Sunday, October 11, 2009

Boskin's Baaack!

"For so many decades California residents enjoyed a rising standard of living, and outstanding education system, and unprecedented upward mobility. ... While uncontrolled spending, excessive regulation and litgation have helped create a dismal business environment, the tax system is central to the state's economic woes. ... Ironically, California's progressive tax and spending policies now threaten the state's ability to fund everything from parks to prisons, education to health. The excess spending during booms is never entirely cut back during the busts. Instead, the state also raises taxes and borrows temporarily. ... While the two of us believe California needs to control and reform state spending, and then reduce as well as reform state taxes, we and the commission's other appointees were limited by the executive order creating the commission to changes on the tax side of the state budget that would neither raise nor lower the state's revenues on average over the business cycle", my emphasis, Michael Boskin & John Cogan (B&C) at the WSJ, 30 September 2009, link:

"No state's economy, with the exception of Michigan, has careened into a deeper ditch than California in this recession. The state now has the fourth-highest unemployment rate (12.2%), the third-highest rate of mortgage foreclosures, and for two years has had the biggest budget deficit in the history of the 50 states. ... The heart of the new plan is to broaden the tax base and slash tax rates on personal income, business and sales. ... Because about 70% of small businesses pay the personal California income tax, the commission found that California's high rate is driving enterprises to the likes of Nevada, Texas and Idaho", Editorial at the WSJ, 30 September 2009, link:

Brenda Walker has a 30 September 2009 post about California at Vdare, link: Way to go Brenda!

B&C are Stanford professors. So? We remember Boskin. He led 1996's infamous "Boskin Commission", my 5 October 2007 post: As Uncle Miltie taught us 40 years ago, government spending uses real resources. 2009's Boskin Commission is as fraudulent as 1996's. Without spending cuts, California will not balance its budget. Perhaps not then. B&C's article does not mention the "I word", immigration. Hmm. California can shuffle its economic Titanic's deck chairs ad infinitum, changing percentages on its tax forms will accomplish nothing. Have California residents no longer "a rising standard of living"? Compared to who? Oregonians or Mexicans? What happened to California's schools which in the 1950s and 1960s were the US's best? Is "the tax system central to the state's economic woes"? Tax "reform" is a scam. Cut spending. Why is California hopeless? California's gross state product (GSP) is $1.55 trillion; with 38.5 million residents, say $40,000 per capita. Mexico's per capita GDP is about $10,700. Which Mexicans come to the US? Mostly those from Southern Mexico. Mexico's per capita GSP varies from $22,000 to $4,000. Assuming illegal aliens come from Mexican states with per capita GSPs of about $7,000 and their productivity doubles in the US, as the US is "capital deeper", we have 14 million people producing $196 billion in California GSP 24.5 million producing $1.354 trillion or $55,300 per capita. If California's 14 million Hispanics even consume at 1/3 the rate of non-Hispanics, that's $12,400 per capita. There's more. If they produce $14,000 per capita, they likely earn say 67% of that or $9,400 per capita, $12,400 - $9,400 = $3,000; $3,000 x 14 million = $42 billion, the difference between Hispanic consumption in California and income. If the difference is half this estimate, its still $21 billion. This money comes from somewhere.

Tax rates, bah humbug. Absent spending cuts the proposed tax rate changes amount to nothing. The WSJ doesn't mention the "I word either".


Anonymous said...

We need more quantitatively based public policy discussions like this.

Most debate is driven by "feel good" headlines and this is what we get... bankrupt states and nation.

We have got some tough rows to hoe.

Brittanicus said...

The uncomplicated fact is that E-Verify WORKS! And it is up, running and operational, so that illegal foreign workers other than a few using counterfeit documents will be discovered and eliminated from the workplace. It’s easy to understand why the Special interest lobbyists want it dropped, because it has grown in popularity and more sincere Pro-American companies are using it? Another simple fact is that its—SUCCEEDING! It is now hurting the elusive Council of Foreign Relations agenda to destabilize American workers and substitute even more cut-rate labor. The CFR are not even a government agency, but a Quasi agency that is a kind of sinister think tank. For years they have been formatting their power to undo the poorly built border fence, wreck inspections at airports, so millions more can pour into American and steal jobs. Nor does matter to the illicit ACLU, a communist inspired group or business consortium's, who owe no loyalty to US workers? It is a case of drowning America in low wage recruits, who are not just working in the fields, but janitors, fast food, factories, warehouses and higher paying jobs then citizens and legal employees realize?. AMERICAN WORKERS MUST MAKE A STAND. Anybody who legally displays the E-Verify sign should get the customers dollars, those who don't comply should be absolutely BOYCOTTED. I go to El Pollo Loco, but not to McDonalds-because I haven't seen the E-Verify sign yet? Same I only try to buy AMERICAN? But that is even becoming more indefinable, because many parts of products are imported in from cheap labor countries, killing our own manufacturing base. WE ARE SELF-INFLICTING OUR OWN WOUNDS?

The same with not training our own workers and instead imported significantly more labor from other lands by the millions each year. Thus we cheat our own industries. We can beat this, by electing politicians who sign a--CONTRACT-- stating American workers come first? Not those just affirming an oath of office, since to many it's meaningless. These contracts can be published and shown to the public and the national media. We are cutting our own throats in so many ways, because many bona-fide US Americans don't bother to vote the political corruption--OUT OF OFFICE. Most of the lawmakers are out for gain, not truly there to protect the American poor, not protecting our vulnerable senior's, not even really protecting our military, if they even come home? With the health care reform as a major issue, then research you’re local, state of federal lawmaker and locate their screened interests in pharmaceutical companies, hospitals, insurance, billing companies or anything that exudes money? They are just coveting their own interests? THE AMERICAN PEOPLE HAVE THE ULTIMATE POWER, TO STOP THIS TRAVESTY OF OUR IMMIGRATION LAWS.

Brittanicus said...

The pit of Vipers led by Sen. Harry Reid and joined by Liberal Democrat leaders last week--KILLED--by a vote of 61 to 38 shot down Senator Vitters amendment of that would have withdrawn federal funds to--SANCTUARY CITIES AND STATES. It is more taxpayer money being stolen to support illegal families, gang members and other heinous criminals who broached our laws. The IRS is actually extracting the money you earn, to take it in April, to support Anchor families included with the 20 million to thirty million people that should be ejected from our nation. Homeland security run by Napolitano is in deep collusion with sleaze that is catered to in Washington. Perhaps--just perhaps if we used public funding for election Campaigns for the politicians, it would assist in removing the corruption in DC, severing the lobbyists. Speaker of the House is another problem, who runs her vineyards with illegal foreign workers in CALIFORNIA. But that is just scratching the surface of both parties as they are perpetually involved in running the country for the globalists.

Only if we stand together and demand E-Verify program, our uniformed police right to question and detain people of unauthorized immigration status 287 G? Hopefully next year Americans will see through the greed, in the Senate and house and start by--REMOVING--Sen. Harry Reid and Nancy Pelosi. Both have millions of illegal aliens living off taxpayers in California and Nevada. GO and investigate their immigration grading and every lawmaker at NUMBERSUSA website. Vote them out? WE MUST HAVE E-VERIFY AS A MANDATED LAW, SEN. HARRY REID SOLD US OUT TO THE HIGHEST BIDDER. CALL YOUR LEGISLATORS TODAY AT 202-224-3121 and give them an ULTIMATUM. Businesses that hire the millions of illegal aliens are bleeding us dry, because we pay for the health care and education and for hundreds of thousands in the prisons. Your tax dollars are paying for warm cells and California has the largest proportion of any state. MAKE ENTERING AMERICA A CLASS ONE FELONY, LIKE OTHER DEVELOPED COUNTRIES. EVEN MEXICO YOU ARE DRAGGED INTO ONE OF THOSE REPUGNANT PRISONS.

Now they want to push another BLANKET AMNESTY upon us. The Democrats have promised those already here a path to citizenship, that defies all logic. It means access to our health care reform instantly, totalization of social security with those from South of the border. It means sharing your retirement with the majority of foreign nationals who been sponging of Americans for decades. It means more welfare for the old, the indigent who will follow on, through chain migration. It means your living standards falling to that of third world existence. If Amnesty passes do you think for one minute that those without hope in other countries are—NOT--going to pour through our porous border? I'm getting old, but I fear for my son’s future, my family. I have my pensions, but where do you stand? Will you get a pension upon retirement? Our infrastructure has suffered, because we send our young people to fight foreign wars for special interests. For years those who supposedly embody us in Washington, have seriously neglected our road, rail, utilities and communications network. The special interests are the multi-national companies, who have no loyalty to America, the people or the US Constitution. Then there are the majority of our politicians, who have slowly succumbed to business handouts? The only thing they have any loyalty to, is filling their own bank accounts with campaign contributions and undisclosed lucrative gifts. DID AMERICA COME ALL THIS WAY TO SINK BELOW A LAYER OF GREED AND UNBELIEVABLE CORRUPTION IN WASHINGTON, SINCE THE TIME OF THE AMERICAN REVOLUTION?