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Why a cratering Wall Street hits Massachusetts state government extra hard
By adamg on Tue, 10/07/2008 - 9:49pm
Think taxes on capital gains, CommonWealth Unbound explains:
... The downturn in the market is a nightmare for state budget officials who have become addicted to growing capital gains tax revenues. Between 2002 and 2006, according to MassINC research, capital gains tax revenues accounted for 54 percent of the state's growth in tax revenues. ...
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Comments
The Bailout is killing the Market
I have to ask, after the bailout and Barney Frank's centrality to it, after Patrick's vocal support, whether these people really want a good growing economy. Because fixing the national economy is going to take some new ideas, and the entire establishment, Obama, McCain, Hillary, Bush, the big press etc was for the bailout. The result was a doubly collapsing stock market.
Do the state Democrats really want a better economy? Through 2005-2006, gas prices went up from inflation. The reaction among state Democrats was well this will be great for wind power. There was a power grab and tax breaks for the people who owned "green" companies. I mean people will be hungry because of the price of food, but it's great because we hate SUVs?
Now the banks are hurting, and instead of fixing the dollar, there is another power grab and regulations and tax breaks written up at the demand of financial companies.
Do these politicians really want a better economy? Or do they just want to use these events for more power grabs?
The bailout is killing the market, because the bailout is not the first, and these bailouts are all deficit spending, deficit spending leading to more inflation, which was the problem in the first place! The bailout is killing the market because it's not solving the original problem!
It seems like lately
It seems like lately everything is bad. Good economy= high gas prices and high home prices the poor have jobs but no place to live. Bad economy= low gas prices and low home prices, the poor have no jobs so still have no place to live. Why cant we just have decent prices on this stuff with homes and oil/gas going for reasonable sums? Thats what I never got with the economy, myabe I just dont get it. A house in a community should only be selling for what a median of what people in that area can afford, IMO thats why this whole thing imploded. I dont know what the solution is, but I know thats the problem.
A house in a community
That doesn't make a single bit of sense.
Price is set by supply and demand. Supply does depend on existing homeowners in the area, but demand does not. So why on earth should the median of what people in the area can afford have anything to do what sales prices are, when the people doing the buying are virtually by definition not people in the area?
House Prices
It's impossible to forecast how certain prices are going to react to the changing value of the dollar. When you get inflation, the first things to go up are gas, food, and building materials, raw materials. So those people do well for a while. Everyone else sees their costs go up, and tries to cope, but eventually they can't so there is a recession. Then the house prices will fall, and car prices. You have to wait until labor becomes scarce enough for salaries to go back up, and then house prices will catch up to food etc.
This is basically what happened after the inflation of the 1970s. It took almost 30 years for people's real incomes to catch up to where they were in 1970. Of course then the dollar dropped to 10% of it's previous value, whereas now it's at about 50% of where it was in 2004.
What the duece?
Also, whats up with this 400K that was spent on AIG executives right after the government gave them 85 Billion. They celebrate in the tropics and spend 200K on hotel rooms? These a** wipes should go to jail.