State and local revenue problems
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Started by wglassfo - May 21, 2020, 11:48 a.m.

Illinios and some other states are either headed to BK or need billions in bail out funds, as their revenue will never pay the bills, unless some thing changes

Is your state going to be able to pay the bills with reduced revenue. How long will you either see drastic reductions in service, higher taxes or bail outs??

One thing we don't need is higher taxes or struggling business which re-opened will find higher taxes the straw that broke the camels back

If we want to keep as much business open and paying workers we will have to subsidize state and local gov;t for some time until we have a heaalthy economy. Contrary to many expectations I think recovery and taxes at todays rate, will take a long time

This means more debt until the debt breaks the country and the USD is heading down in value which brings on a whole new set of problems. Or maybe monitizing the debt will work???

I see so many problems ahead. I guess I am Mr doom and gloom

I wonder if I am wrong and if so where am I wrong???

Comments
By bear - May 22, 2020, 1:46 p.m.
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unfortunately,  too many in society have not learned to save for a rainy day.  everyone expects a federal agency to bail us out if times get tough.  

imo,... there should be fewer bailouts, not more.  we need to force people to save for an emergency, rather than give them handouts.  markets can be a cruel teacher,  but... dont' bail people out, and they will learn to save for an emergency.  don't bail out cities, and they will learn to build up  a rainy day fund.  

give out too many handouts,  and everyone learns that it is Not necessary to save money (since the fed will always come to the rescue).  this is the path toward more socialism, and then eventual collapse.   everyone learns to become dependent on a nanny state that will take care of us.  

so yes,  we need to just let them go bankrupt.  that would be a tough but necessary lesson.  

By cutworm - May 22, 2020, 7:49 p.m.
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Indiana has a balanced budget and is able to give 300 mil to local governments. But we don't give money to illegals. Mitch Daniels cut spending below budgeted amounts when he saw the 2008 recession. We have very good finance managers and the legislature to their credit has listened to them. Although the school teachers union wanted to spend every last dime on teacher raises. We are not against education but just throwing money at it does not solve the problems. 

By mattk - May 22, 2020, 8:17 p.m.
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I agree with you again Wayne, and this ties to one of your earlier posts regarding inflation.  Debt will be monetized, starting sometime in the not-to-distant future, in order to pay for all of this.  I don't see another way out of it, since the population certainly won't support higher taxes...

Matt

By bear - May 22, 2020, 10:35 p.m.
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remember, govts do Not always monetize debts.  some do , some do not. 

for example, argentina has defaulted on its debt about 8 times over the last century.  they did not just print money to pay off their debts (bonds).  but they do print money to pay other bills (hence their 40% inflation rate).

the euro zone, and japan have been monetizing debts for awhile now.   about half of all eurozone bonds are purchased by the ECB,  ... print money to buy the bonds to prevent a debt collapse.  that way irresponsible govt can just keep spending beyond their means.  

Same with japan.  japan borrows half its budget every year.  BOJ prints money to buy bonds.  at some point it will all come undone.  but... remember,... markets can stay irrational longer than i can stay solvent.  

currently the dems would love to have the fed monetize debts of all those liberal cities that have massive debts.  

By MarkB - May 23, 2020, 3:27 a.m.
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Think about this on a personal level. How much of your debt can you just print money to pay for it? Well, your government has decided that it can just print money, and increase debt, in order to finance the recovery, AND the support of illegels and "refugees", far better than you can earn for yourself.


You getting the picture yet?

By metmike - May 23, 2020, 12:43 p.m.
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https://www.c-span.org/video/?c4870517/user-clip-senator-rand-paul-debt-open-economy

User Clip: Senator Rand Paul - No More Debt / Re-Open The Economy

User-Created Clip

April 21, 2020

Senator Rand Paul tells it like it is...Corona Virus is basically a seasonal Flu. Mortality Rate is less than 2/10 of 1%.... MUST Re-Open our Commerce, Stop the Madness! #NoMoreDebt