Bond Rating and Future Expenditures Are Reasons to Be Cautious With Tax Reform, Says Gov. Deal

Over the weekend, Walter Jones wrote a long story for Morris News on the potential risks of moving to a sales tax and reducing or phasing out the state’s income tax. The idea has drawn a lot of support here in the state where John Linder and his successor Rob Woodall have sponsored the federal version, H.R. 25, also known as the FairTax. Georgians look to no income tax Florida to our south, and to Tennessee to our north, which only taxes interest and dividend income and wonder why the same thing can’t be done here. They point to Texas, another state without income taxes, but one that has experienced phenomenal business growth.

Georgia 2016 RevenuesThe pie chart to the right shows the various sources of income going into Georgia’s 2016 budget. This year, 45% of revenue will come from the state’s individual income tax, 4% from corporate income taxes, and 26% from sales taxes. That’s three quarters of state revenue, with no other source making up more than 6% of revenue.

Two bills were introduced during the 2015 session that would move increase sales tax revenue while reducing the top 6% income tax rate. The one receiving the most attention is Rep. John Carson’s More Take Home Pay Act, which would drop the top income tax rate to 4% while raising the state sales tax rate to 5%. The House Ways and Means Committee has begun to hold hearings on Carson’s bill, which has undergone some revisions since it was introduced.

Another bill, introduced by Reps. Brett Harrell and B.J. Pak, is a more moderate measure that would trade the loss of most tax deductions for a three quarter point drop in the income tax rate, to 5.25%. And as part of House Bill 170, which provided additional revenue and funding for transportation, a Special Joint Committee on Revenue Structure will meet this fall to see if it can come up with some sort of proposal that would have the advantage of not being vetted by the normal House and Senate committee process, and would be subject to up and down votes in the House and Senate.

Against all of this comes Governor Nathan Deal, who worries that a significant change in the Peach State’s tax structure could mean a loss of the state’s AAA bond rating, and potentially cripple his efforts to change the way we fund K-12 education. In his story, Jones quotes a number of economists and investors who urge caution when considering changes that could affect the state’s bond ratings, and point to the experience of Kansas, which dropped income tax rates and found itself in an ongoing revenue squeeze.

While economists generally agree that there is a long-term benefit to reducing or eliminating the income tax, in terms of bond ratings, they look at cash flow, something Gov. Deal recognizes.

“We need to ensure that we’re on solid footing in order to sustain the budgets that we have continued to pass and will pass,” [Gov. Deal] said.

A boost in annual education funding by $1 billion over the last two years and rising health care costs are the two biggest expenditures just to maintain current service levels.

“There are areas where we know it’s going to cost us more money to do things,” he said.

But he’s interested in going beyond just maintenance-level government.

“If we envision any major reforms coming out of our education reform commission, there will be, probably, significant dollars associated with those recommendations,” he said. “… I would hate for us to be in a posture where we have to reject those simply because we don’t have a stable revenue stream to be able to support them.”

One way that governments have been able to ensure relatively consistent revenues is to draw from a number of different sources, typically income taxes, sales taxes, and property taxes. In theory a drop in revenue from one source will be mitigated by more stable revenue from the other ones. But, Georgia eliminated state property taxes, leaving that revenue source to counties and cities.

Georgians will have to decide what is more important moving forward: a consumption tax that offers long term growth potential leading to more jobs and an improved economy, or a more balanced approach that provides the stability and incremental growth preferred by the financial sector.


  1. greencracker says:

    Oh, I would submit there is at least one other factor that influences what we decide to tax …. besides paying the state’s bills and satisfying the certified geniuses at the bond rating agencies.

    It is the same factor that made a bestselling author of one Dr. Thomas Piketty.

    That book, that millions of people thought was worth cracking open, discusses many things such as a redistributive function for taxes.

    Yep, he’s looking at you, income tax, a little. But what he’s staring down is … well, a thing I guess we kind of have in inheritance tax … you, wealth tax!

    He argues that the cash off a wealth tax would not really make a big difference to national governments; and that would not be the point of it. He argues for using a wealth tax to keep wealth from concentrating so much in the 0.1%’s pockets. (Yes, 0.1%, and 0.01%, for that matter)

    The point is, people who are not evil and who are not even Kim Jong Un-certified Communists find it worth $20 and the time it takes to read 700 pages to see how tax policy might be used to do something about wealth and/or income inequality.

    All that being said, I don’t actually think the “redistributive” argument counts for much in Georgia. I’m just noting: it exists. And tax policy is not a bloodless argument all about percentages and trends.

  2. John Konop says:

    ……….Two bills were introduced during the 2015 session that would move increase sales tax revenue while reducing the top 6% income tax rate. The one receiving the most attention is Rep. John Carson’s More Take Home Pay Act, which would drop the top income tax rate to 4% while raising the state sales tax rate to 5%……….

    Average family in Georgia makes about 48k

    They pay about $1,876.00 after deductions

    New plan:

    Would be about 66% of the old rate on income tax after deductions about $1, 238

    On 48k after all taxes let’s say they have about 60% left to spend which is about 29k

    If 75% of that is taxable under the new plan that is about 22k

    If 22k is taxed at 5% that is about $1,100 in sales tax

    Add on $1, 238 in income tax that is $2,338 verse $1876 they were paying. Is this not a tax increase on the average tax payer? If we decrease purchasing power of the average tax payer would this not have a negative effect on the economy for no real reason other than going into general funds?

    The reason I proposed eliminating payroll taxes with a NST or VAT, is it would truly put more dollars back into the economy. This looks like it will take money out of the economy with no real use other than general funds. I get if we were using it for a logical infrastructure improvement that will create jobs. I am confused…..I could be off on my assumptions, via just doing quick math in my head….Would love to see a real breakdown on how it effects the average tax payer. Macro numbers can hide how it effects behavior……That is why I try to look at it with examples based on income brackets.

    • Jon Richards says:

      John, your analysis fails to take into account that your hypothetical taxpayer is presently paying 4% in sales tax. So the one percent increase is $220, for a total of $1458, which would be a decrease in total taxes.

      • John Konop says:


        From Link:

        …….QuickFact: The average family pays $1,876.00 in Georgia income taxes. [1] ….

        No, I took the number from the tax rate site, because with deductions I could not do fast math in my head, and all the examples…. Also, I made the assumption that the average income per family would correlate with average tax paid. I think that is a mean number, which is why by bracket would give us a better view on the effect. I am sure within 5% my fast math in my head is fairly accurate for the average family.

      • John Konop says:


        My bad, you are right I did not take the 4 % paid already in sales tax, I assumed this was add on to what we pay.

        If you take the $1,876.00 the average family was paying reduce it to $1, 238 that would be a $638 short fall per average family. And this gets worse as income bracket increase, obviously a larger short fall. The $ 638 would only be off set $220 in extra sales tax. leaving a $418 short fall per average family, and even higher as income increases. I agree this would be a massive issue with bond ratings…..Sorry my bad…. Very important post, thanks!

  3. benevolus says:

    The state is feeling the same pinch that average people are. The cost of living (expenses) is rising faster than income (revenue). Except we the people don’t don’t anybody we can raise the taxes on!

  4. Scott65 says:

    First, I want to see that list of economists that think eliminating income tax is a good thing. Second reducing income tax and raising sales tax does nothing but shift the tax to the poor who are struggling as it is. Third, does it not bother anyone that only 4% of revenue is from corporate tax? Hell, big business in this state is probably revenue negative if you take into account all the services, wear on infrastructure, etc.

    • There’s nothing wrong with a broad sales tax paired with some sort of guaranteed income to offset the regressiveness for poor people. In fact most economists (liberal and conservative) favor consumption taxes. A national VAT to replace FICA would actually be preferable in a lot of ways – you+employer pay 15% of your income (up to $115k) whether you want to or not currently, at least with a ~15% VAT you could choose to save and not pay the tax.

      I will note that the proposed bill in Georgia does seem to be more regressive than the current system, so it’s probably not a good idea. Unless I’m wrong, it doesn’t expand deductions on the income tax and it does raise the sales tax and apply it to more things than it currently gets applied to.

      • John Konop says:

        As you know I have been pushing replacing payroll taxes with a VAT or NST for a long time. I do think it would increase consumption ie more jobs….and help fix SS.

        This current proposal ,looks like Jon is right it will come up materially short on tax revanue. Unless Carson has a budget to match the bill, it will have a very negative effect on our bond rating.

  5. elfiii says:

    @Scott65 “Second reducing income tax and raising sales tax does nothing but shift the tax to the poor who are struggling as it is.”

    If consumption taxes are so evil to the “poor”, why aren’t the “poor” in FL, TN and TX up in arms about it? Consumption taxes put the power of deciding how much tax one pays in the hands of the citizen, not the government. Could it be the “poor” like it that way in those states? Could our “poor” learn something from them? Could those of us more fortunate than their “poor” and our “poor” also learn something from them?

    @Scott65 “Third, does it not bother anyone that only 4% of revenue is from corporate tax?”

    Did you factor in the amount of sales tax those businesses are paying? What about the motor fuel tax?

    No, it doesn’t bother me because if they were taxed more the costs of their goods and services provided to end user retail customers like you and me would be that much higher, not to mention in the end you and I pay all corporate taxes. The corporations are merely collection agents for the state and that goes for all forms of taxes they pay. Make no mistake about it, you are paying all the taxes. You’re only objection seems to be the manner in which you pay it and how it is collected.

    In this country we like to value ourselves as “equals” until it comes to taxation. Then the other guy always has it a lot better than us and he should pay the lion’s share. Live in the king’s realm? Pay the king’s ransom. The ransom is too high? Protest or move.

    • taylor says:

      “Consumption taxes put the power of deciding how much tax one pays in the hands of the citizen, not the government.”

      That is a ridiculous reason to support a consumption tax. If your criteria for a good tax is people paying what they want, would you support a system in which people send a check for whatever amount they want? I choose to pay nothing.

      I grow a lot of food and spend a relatively small amount on items I can’t make myself. But I should not have to contribute to the government? I appreciate everyone else paying for my kids’ education, my police and fire protection, libraries, prisons, etc.

      • elfiii says:

        @ taylor “That is a ridiculous reason to support a consumption tax.”

        It is an excellent reason to support a consumption tax taylor. It gives you back your control over the government instead of you being a serf and doing what the government demands you do.

        In addition, consumption taxes stimulate personal saving. Personal saving is called capital formation. Capital is the quintessential ingredient of economic prosperity. Without it everything else is an academic pursuit.

        • benevolus says:

          “It gives you back your control over the government”.
          So, let’s say you don’t support NASA, you forego buying a lawn mower?

          • elfiii says:

            I do not like much of what the NSA does especially its’ extra Constitutional spying on me (I got this 4th and 5th Amendment hangup. I promise I’m trying to overcome that but have been so far unsuccessful.) but that does not preclude me from buying the lawnmower. What would preclude me from buying the lawnmower would be based on my need for a new lawnmower, my personal estimation of the value received for the price paid and finally the tax burden levied on the sale. That is because I do not have a choice in what the government spends my money on but I do have a choice on how much money I will give them. If those three things combined add up to not buying a new lawnmower I will choose to fix the one I have or buy a used one.

    • MattMD says:

      You are very mistaken about corporate taxes. There is not a single economist out there who says that corporations pass on all taxes to the consumer. This contradicts basic microeconomics. I suggest you locate a text and read about it. Why do companies have tax attorneys and seek out all types of potential tax incentives/abatement’s for these taxes they don’t pay?

      Why do you use “poor” in quotations? Would lower income be better for you? Note that Texas and Florida have other avenues of income such as oil and tourism revenue, respectively. I don’t think it is worth potential bond rating issues when Georgia has only somewhat recently come back from serious budgetary short falls.

      My understanding is that sales taxes are more prone to losses in revenue during recessions as well.

      • Raleigh says:

        “There is not a single economist out there who says that corporations pass on all taxes to the consumer”

        Yea nice try but.

        By the way you understanding about sales taxes being more prone to losses also might be challenged by property tax assessors due to the real-estate meltdown they had to work through.

        Why do companies have tax attorneys is easy. If they can find any loophole it only increases their profit which is the reason they pay lobbyist to garner favor in the tax code. It’s a form of crony capitalism.

        Really it’s an easy concept even for an MD. Companies must pay taxes so where do they get the money to do that? Their customers of course.

        • MattMD says:

          The largest percentage of taxes paid by corporations comes from stockholders. Your source is not an economist which is what I stated. Go read it back again, perhaps slowly this time?

          And don’t condescend to me, pissant.

          • Raleigh says:

            Pissant? Well that’s just precious, bless you little heart. Maybe you should read the article slowly yourself and look into the background of the author. It seems Mr. Worstall who is a fellow at the Adam Smith Institute in London quotes the CBO ( That’s the Congressional Budget Office which I believe employs just a few Accountants and “Ecominist”) and a gentleman (or pariah to some) Edwin Seligman who could be considered the father of income tax in that article. That is just one article from one man. There are many, many others that corroborate that theme.

            Expanding on your tone do just a little more research, pea brain.

        • gt7348b says:

          I don’t usually agree with Matt, but in this case we are on the same page. Especially since Citizens United determined that corporations are people, shouldn’t they pay for the infrastructure the rest of us pay for through our income taxes?

      • elfiii says:

        @ MAttMD “I suggest you locate a text and read about it.”

        I don’t need to do that Doctor. I have been a Certified Public Accountant for well over 25 years and I am well versed in how all taxation schemes work and how business entities react to them since I have spent the balance of my adult life advising them on these matters.

        Profit is a simple mathematical equation. It is revenue minus expenses. For financial accounting purposes (and that’s what matters most) all taxes are an expense and every business entity factors them that way when computing the profit margin necessary to remain a profitable ongoing business concern. Accordingly, included in the sale price of any good or service offered for sale by that entity is a provision for taxes so indeed, you the retail consumer do pay all the taxes, not the business. Again, they are merely the government’s collection agent.

        Any economist who tells you otherwise is displaying his/her ignorance. For every economist who argues business entities don’t pass on all taxes I can prove empirically they do in spades.

        Perhaps it is you who needs to go read a book?

        I use the word “poor” in quotations because the fact is the “poor” in this country enjoy an economic lifestyle far superior to most “middle class” people in the rest of the world and any taxes they pay will be well subsidized by the cheese the government hands them at our expense.

      • elfiii says:

        @MattMD “My understanding is that sales taxes are more prone to losses in revenue during recessions as well.”

        Your understanding is incorrect. During recessionary periods it is employment that suffers first and most. It is income taxes that take the biggest hit. People who are unemployed don’t have income so they don’t pay any income taxes. People still have to buy essentials on which sales tax is assessed.

    • People favor the status quo. They rightly view any “tax reform” as code for tax increase. So yes, poor people in TN probably favor not having an income tax and keeping the current system.

      I’ve polled Georgia proposals to eliminate the income tax and replace it with a larger and broader sales tax many times. It is not popular here, whether with the poor or the middle class or the rich.

      Status quo = popular, believe it or not. Change = viewed with great suspicion.

      • Raleigh says:

        I can tell you why tax code change is viewed with great suspicion. Every time we hear tax reform mentioned under the gold dome the reality always a tax increase as you said. I think it’s more about a word that is seldom used in association with the gold dome now and that word is trust.

    • benevolus says:

      “why aren’t the “poor” in FL, TN and TX up in arms about it? ”

      I’m afraid that might stand up as the most senseless comment of the day here. Are you really really basing your opinion of a tax issue on the idea that the anger of the poor in other states hasn’t risen to a level to reach your awareness?

      • elfiii says:

        I’m sure you would. I believe most people are intelligent enough to understand what’s what regardless of their economic station in life. Unfortunately, you do not extend the same assumption. Apparently you equate “poor” with “intellect”. That’s pretty condescending towards your fellow man don’t you think?

        It is a normal human trait to prefer choice, no matter how limited over government mandate. Go conduct your own anecdotal poll and ask people if they would prefer a taxation scheme that gives them the choice of when and how much tax they will pay v. a taxation scheme that mandates how much they will pay and when. I predict 70% plus will prefer the former over the latter. Those would be the smart people, regardless of economic station.

  6. bsjy says:

    Since the starting point for every government-sponsored tax change is “we need more revenue,” I would support any change that was paired with an amendment to the state constitution to implement zero-based budgeting. We would not lose our AAA rating if we were forced every year to defend every dollar of public spending. From Beltlines to box lunches to bike lanes, every great idea that spends taxpayer dollars should face an uphill climb like the one from Peachtree Battle to Piedmont Hospital. Zero-based budgeting would be a huge help in that effort.

    • elfiii says:

      I would prefer a C.A. requiring a 2/3 super majority in both houses to raise any tax. If the electorate view the expenditure requiring the increased tax revenue as a good and necessary thing they will not object to the additional tax.

      • benevolus says:

        Ugh. Maybe you’ve been an accountant for a long time but your ideas on politics are about 7th grade level.

        • elfiii says:

          My ideas on politics are at least equal to yours because they are opinion. My knowledge on matters of finance, taxation and economics are far superior to yours. Go back to the shallow end of the pool.

          • John Konop says:

            As an expert in “finance, taxation and economics”, should not Rep Carson have to submit a budget that correlates to his proposal like in the real world?

            • elfiii says:

              Yes he should and we should scrutinize it carefully based on the assumption figures don’t lie but liars can sure figure and all politicians are liars regardless of their partisan affiliation.

              All that being said, a budget based on sales tax revenue as opposed to income tax revenue can be accomplished with no shortfall in revenue if one sharpens one’s pencil and makes a reasoned accurate projection. The problems with projections be they sales tax revenue or income tax revenue is they are based on assumptions and no matter how reasonable and empirical the assumptions are we all know what the word “assume” really means.

              In the final analysis the argument boils down to a simple interrogatory – In which manner would you prefer the government fleece you? Arguments to prove one or the other is better are all specious because the end result is always the same, regardless of which road you take. Government costs money and us working stiffs are the ones who pay that money.

              What I find interesting is in this day of overwhelming dissatisfaction with government in general by all parties there are still those who cling to the notion it is better to ruled with no choice than to dictate to the rulers how, when and to what degree they will rule us.

          • benevolus says:

            I want to play in the deep end!
            So you have said that sales taxes give you control over your government, but you have also said that sales taxes are stable because people still have to buy essentials. How do you reconcile those two statements? And if your are saying people can forego buying discretionary items as a way to throttle government spending, isn’t that a good way to de-stimulate an economy?

            • John Konop says:

              The biggest issue that drags an economy, is debt ( private and public) increase faster than production. This is what I warned about before we had the last crash. The reason demand goes down is the debt loads destroy demand via not having enough money to spend. If your spending is based on just increasing debt loads, ie 6 year new car loans, credit cards, student loans… is only matter of time when the bubble blows up. BTW China has the same problem just a different debt sugar pill… Which is why the world want cheap gas prices to keep the game going for a while…which would help if people used it deleverage, but we know most we just buy more stuff…

              You might find the 2 articles interesting:

              ……Through the centuries there are also numerous cases of less prominent countries that suffered a similar fate of economic decline resulting from too much debt as a percent of total output……

              …….….The countries identified in the study, as well as those previously cited, exhibited many idiosyncratic differences. Some were monarchies or various forms of dictatorships. Others were democracies, both nascent and mature. Some countries were on the Gold Standard, while others had paper money. Some had central banks and some did not. In spite of these technical and structural differentiations, the effect of high debt levels produced the clear result of diminished economic growth. Indeed, the fact that the debt impact shows through in these diverse circumstances is a clear indication of the powerful deleterious impact of too much debt. Six characteristics seem to be uniform in all circumstances of over-indebtedness in historical studies, and these factors are evident in contemporary times in the U.S., Japanese and European economies.

              Six Characteristics

              1. Transitory upturns in economic growth, inflation and high-grade bond yields cannot be sustained because debt is too much of a constraint on economic activity.
              2. Due to inherently weak aggregate demand, economies are subject to structural downturns without the typical cyclical pressures such as rising interest rates, inflation and exhaustion of pent-up demand.
              3. Deterioration in productivity is not inflationary but just another symptom of the controlling debt influence.
              4. Monetary policy is ineffectual, if not a net negative.
              5. Inflation falls dramatically, increasing the risk of deflation.
              6. Treasury bond yields fall to extremely low levels………….


              What Will Become Of China’s Ghost Cities

              ……Chinese cities; cities that would remain vacant for years. China single-handedly topped the phrase “bridge to nowhere” and made ghost cities a euphemism for lousy development planning in the world’s No. 2 economy. Anyone can build a useless overpass, but it takes China to build a city for a million people with no buyers in sight.

              The naysayers loved the Western media’s discovery of China’s ghost cities. It was evidence that China’s growth of the last 20 years was based on building things nobody needed or wanted. This was planned obsolescence on a grand scale. And now that the economy is slowing, what will become of those cities? Many of them are debt burdens carried by the developers who haven’t sold a single unit.
              From shopping malls to soccer stadiums, hundreds of new cities in China are largely empty. And yet more cities are still being built deep in the heart of the country. All in hopes that its rural population will one day move to a flat in a city without a mayor………….


            • elfiii says:

              First of all you aren’t deep end material based on your reading comprehension skills alone. I did not say sales taxes are more stable. What I said was income taxes take the biggest hit in a recession. That is so because they make up a plurality of all taxes paid. In a recession everything takes a hit be it jobs, income, taxes of all kinds, asset valuations etc. etc.

              You also assume a zero sum game in your statement people foregoing spending money de-stimulates the economy. That isn’t the case. I direct you again to my remark about saving vs. spending = capital formation. In recessionary times capital formation is essential so that capital is available to expand economic activity which eventually equates to a recovery, jobs, rising incomes and more cheese for the government.

              Some people believe in the false chimera “Dafuhcit spending” ( a little Senator Jim Sasser lingo) by the government creates jobs. It does no such thing. Government does not create jobs. Private businesses create jobs. The only thing the government can do to aide in that process is get out of the way. The government borrowing money for deficit spending takes capital away from more productive endeavors by the private sector. You cannot “command” an economy to improve by the government picking winners and losers and vomiting vast sums of borrowed money on the chosen “winners”, especially if you never repay the debt. “Shovel ready jobs” is three lies in one statement.

              Chronically speaking it is no surprise the U.S. has had one of the lowest personal saving rates of any industrialized western world country and thus a low rate of capital formation. That is because the income tax burden on income is excessive. In fact, the U.S. has the highest corporate income tax rates of any advanced democracy. In addition the U.S. is one of the very few who double taxes foreign earnings of domestic corporations. Because of that, all that cash remains overseas and is not domesticated back into our country where it can be employed at home to our mutual benefit. Our moronic tax scheme is not only excessive but it yields a windfall to other countries, many of whom are not friendly to us.

              The fundamental rule of capitalism is capital goes where it is treated best. You can’t stop it from doing that. It is liquid and fungible. We don’t treat capital very well in this country anymore so it has decamped to more accepting environs and continues to do that at accelerating rates much to our detriment and the benefit of others. Do you really believe all those American corporations are moving their operations offshore merely because of the low cost of labor? Much of that is offset by the transportation costs to ship their goods back to the U.S. for sale. It’s just that the economic opportunity costs of doing it that way are still less, all things considered, including and especially taxes.

              I direct your attention to the founding of this country and it’s original scheme of taxation. It was a consumption tax levied and apportioned among the several states. It operated successfully until 2/3/1913 when the 16A was passed and it’s been downhill ever since. Income taxes give complete control over both capital and the means of production to the government. Why a free people would ever continue to subject themselves to such tyranny in the face of an overwhelming mother of all epic failures is a mystery to me. I guess some people prefer being told what they will and won’t do by a tyrant to bearing the personal responsibility of liberty and choice.

              When will you personally have had enough? When our national debt hits $20 trillion? $30 trillion? Or do you want to wait for national insolvency and bankruptcy to happen? Everybody has a breaking point. We’re way past mine. What’s yours?

                • elfiii says:

                  I was certain you would respond that way. No worries. You have been schooled by someone who knows that of which he speaks. Don’t be hatin’ on the messenger. Embrace the message for the fundamental truth it is.

                  • benevolus says:

                    Your probably right. Everything I learned about FDR was wrong. He didn’t create any jobs. He was good at getting out of the way.

              • John Konop says:


                …..Chronically speaking it is no surprise the U.S. has had one of the lowest personal saving rates of any industrialized western world country and thus a low rate of capital formation. That is because the income tax burden on income is excessive…..

                The reason we have people way over leveraged is 70% of all lending is backed by tax payers. That does not include the government backed credit default swaps…interest only housing with very little down, student loans….only are a product via tax payers taking the risk, without proper coverage. You can change the tax rate, lower gas prices… just does not matter in the long run if people can get irrational amount of debt, via it being guaranteed by tax payers with irrational rules. Would you loan a kid 250k to get BA from a private school in anthropology, psychology, social work, teacher, English……? Guess what you are doing it, and it is about 1.4 trillion and growing….. Would you guarantee a loan to family making 50k a year for 200k a home interest only and 5% or less down? Guess what you are doing it….You get the point?

                • elfiii says:

                  Yes John I do get your point. In this country we have endured 2 debt financed bubbles in the last 15 years, the most recent one being the biggest and worst in our history and we have paid a terrible, temporarily discounted price for it. The fact the Federal Reserve has propped up asset values with loose money (not part of their mandate) has simply delayed the inevitable. When, not if we slip into the next recession they are out of ammo and won’t be able to save us from ourselves this time. We will reap the whirlwind. Had they left things alone and let the free market sort out valuations of assets we would be in a full blown recovery and most people would have learned their lesson about debt. But that would have meant they would have to throw their crony banksters under the bus and let them fail. They simply couldn’t allow that.

    • John Konop says:

      I agree, zero based budgeting would help, but this revenue cut is not realistic, especially with infrastructure needs. The best analogy I would give you is in business I deal with everyday. Sales tells me we can sell way more if cut pricing…..The problem is can we make money at that price. Which is why you do an analysis, if the numbers do not work out it is not smart to change the price point.

      Same thing with taxes, obviously everyone likes lower taxes, can we provide the services we need and outstanding commitments already guaranteed by tax payers with the lower tax revenue. All I am saying is if Rep. Carson thinks this a great idea, he should have to submit a budget that correlates to his proposal. If not the bonding agencies will down grade us. Is asking for a real plan/budget from Rep Carson, and or anyone who supports this bill not appropriate?

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