax revenues rise automatically and immediately.

    Too many politicians learned to trade balanced budgets and automatic economic controls to greedy and selfish citizens for votes.

    Live now with your choices, fools.

      • Mad Dog says:

        SPEWS my coffee as I am now part of the permanent aristocracy via NOT TAXING MY DEAD FATHER IN LAW!

        Should be a tax on estates over $200,000. Especially when we put our brains to work.

        Who makes the decision to pull the plug on Grandma or Mom? Someone with a possible financial stake in the outcome. Most healthcare costs come in the last three months of our lives.

        “Cut the cord and reap a tax hoard!”

        • ByteMe says:

          So you think Bill Gate’s kids should just keep the billions he made even if they did nothing to earn it? Or do you not? Hard to tell from your post.

          I grew up with a bunch of the “lazy rich” and taxing them makes me feel better 🙂

          • Mad Dog says:

            Byte,

            I was making fun of myself.

            I don’t think Paris Hilton deserves her place in society or adds anything to our society from living off the hard work of previous generations. Nor do I think when she reproduces herself that we will gain anything.

          • ByteMe says:

            I actually do think she’s turned her “persona” into serious money and can’t fault her for that. I just grew up with too many kids who had this air of entitlement just because had big bucks and mommy and daddy wouldn’t make them grow up and work for a living.

          • Mozart says:

            Wow. Nice to know Byte and Mad are into social engineering to the point of picking who wins and who loses…or, rather, which outcome is “fairer” than another one?

            Scary people who have scarier thoughts.

          • Kellie says:

            Jealousy becomes hatred of the rich.
            Sounds like your party has limited space for people who happen to be born into wealth; unless their last name is Kennedy, King, Kerry… or any other politician who punishes the producers in this country.

          • ByteMe says:

            My “party”?? Who said I was throwing a party for them?

            Mozart: taxation has been used for social engineering for nearly 70 years and — surprise! — we’re all still here.

  10. IndyInjun says:

    Live now with your choices, fools.

    No way that happens. What comes is a melee in which groups try to keep their ENTITLEMENTS at the expense of everyone else.

    A very real bloodbath comes, if sane folks don’t grab the reigns and do it right now.

    Damn near everyone is in denial, but the math cannot be overcome.

    In the current interest rate environment it takes a $1 million amortizing balance at the 10 year Treasury yield of around 3.5% to fund ONE $60,000 pension for 25 years.

    The Retirement system figures a 7.5% return.

    Another danger is that the system has been reaching into riskier investments in a desperate search for yield.

    • Mad Dog says:

      Indy,

      The Ten Year Treasury was at 3.7% or better for the past week. The long term earning rate for intergovernmental bonds recently fell to 7.1% from 7.5%.

      I don’t remember the average rate paid on all borrowings but it seems like it was somewhere around 4 … You can look it up by searching for the 2009 Financial Statement of the United States, printed every year.

      And we are living with certain choices, good or bad. I do agree with your comments on entitlements. But I have a very different definition for entitlements. Merely that govern does determine who gets what. You can call the what entitlements but I just want to avoid a term recently loaded with negatives, i.e. welfare for Black women driving Cadilacs and birthing dozens of babies by thousands of fathers.

      Just my way of agreeing … slightly

  11. B Balz says:

    Sam Zell pointed this out in 2002. Hard to call math a liar. As I said the other day, life is not linear. Revenues will once again flow, and if new technologies in biomedical research, energy, telecom, etc. continue….

    Everything will be OK.

      • IndyInjun says:

        I would like to be an optimist, too, but there are no rational models of growth sufficient to overcome the massive debt that do not fall into the category of hyperinflation.

        Let’s just get the crash and crisis over with and rebuild America for the kids. Yeah it will take a decade. Yeah it will take putting sane people in control.

        Politically this is impossible as teachers are the penultimate power as someone correctly noted above. They have the state constitution behind them, which prohibits bankruptcy, and these things are backed by the power to tax property to the point of confiscation. Like all of the other “entitled” that I enumerated above, they will literally FIGHT with a vengeance to get ‘theirs.’ The problem is that getting “theirs” means the destitution of everyone else. Do you think that is going to work?

        The “everything will be rosy” again attitude is denial.

        • Ken in Eastman says:

          Here, let me just hand you a pair of these spectacles. Notice the slight tint. 🙂

          Indy, I know it’s a mess. We’ve discussed this before, but we’ve got to keep plugging away.

          Why is it so hard to get the FED audited (OK and possibly disbanded)?

        • B Balz says:

          You may be right, amigo. hyper-inflation ala Weimar Republic will be the end of Western Civ. Muslim extremists will take over, the Chinese will come here to protect their investments.

          The other scenario is the old fashioned one: DEFAULT by devaluation of the dollar.

          Indy, what is the answer, in your opinion?

          • Icarus says:

            Again, Threadjack.

            And Indy’s solution is widely known. There is none.

            Take it to an open thread if you wish to continue this discussion.

          • IndyInjun says:

            We have to totally rebuild society based on “love thy neighbor.”

            Everyone with an “entitlement” needs to give up 50% immediately. 50% might not be enough.

          • IndyInjun says:

            Threadjack?

            Pointing out the financial condition of Georgia’s Teacher Retirement System and that it lost $10.5 BILLION or more than 1/2 of a year’s budget, then discussing whether said situation devolves to the point confiscation under the current state of law?

            Icky does not like Indy.

            Now that is a threadjack for ya.

  12. B Balz says:

    Icarus: Right-O! Ruh roh, Indy, we’s in big trouble now. They are onto us. Hide the secret ring!

    Methinks Lt. Governor Cagle is posturing with Tax Cuts knowing the issue is one of revenue generation and reduced spending. The latter two don’t sell nearly as well as being able to say:

    “I wanted tax cuts but was overruled and now we got new fees (revenue enhancement) and less services. See what THEY did to you?” Why if I were the Guv…

  13. John Konop says:

    I respect and like Indy and he does make some very valid points. But we should take into consideration a country is not person and does not have to worry about ever having money for retirement it just keeps plugging along.

    I agree we need some drastic change in the near future. The real issue is people want things they cannot afford. And this problem permeates in both parties as well with the voters.

    If we indexed via life expectancy government pensions and social security it would be a major fix. The Republicans well yell this is a tax increase and the Dems will say this to tough.

    If we had people contribute the real cost of Medicare and had cost controls in place the system is fine. Once again the Republicans will say that is a tax increase and scream death panels while the Dems will scream we blew money in Iraq so why not here.

    If we got off foreign oil we would recycle the money in our own economy and create more jobs and help fix the tax revenue issue. And this issue should be solved by a combination of common sense ideas from public transportation, Nuclear power, electronic grid…. Yet both sides want the issue not the solution

    If we stop the welfare programs for big business and were more user friendly to small business we would see more economic growth. Also we must enforce trade agreements instead of turning a blind eye to intellectual property theft, currency manipulation…..

    A few suggestions that I hope both sides will focus on rather than finding issues to tear our country apart for the purpose of winning elections.

  14. IndyInjun says:

    But we should take into consideration a country is not person and does not have to worry about ever having money for retirement it just keeps plugging along.

    Shouldn’t that read “Printing” along?

    The USA is hitting the limits of this capability.

    If the money becomes such a joke that it won’t buy anything, hasn’t the government got more than a “worry” but a crisis?

    I really enjoy the interaction here, because it makes the nuttiest of the gold bugs totally prescient.

  15. IndyInjun says:

    Ok, so who in the legislature is going to do as Sonny suggested 3 years ago and tackle the growing swath of the budget consumed by the health care entitlement for state retirees and teachers.

    Will it be funded by tax increases? More payroll deductions? Cuts in Benefits?

    All three?

    I am waiting to see how this is shared.

    What about the $10.5 billion retirement plan loss? Gonna fund more? Raise taxes? Pray for manna from the Fed?

    • Ken in Eastman says:

      Indy,

      I’m hearing from good sources that tax increases and tax cuts are both off the table.

      The general consensus is further reductions in spending is the only place to go. The governor does not want furloughs for teachers, but that could still happen. If it does, then it won’t be many.

      I think the GA House is looking at entire programs, asking: “Is this something the state needs to do or just something we would like to do?”

  16. IndyInjun says:

    What about the borrowing for Unemployment Insurance from the feds? $70 million was borrowed to finish 2009 and payments were $1.5 billion last year.

    Is this cost, probably another $billion, just to be swept under the rug?

  17. Mad Dog says:

    Going to cut off the discussion because it doesn’t run where you want it to run?

    Hmmm. I’ve commented on that before and you know where I stand.

  18. IndyInjun says:

    Here is another tactic that I have been hearing about that Georgia may employ, but it is like squeezing a balloon – costs just pop up somewhere else.

    U.S. cities will face a collective budget shortfall of at least $56 billion over the next two years, with the current recession not seen hitting bottom until 2011

    The collective shortfall could reach $83 billion through 2012, the league said. Cities will seek to cure revenue declines and spending pressures with higher service fees, layoffs, unpaid furloughs, and drawing on reserves or canceling infrastructure projects, the report said….

    States are also threatening to cut another lifeline for cities — direct aid transfers. As they attempt to reconcile their own battered budgets, states are saying they can send less money to cities.

  19. Scott65 says:

    These guys elected to state office are morons…no other way to slice it. Cagle is talking about cutting the capitol gains tax…again (it worked so well the first time). A little lesson on that for our states elected…YOU ARE A STATE THAT IS REQUIRED TO BALANCE YOUR BUDGET NOT THE FEDERAL GOVERNMENT!!! The federal government can cut taxes and afford to wait 2yrs for the full effect to trickle through the markets because they can run deficits. You cant do that in Georgia!!! You have to balance the budget so to cut taxes you also have to cut spending. The sharp decrease in revenue means you have to do that already

  20. No Fan of Baseball says:

    Seriously? We’re going to cut taxes even more when we’re at the point where we are putting the safety and well being of the state at risk because of the dramatic and drastic budget cuts?

    I can understand cutting taxes when we are meeting are obligations, but at this point, cutting taxes even further is similar to failing to pay your bills so you can go out to dinner.

    I mean, this may work for the folks down at the Capitol who go along and eat fancy meals thanks to lobbyists, but in real Georgia, we’re at the point of 4 day school weeks, not enough cops on the street for safety, and broken down roads.

    Be responsibe, not irresponsible.

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