Tag: Money Management Mishaps

Study Demonstrates Higher Tax Burdens Turn Away Businesses

From the so-bloody-obvious-why-was-a-study-needed department we have a study that demonstrates the bloody obvious, higher tax burdens push away businesses:

The study provided two lead rankings: economic outlook and economic performance.

Economic outlook takes into account 15 state policy variables – pictured right – for which Louisiana improved from 24th in 2008 to 16th in 2011.

California, Illinois, New Jersey, Vermont, and New York were the lowest five in the rankings for economic outlook – in that order – while Utah achieved the highest score, followed by Colorado, Arizona, South Dakota, and Florida.

The entire study can be found here [PDF]. Common sense should allow people to come to the realization that businesses are more likely to leave one state for another if that move means paying far less money to a government entity. Remember that every dollar a business has to send to the state is one less dollar that can be spend on employee salaries, benefits, research and development, new facilities, and every thing else businesses pay for.

A state can get away with taxing only so high until that tax burden becomes enough for those being taxed to consider moving somewhere else. Businesses especially have a major bargaining chip in this economy as they are the only providers of wealth generating jobs. If states wish to keep unemployment from increasing they’ll have to create a business friendly environment to attract new employers. Increasing taxes isn’t the way to do that and as California is learning is actually the exact opposite of what should be done.

The State Shutdown

I doubt you noticed this morning but negotiations broke down between the parties last night and Minnesota’s government went into shutdown mode:

Talks imploded Thursday between DFL Gov. Mark Dayton and Republican legislative leaders in the final hours before a midnight deadline, and Minnesota began a historic government shutdown.

“This is a night of deep sorrow for me,” Dayton said in an address at 10 p.m. that was punctuated by jeers and hisses from Republicans, including some lawmakers.

Personally I’m glad the state went into shutdown mode. There are some valuable lessons that people need to learn and the only way to learn them is through experience. One of those lessons is the centralizing services is a bad thing because when the monopoly entity falters and stops providing those services everybody is negatively affected. If there were competition on all markets any single private entity failing would only affect that entity’s customers whom would then be able to go to a competing service.

I firmly believe that this entire shutdown is nothing more than a pissing contest to get votes during the next election. Both parties are blaming each other for the shutdown which has lead to parks and rest stops being closed on the 4th of July, a travel heavy holiday. Having parks and rest stops closed on this holiday ensures the maximum number of people will be negatively impacted in a way that they’ll easily notice (honestly the schools shutting down during the summer doesn’t affect too many people). People will remember the 4th of July where they had to go somewhere besides a state park and take that into consideration come voting time.

Either way the state shut down and all is still well. No riots are occurring in the streets, nobody is being murdered that wouldn’t have been had the state been running, water and electricity still work, and the highways still function.

What Will and Won’t be Open During a Minnesota Government Shutdown

We’re only a few days away from a possible government shutdown here in Minnesota and people are confused about what state provided services will and won’t be open should the government take a leave of absence. The Red Star has a summary of what services will and won’t be available during the possible shutdown.

Reading through the list it’s bloody obvious to me that nobody is going to even notice a state shutdown. My concern is reading through all the shit that the government has obtained a monopoly on providing. For instance this little gem:

STILLWATER LIFT BRIDGE

Would close to vehicle traffic. It would be raised to allow boat traffic and would remain in the raised position.

Why the Hell is the state government charged with operating a lift bridge? Does that seem like a job that you need a government bureaucrat to perform? Being the bridge is connected to Stillwater why not let the city of Stillwater run the damned thing? Read through the list though and then ask yourself what downside would exist to the government shutting down. The shutdown is nothing but a boogeyman being used by those at the Capitol to justify their existence.

You’re Asking the Wrong People Obama

It’s being reported that Obama is meeting with Senate leaders to negotiate spending cuts:

President Barack Obama is meeting Senate leaders negotiating on spending cuts and raising the US debt ceiling, as a deadline for action looms.

Mr Obama and Vice-President Joe Biden had what officials said was a “constructive” meeting with Senate Democratic Majority Leader Harry Reid.

Mr Obama was due to meet Republican leader Mitch McConnell later on Monday.

The problem lies in the fact that there seems to be only one person on Capitol Hill that has actual knowledge in economics and financing. Obama shouldn’t be talking to the Senate leaders but should be picking up the phone and calling Dr. Ron Paul who is one of the few members of our government that isn’t a complete Keynesian (and those are the fuckers who got us into this mess).

Unfortunately for those of us living in the United States Obama has decided to talk with Mitch McConnell who only seems capable for parroting the standard Republican party line:

The White House has said Republicans want to use the negotiations with the Obama administration to secure tax loopholes for corporations, tax breaks for the wealthy and subsidies for oil and gas firms.

“We have to have a balanced approach so that no sector of society, not the middle class, not seniors, not any one segment of the business community, has to bear any disproportionate burden,” Mr Carney told reporters on Monday.

This is what gets me about the Republican party, the often talk about things that sound somewhat libertarian on the surface but underneath they lack a true understanding of why libertarians express the beliefs they do. The majority of Republican also talk the big talk until it comes time to act, at which time they reveal their true colors as authoritarian Keynesian just like the Democrats (really there is no difference between the two parties).

Securing tax breaks isn’t going to fix the problem, we need to dramatically cut spending if we want any hope of keeping our inflated fiat currency from dropping in value fast enough to violate the theory of general relativity. Unfortunately the spending cuts must come from the political suicide sectors of Social Security, “defense” spending, and Medicare. Without cutting heavily from all three of these no major change will occur and our money will continue to inflate which will reduce the purchasing power of everybody who is dependent on our paper currency.

I also doubt the Republicans have the balls required to keep the debt ceiling where it’s at. At least if we did that it would force us to adopt a balanced budget for the year. But as usual there will be a back and forth between the Republicans and Democrats that will be little more than a pissing contest. After the pissing contest both sides will agree to compromise and raise the debt ceiling which will further increase our debt and fuck us over in the long run.

Government Money Management

There are numerous jokes about the government paying obscene amounts of money on frivolous things. How much do you think the United States government spends on air conditioning tents and temporary facilities in Iraq and Afghanistan? Information presented by Every Day, No Days Off puts the bill at $20 billion which is $1 billion more than NASA’s entire budget.

The largest part of United States spending is military related. Some people will say that spending $20 billion on keep our troops comfortable is a minor cost compared to the sacrifice those soldiers make. I say that sending them over there in the first place is not only an offense against them but also against those countries. Most of those soldiers signed up with the intention of defending this country but instead were sent overseas into third world countries that posed no viable threat to the United States. We’re risking the lives of soldiers for needless occupations that accomplish nothing more than getting soldiers kill and dumping endless amounts of cash into the military industrial complex.

When a country has to spend more on air conditioning for occupying troops than getting our asses further into space you know the is a problem. In our case that problem is imperialism which has been shown to be an unmaintainable system time and time again (seriously it didn’t work out in the long run for the Mongols, Romans, British, Spanish, Soviet Union, or any other military force).

Overreaction Defined

Let us pretend that you’re in charge of a reservoir that contains treated drinking water. Now let’s pretend that the owner of the reservoir is an idiot and doesn’t have some kind of cover to protect that treated water. One day while you’re happy at work doing nothing you learn that some bozo came by last night and pissed in the reservoir. In this scenario would you just shrug it off since there are some eight million gallons of water in the reservoir and thus the piss is so diluted as to be irrelevant or do you drain the entire fucking reservoir? If you answered the latter you to could work in Oregon’s waterworks:

Some eight million gallons of treated drinking water have been flushed down the drain in the US state of Oregon after a man urinated into a reservoir. Did such a vast amount of water have to be dumped?

So what you ask? Well this reservoir isn’t a privately held facility so draining the entire thing is getting it refilled is going to cost $36,000. Ouch! I wonder if they also drain the entire reservoir if they find a dead animal in it. Maybe they should look into covering that reservoir in the future, it can’t cost $36,000 for a tarp to toss over that giant pool.

I’m Truly Shocked, California Did Something Right

Holy shit I’m actually surprised by something that happened in California, and it’s a pleasant surprise. I never thought I would actually have something nice to say about that forsaken state but it sounds as though they’re going to stop paying their “representatives” until the state budget is balanced:

It is often said if the state of California was a country it would be the eighth biggest economy in the world.

But with a $10bn deficit to match, and residents fed up of legislators missing the annual budget deadline by months, they voted for a new law.

It is the first time Proposition 25 has been put into effect – and it means all 120 elected members of the State Assembly and Senate will not be paid their wages, or their living allowances, until they pass a balanced budget.

Hell. Fucking. Yes. Obviously the “representatives” are complaining but they have no ground to stand on. Those people were hired to do a job and have failed to do it. As they have failed to do their job it’s only right that they don’t get paid (I’d fire them frankly but alas that’s not an option when government is involved). California should expand on this and refuse to pay their “representatives” until the state debt is paid off as well. Imagine how quickly such a program would accomplish turning California from a the most debt-ridden state into a debt-free state.

For once I can say there is something other states can learn from California, don’t pay the legislature until the budget is balanced.

Companies Abandoning California at an Accelerated Rate

What happens when you increase the tax burden on companies in order to correct a state deficit? Those companies start leaving. Companies are run by people and people are generally willing to put up with only so much abuse until they analyze their situation and consider their options. California has been increasing taxes on businesses and it’s now to a point where many businesses there have decided it’s simply not worth being there and are taking their services and jobs to another state.

In 2011 the rate of businesses leaving California has increased to 5.4 a week. Each of those businesses are also taking their jobs with them meaning the unemployment rate in California is going to continue getting higher. This is also a great demonstration of the fact that states simply can’t tax their out of debt. As they increase their tax rates the victims of those increases are going to leave and then will effectively pay $0.00 in taxes to the state.

California, like most socialist nations, is finally collapsing under it’s own ruined economy. They’ve tried to offer too much for too long and now they’re going all Soviet Union. Governments need to learn that the only way to effectively eliminate their debt is to spend less money. People will survive without government services but they won’t take loosing 90% of their earnings. I’m pretty sure it’s too late for California but I hope my state notices this and learns that increasing taxes on businesses and the wealthy (those who generally own businesses) is not going to reduce our debt but increase it in the long run as tax payers flee for friendly states (South Dakota is right next door and they’re generally pretty nice in comparison).

Yet Another Excuse By the Government to Stay in Afghanistan

The United States love to invade countries and then stick around even after the “mission” is completed. It seems that the government is now grasping at straws trying to find a reason to continue staying in Afghanistan even though the war there isn’t all that popular here at home. Fresh off of the press is the new excuse that Afghanistan could face an economic depression if the troops leave:

It calls for better use of the roughly $320m (£195m) in foreign aid the US spends every month in Afghanistan, with a focus on sustainability.

It concludes that misspent foreign aid can result in corruption.

First of all I don’t know why we send money taken from American citizens through force by the government to other countries. Since the government put a gun to our heads the least they could do is keep the money here. Second… foreign aid can result in corruption? No shit. In other news water is wet and most politicians are assholes.

It can also alter markets and undercut the ability of the Afghan government to control its resources.

“Afghanistan could suffer a severe economic depression when foreign troops leave in 2014 unless the proper planning begins now,” the report says.

Basically 2014 will roll around and our government will make some claim that we must keep our troops there a while longer in order to prevent economic disaster. It’s a poor excuse but the government doesn’t know how to make any other type of excuses.

California Trying to Push Out More Businesses

Seriously are the legislators in California retarded? Don’t answer that, I already know the answer is yet. It just seems that at some point in California’s recent history the lawmakers there would have learned something. Apparently not as California’s economy is going down the tubes faster than an unwanted pregnancy on prom night and that doesn’t seem to be fast enough for their government. With rising unemployment and businesses fleeing the state the politicians in the Assembly just passed a law that would tax online retailers:

The state of California could collect more than $1 billion a year by taxing Amazon and other online retailers if a bill approved by the Assembly becomes law.

Of course this won’t bring in $1 billion a year as companies would have to stay in California to pay which they’re not going to do. Amazon has already left states that have attempted to extract tax dollars from them.

In order for this law to make money California is going to have to go full socialist and ban anybody from leaving the state without government approval. If California wants to make money they’re going to have to create a business friendly environment where companies can flourish instead of being trampled by the boots of government interference.

If you live in that forsaken state it would be wise to get out now before the prevent you from doing so.