In the previous post, Goldy speculates about federal money flowing to the states as part of a broader spending package, and specifically about whether Gov. Chris Gregoire is headed to D.C. to advocate for such spending. The answer surely is: maybe!
At Political Buzz, Joe Turner wonders if we will see a return to revenue sharing, where the feds don’t put strings on things.
When I started covering Pierce County government in 1981, cities and counties were still getting no-strings-attached money from Uncle Sam. According to Wikipedia, revenue sharing existed from 1972 (the last bad recession) until 1987. It lost favor under President Reagan.
But it appears to be making a comeback, and Washington state workers no doubt will rejoice if it does. Basically, the federal government gives cities, counties and states money to pretty much what they please. That means Gov. Chris Gregoire and the Legislature could head off some of those layoffs that probably are in their future.
I watched Obama’s press conference this morning; there are not a lot of details yet. Basically the message seems to be “if it works, great, if it doesn’t work, it’s gone.” Another point seemed to be that spending at the state level is fine, but it has to be part of a national economic game plan.
So I’m expecting Obama’s team to come up with plans to get money out to the states, but not necessarily without strings. I’m just guessing, but increasing block grants might be another way to go. A short term aid package for states to cover existing shortfalls would make sense, however. There’s really no sense in heightening unemployment misery by ignoring what’s happening at the state and local level.
There’s a little bit of a clue about what might happen in this article from Stateline:
Obama didn’t specifically mention states or a dollar-figure in his remarks over the weekend or during his Nov. 24 press conference in which he unveiled his economic team, including New York Federal Reserve President Tim Geithner as treasury secretary. But before he was elected, Obama called for at least $25 billion in nonspecific state relief and another $25 billion to help states build and fix highways, roads, bridges, airports and rail systems.
Honestly, this is why we want smart, qualified people running the government, instead of anti-intellectual stink tank cretins and talk show hosts. It actually does matter, a lot, what happens next. A good plan might get us through the next few years with a lot of economic pain, but with recovery on the horizon. A bad plan, well, you know. It would be very bad.
We’re all free to raise questions and kick things around, as we should in a democracy, but we need as many good ideas we can get right now. There are still a few conservative voices out there warning about over-spending, and at least that’s a legitimate concern to raise if it’s done in a sincere fashion.
The consensus seems to be we simply must have a large stimulus package, though, and we’ll have to sort out how to pay for it both as we go and in the future.
One thing Obama seemed to be getting at this morning was that wasteful pork will really have to be axed this time. No more cheap talk. You can count on the noise machine to wail mightily if anyone starts pointing out the horrendous inefficiencies in the Defense Department, for example, but as Obama said this morning, every part of the federal budget must be examined.
If the Obama team can focus like a laser beam on getting the most “bang for their stimulus buck,” as they say they are doing, it should help. At this point I could care less if the good ideas come from progressives, moderates, conservatives or little green men from Mars.
“The Office of the President-Elect.”
Consisting of a Teleprompter.
Will he have Turkey or Chicken like his other thanksgivings??
LOL!!!!!
The ‘defense’ industry has relied upon this sort of ‘stimulus package’ for quite some time now — since the civil war — at least.
One of Lincoln’s greatest fears was that, in attempting to save the union,he would inadvertently create an oligarchic class that would proceed to destroy the Republic in much the same way the slavemasters had.
It’s not for nothing that someone whose life is spent working for a factory or corporation is featured a ‘wage slave’.
re 1: Shrub could always call a press conference and remind everyone of the odious truth that he is, after all, still the president.
I’m sure that he must have a brilliant and NEW idea for solving our problems — like more tax cuts for the rich.
I can only hope that Bush and Cheney have as relaxing a foreign vacation as Pinochet did in Spain after he left office.
@3
Trying reading for a change headless oops guess you can’t..
There are still a few conservative voices out there warning about over-spending, and at least that’s a legitimate concern to raise if it’s done in a sincere fashion.
There are quite a few voices out there – conservative and otherwise – warning about over-spending and spending wisely. It remains to be seen what the outcome of the spending binge will be.
You can count on the noise machine to wail mightily if anyone starts pointing out the horrendous inefficiencies in the Defense Department
These just aren’t inefficiencies. Defense spending is bloated with many tens of billions spent on programs that are not needed and that have more to do with inter-service rivalry and entrenched interests spread far and wide. It cuts across party lines (as John Murtha will attest). For fiscal 2009 this budget exceeds half a trillion dollars NOT including the wars in Iraq and Afghanistan. It far exceeds the military spending of any other country. What I would hope Obama will do – he did not make this a campaign issue because it’s political suicide – is work to reduce this budget considerably. That will be no easy task.
Unfortunately, in the present time, giving no-strings-attached grants to the states carries some pitfalls. There might be some question of whether some state governments might not use the money wisely or as Washington intended. Some might in fact intentially squander whatever they get, just to try to “prove” that government can’t do anything right.
Case in point #1: Think a bit of what Sarah Palin might to do with such largesse.
Case in point #2: What if Rossi had won here?
Is crony capitalism wasteful use of tax dollars? Not to the beneficiaries.
re 4: “Trying reading for a change headless oops guess you can’t..”
Try understanding what you are reading for a change.
This State Government is just like the Car companies. Their Unions are bankrupting them.
It is good for State Governemnt to cut back and get in a lean position for the future.
Gregoire should be negotiating an accross the board pay cust for state workers, or lay offs.
Going to Washington for a credit handout just puts off the problem which was overspending and over hiring.
Lean up Washington, it’s the only path which will assure a bright future.
If it’s good enough for the Automobile Companies to show us the plan, it should be good enough for State Government.
Gregoire was very successful at suing the tobacco companies. She should sue the Republican Party next. After all they caused the economic meltdown that caused the revenue shortfall.
The Federal Government should bypass clunky, unworkable state tax systems. They should directly tax the affluent Washingtonians who aren’t paying their fair share of local/state taxes. This could be done as a tack-on to their capital gains tax. Then give the money directly to the state. That way, Olympia would have enough revenue, our tax system would be fairer, and you won’t have to amend the state constitution. Also we need to raise the inheritance tax on newspaper owners and that also could be done by Congress on a revenue-sharing basis.
The key issue facing the Obama economists is how to recapitalize a post-leverage world?
The painful part of this stimulus and of the pork concept is that some pork may be good .. if it increases capital. For example, Alaska’s bridge to nowhere should actually INCREASE productivity in Juneau by opening up land around the airport to development.
Another priority may be retaining existing assets. For example, the US has a huge lead in several areas of research. IF we do not fund these areas we will lose that lead .. people will leave in a reverse brain drain and young folks will not do the work to replace older workers in these fields.
Unfortunately, a lot of what folks expect from a traditional stimulus package may not make sense this time … that is dumping dollars into jobs and job training.
Obama seems willing to print money even faster than Bush did.
Obama seems to think there is a bottomless pit of money….maybe there is, BUT there are horrible consequences with Obama continuing these Bush/Democrat Congress overspending policies.
Change…my ass!
Obama is also reneging on his tax-the-rich endless chatter.
I guess it’s ok when your guy does it…but same result.
How about just dropping the 10% penalty and rules on spending your IRA money, if only temporarily.
That one move could definately open up consumer spending again.
If an individual who has saved very hard and regular over their career gets laid off before the age of 59 1/2 and needs this money to exist, why the hell are we penalizing them 10% for spending their hard saved money.
@9 gs
Exactly whose salaries would you cut?
Saying cut off their heads is fine until you realize that a huge part of our state budget goes to people who are hard to cut … prison guards for example. Or would you like to let all the convicts out?
I do not know how bets to do this, but my idea would be to set up some real cuts AND some that demonstrate a committment not tyo waste funds …
1. LETS NOT HIRE A 6 MILLION DOLLAR FOOTBALL COACH!
2. LETS PUT ON EMERGENCY TOLLS ON ALL FREEWAYS.
3. LETS CLOSE THE BOTHELL AND TACOMA UW CAMPUSES.
4. LETS LAY OFF THE USELESS OFFICES OR AT LEAST VE SURE THEY NOT HAVE STAFF: Lt GUV owuld be a good start, the office of the super of education.
or we could just sell the San Juans to Canada?
New Idea …
Lets sell GW Bush!
How much would YOU pay to give this guy a broom up his arse? I’ll bet el QAEDA would buy him for a few billions!
15. SeattleJew spews:
I’ll take a stab at that one SJ……
EVERY STATE EMPLOYEE’s salary’s & benefits should be rolled back to 2000 salary/benefit levels. No exceptions.
State Workers should feel the same pain as the people they serve……….not actually profit during a time of deflation. Business owners are suffering, employees are losing jobs……why should ANY State Worker not expect to feel some impact???
Who is working for WHOM????????????
All four of Island County’s Property tax hikes were defeated in the last election.
So now they are finally realizing the mood of the people on these islands who have seen their property taxes, regulation and yes Island County Hiring balloon over the last four years.
Only now have they taken down their job postings, and only now are they laying off 17 people.
It is definately time to slow or decrease the growth in Governemnt.
Citizens will demand it.
@18 Let’s start cutting wasteful government spending by laying off Bush’s TWO TRILLION DOLLAR war. His presidential pension could go on the chopping block, too — he doesn’t need the money, and he sure as hell didn’t earn it.
Those who have the money and power will continue to take from everyone else unless people organize.It doesn’t matter if the takers are in the government or in the ‘private sector. They are mostly one and the same.
You can bitch about the government or you can bitch about abusive and powerful monopolies. They are both on the same team.
The game with conservatives is that the power structure tells them that if they work hard and keep their noses clean, they have a shot at being of the ruling class.
I think that Joe Kennedy probably had the clearest vision of how to get to the top. They did murder two of his sons anyway.
@ 12 SJ
.
I am having difficulty following you. You realize the Bridge to Nowhere was in Ketchikan AK? Far away from Juneau.
@ 13
Mr. C, you meant Bush/Republican overspending policies.
No need to thank me. I am just helping you out on the obvious. I do that for all the idiots I encounter.
@21 The only way you get to the top of our hereditary oligarchy is to already be there. If you don’t believe me, spend a lifetime working hard at the Seattle Times and then see who gets the front-office job — you or someone named Blethen.
What conservatives really want is to tax wages and not tax profits and capital gains, so those already at the top not only don’t need merit to get there, but don’t need merit to stay there.
How much you succeed under our system is directly related to what you own. And for conservatives, the idea is to make sure they’re the only ones who own, or alternatively, to control what other people own.
Mr. C, deficits are an essential tool for any governement when they are needed in an emergency. But when Bush and the Republican congress decided to take a budget surplus they inherited form Clinton and then waste it by stuffing OUR TREASURY into their corrupt friends pockets, it is no longer an essential tool. It is TREASON!
So STFU about Obama’s plans to rescue the USA from the treasonous policies of the corrupt traitors of the Bush Administration and Republican congress.
You don’t have the moral right to comment on anything except where you, and your fellow America hating wingnut friends should be imprisoned.
No, fuck that. you don’t have the moral right to say a damn thing on any subject.
http://www.lbloom.net/
@17. Mr. Cynical “State Workers should feel the same pain as the people they serve……….not actually profit during a time of deflation.”
Check out the above web site to see what state workers actually make. The owner of this site has lost interest in it because he found out that state workers don’t make as much as he thought.
For many years we went without any real pay raise, specially during the 1990’s when times where good. 2% or 3 % are not real raises since inflation was over 4%. And we didn’t get even those many of the years. The current governor gave us a 3% and then a 2% raise, hoopty do, big deal, didn’t even see it on our net pay check because of increases in our share of the retirement and other charges the state takes out of our checks above and beyond the taxes. State employees are double taxed, we pay the same taxes everybody else pays, then we are taxed by lesser pay raises and pay cuts (they happen all the time).
I work for the Washington Department of Fish and Wildlife in the fish hatchery division. We have a manager that is reponsible for several hatcheries, six in my area. He is paid $65,000/year. We have a supervisor responsible for two hatchies, paid $48,000/year, and I, a foreman, am responsible for one hatchery, paid $40,000 per year. Private industry pays much more. Les Schwab pays their managers who manage more than two shops over $200,000 per year, their shop managers are paid over $100,000 a year. Would you want to work for the state or private industry with that type of pay difference. I except working for the state because I like working with fish, even though I don’t get paid that much. It is called Economic Rent by economist. But I don’t like people like you who think we are over paid and should work for nothing!
The hatchery I work at also has many volunteers who are retired business people, Boeing retires, Microsoft retires, etc. and when they learn how much we actually make, they can’t believe how little it is. You, living in Montana, a right to work state, probably think it is a huge sum, but try living in King county with that type of pay.
Go ahead and cut employees, see how the highways look after a while, or police protection, or forest fire protection. Go ahead and cut fish hatcheries and see if there are any fish left. The WDFW tried to close Tokul Creek Hatchery in King county recently to save money. The two public hearings had over a hundred people, mostly business people, there to protest its closing. Hatcheries make money for the state. Each returning fish is worth over $350 each to the local economy and the state. Even Republican like state rep. Anderson spoke against closing the hatchery because of this. Yet, you and your ignorant, greedy, thoughtless thinking wants to cut this type of government spending, cut the pay of people who are making money for the state and the economy.
Yet at the same time, the cost of living keeps going up. My barber just raised his hair cut price from $20 to $22 per cut. That is over 9% raise, I wish I got that type of pay raise.
http://www.lbloom.net/
@17. Mr. Cynical “State Workers should feel the same pain as the people they serve……….not actually profit during a time of deflation.”
Check out the above web site to see what state workers actually make. The owner of this site has lost interest in it because he found out that state workers don’t make as much as he thought.
For many years we went without any real pay raise, specially during the 1990’s when times where good. 2% or 3 % are not real raises since inflation was over 4%. And we didn’t get even those many of the years. The current governor gave us a 3% and then a 2% raise, hoopty do, big deal, didn’t even see it on our net pay check because of increases in our share of the retirement and other charges the state takes out of our checks above and beyond the taxes. State employees are double taxed, we pay the same taxes everybody else pays, then we are taxed by lesser pay raises and pay cuts (they happen all the time).
I work for the Washington Department of Fish and Wildlife in the fish hatchery division. We have a manager that is reponsible for several hatcheries, six in my area. He is paid $65,000/year. We have a supervisor responsible for two hatchies, paid $48,000/year, and I, a foreman, am responsible for one hatchery, paid $40,000 per year. Private industry pays much more. Les Schwab pays their managers who manage more than two shops over $200,000 per year, their shop managers are paid over $100,000 a year. Would you want to work for the state or private industry with that type of pay difference. I except working for the state because I like working with fish, even though I don’t get paid that much. It is called Economic Rent by economist. But I don’t like people like you who think we are over paid and should work for nothing!
The hatchery I work at also has many volunteers who are retired business people, Boeing retires, Microsoft retires, etc. and when they learn how much we actually make, they can’t believe how little it is. You, living in Montana, a right to work state, probably think it is a huge sum, but try living in King county with that type of pay.
Go ahead and cut employees, see how the highways look after a while, or police protection, or forest fire protection. Go ahead and cut fish hatcheries and see if there are any fish left. The WDFW tried to close Tokul Creek Hatchery in King county recently to save money. The two public hearings had over a hundred people, mostly business people, there to protest its closing. Hatcheries make money for the state. Each returning fish is worth over $350 each to the local economy and the state. Even Republicans like state rep. Anderson spoke against closing the hatchery because of this. Yet, you and your ignorant, greedy, thoughtless thinking wants to cut this type of government spending, cut the pay of people who are making money for the state and the economy.
Yet at the same time, the cost of living keeps going up. My barber just raised his hair cut price from $20 to $22 per cut. That is over 9% raise, I wish I got that type of pay raise.
Good. I think this will help the economy recover.
You cannot help the poor,
by destroying the rich.
You cannot strengthen the weak,
by weakening the strong.
You cannot bring about prosperity,
by discouraging thrift.
You cannot lift the wage earner up,
by pulling the wage payer down.
You cannot further the brotherhood of man,
by inciting class hatred.
You cannot build character and courage,
by taking away man’s initiative and independence.
You cannot help man permanently, by doing for them what they could and should do for themselves.
Abraham Lincoln
“Basically, the federal government gives cities, counties and states money to pretty much what they please. That means Gov. Chris Gregoire and the Legislature could head off some of those layoffs that probably are in their future.”
That will do nothing to increase GDP of our state or any state. The stimulus should go into circulation by paying for infrastructure construction and other productive endeavors. Federal stimulus money to keep state workers employed will not accomplish as much growth in our economy.
Some layoffs at the state level, and replacing services by contracting out to the private sector, will provide a better boost for our economy.
For example: if the feds provide a bucket of money for highway construction, which provides a bigger impact to the state economy? (A) WSDOT hoards the money and uses state employees to do as much work as possible, or (B) WSDOT contracts the work out to the maximum extent?
Roger 23
You are aware that capital gains are not indexed against inflation when taxed? I’m interested in your take on that. Any stock you hold for a decade and then sell, you are paying taxes on ten years worth of inflation.
And excuse me but business profits are taxed at 35%, most rational people think that is “pretty high”. Then the dividends come out of what is left over after the 35% hit. That is why they are taxed lower than ordinary income. You, the stockholder, just paid 35% on your profits before you got your dividend.
I had hoped that the “politics of change” would include some facts before all the anti-business rhetoric started.
Zip @ 40: 35% taxes on profit is the maximum. Compare that with the maximum tax on worker’s wages, INCLUDING social security, medicare, and in some cases workman’s compensation premiums, which can total close to 50%. Note that the social secuirity, medicare, and workman’s compensation premiums are owed on GROSS EAREND INCOME, not just on profits.
Note also that the 35% maximum tax on businesses is the tax paid by businesses which actually do work to earn money. Compare that with the current 15% maximum capital-gains tax which investers earn if they simply hold onto their assets for a few months, rather than sell them right away. Those taxpayers, who do the LEAST amount of work for their money, receive an extraordinarily favorable tax benefit compared with that of other workers.
As for the affect of inflation on long-term capital gains, it’s impossible to seperate that out for tax purposes. That’s because capital gains are merely a function of the time value of money (and other forms of capital). Inflation erodes that time value, but in periods of deflation it exands it. Inflation is merely a business risk which the owner has to consider as part of their investment. A tax deduction for inflation would simply act as an insurance policy against losses created by inflation, an unwise and overt intrusion into that market which the government should avoid.
I think any capital gains over a set amount in a single tax year should be taxed the same as wages or corporate profits. Exceptions granted only for certain tax-deferred accounts or in limited circumstances when rolling the money back into a similar investment (say primary residence).
Furthermore I think we need a financial transactions tax. Put a 3% tax on all stock, bond, and commodities trades. The UK has something like this and it doesn’t seem to hurt their financial markets.
Oh and lastly bring back the estate tax. This tax should gradually ramp up until it equals the top tax rates at the higher levels. The Blethens don’t need a free ride from the taxpayers. The robber barons should be forced to either donate their ill-gotten gains to charity or have the living shit taxed out of them.
re 28: “You cannot help the poor,
by destroying the rich.”
So, making the rich pay their fair share would ‘destroy’ them? They benefit (due primarily to accident of birth) more from the good things this country offers, so it is simply fair, not destructive, to make them pay more in taxes — CAPITAL GAINS TAXES.
re 28: The Rush Limbaugh’s and Sean Hannity’s (even the treacly colmes’s)of this world make their millions as apologists for billionaires. But they are still only chump-change mouthpieces whose fortunes will never outlive them.
Do you understand at all why some (like Hugh Hefner) see far more merit in a book like The Great Gatsby than in a smarmy potboiler like Atlas Shrugged?