At Least 33 Taxpayers Need Urgent Rescue

October 13, 2010 Leave a comment

(With sincere apologies to the 33 miners in Chile)

There are at least 33 Coral Gables and Miami-Dade taxpayers urgently needing rescue from steadily rising property taxes.  Taxes are exhausting people’s savings, as gradually diminishing budgets are not furnishing them real financial relief.

The 33 taxpayers are praying for some comfort, but government managers, unions and employees are fighting to retain the inflated benefits dispensed by city commissions during ten years or more of unrealistic, mushrooming property values.

Since that wholly artificial prosperity will not be repeated in our lifetime, the 33 taxpayers urge the government to come back to earth, and make real, permanent and significant budget cuts while the economy returns to normal in five or six years.

That is the first great step in the rescue of the 33 taxpayers.

Filed under Coral Gables, Economy, Taxes and Fees

Did Keynesian Economics Fail?

October 11, 2010 Leave a comment

I admit it.  I am a Keynesian economist frustrated that the Bush/Obama administrations didn’t spend more to counter balance the Great Recession. If you think that they spent too much, that the spending hurt the economy, then read the following  and the full article.

In short, a lot of the spending was for low impact activities and it was small.

Here’s the narrative you hear everywhere: President Obama has presided over a huge expansion of government, but unemployment has remained high. And this proves that government spending can’t create jobs.

Here’s what you need to know: The whole story is a myth. There never was a big expansion of government spending. In fact, that has been the key problem with economic policy in the Obama years: we never had the kind of fiscal expansion that might have created the millions of jobs we need.

via Op-Ed Contributor – Hey, Small Spender – NYTimes.com.

The Chinese government, for example, spent about $500 billion for a stimulus package in a much smaller economy.  (The Chinese economy is about 40%  to 50% of ours measured in real terms and their per capita GDP is about 10 percent of ours.)

Filed under Economy, National

Economic Inequality–Not Just an Economic Matter

October 9, 2010 Leave a comment

This is not only a national phenomenon–the culture of political infighting and citizen discontent–but is fully manifested in Miami-Dade and Coral Gables politics.  Democracies solve these impasses by overturning the existing order by elections.

It’s no coincidence that polarization of income distribution in the United States coincides with a polarization of the political process. Just as income inequality has eroded any sense that we are all in this together, it has also eroded the political consensus necessary for effective government. There can be no better proof of that proposition than the current election cycle, in which the last of the moderates are being driven from the political process and the most likely prospect is for years of ideological warfare and political gridlock.

via The costs of rising economic inequality.

Filed under Economy, National

Let Local Government Face Reality–Coral Gables, Too

October 8, 2010 Leave a comment

If state and local government employment is falling, this is just to recognize that many of these governments over expanded employment, salaries and pensions during the real estate bubble. Coral Gables did this.

There are many years of adjustment that must be made in the local and state governments.  Let’s hope that our local municipal and county leaders will face reality before they keep hitting up taxpayers, instead they need to do real deep adjustments in budgets, salaries and benefits, organization and prioritizing services.  They keep postponing their own pain with the expectation that the economy will bail them out.

Regarding today’s employment report

“The private-sector growth is somewhat heartening but in total you have to expect that state and local and government jobs are going to be a drag for a number of months and perhaps a number of quarters,” Bill Gross, co-chief investment officer at Pacific Investment Management Co. in Newport Beach, California, said in a radio interview on “Bloomberg Surveillance” with Tom Keene. He called the report a “strong signal” for further Fed action.

via Employers in U.S. Cut More Jobs Than Forecast (Update3) – Bloomberg.com.

Filed under Economy, Employees and Unions, Property Values

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