#Economy & #Stocks Review - Cash Strapped States Will Target Its Citizens

E&S Review

Much of today's economic data, including officially collected and produced time series, is highly unreliable. Statisticians use well-documented techniques such as geometric smoothing, seasonal adjustments, substitution, double counting, and hedonic adjustments to modify economic outcomes dating back to the 1980s. Politicians and central bankers often leverage these techniques for political gain.

Data manipulated by these statistical methods are frequently revised without clear notification to the public, especially when administrations or public policies change.

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Cash Strapped States Will Target Its Citizens

Washington state is currently grappling with a significant budget shortfall projected between $10 billion and $12 billion over the next four years. This fiscal gap arises from a combination of factors, including declining revenue forecasts, rising costs to maintain state programs, and an increase in the number of people receiving state services.

In response, the Washington State Legislature recently approved a nearly $78 billion two-year budget aimed at addressing this shortfall. To fund this budget, lawmakers increased the capital gains tax, estate tax, and selected business taxes, while discarding proposals for a wealth tax and property tax cap lift.

Governor Jay Inslee had earlier proposed a new wealth tax targeting individuals with personal wealth over $100 million, aiming to generate $10.3 billion over four years. However, this proposal faced criticism and was ultimately not included in the final budget.

The budget also includes a 6-cent per gallon gas tax hike to fund transportation projects and a rent cap that limits annual increases, excluding buildings less than 12 years old. Additionally, lawmakers approved unemployment benefits for striking workers and measures to enhance oversight of private detention facilities.

Despite these measures, the state continues to face challenges, particularly in areas like wildfire prevention, where recommended drastic cuts in spending have raised concerns about public safety.

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Socialist and capitalist policies tend to last only as long as the money does.

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#Economy & #Stocks Review Death By Tariffs

E&S Review

Much of today's economic data, including officially collected and produced time series, is highly unreliable. Statisticians use well-documented techniques such as geometric smoothing, seasonal adjustments, substitution, double counting, and hedonic adjustments to modify economic outcomes dating back to the 1980s. Politicians and central bankers often leverage these techniques for political gain.

Data manipulated by these statistical methods are frequently revised without clear notification to the public, especially when administrations or public policies change.

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Death By Tariffs

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The majority is slowly convincing itself that Trump is playing a game of two-dimensional chess by threatening to impose tariffs on major trading partners. Be warned, groupthink is extremely dangerous to portfolios.

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Many States Headed Towards Bankruptcy

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Illinois, New Jersey, New York, California all facing huge budget holes that will likely increase taxes to egregious levels in a vain attempt to fill them. Residents with properties in these states should sell and rent or move before the panic to meet bond payments begin in 2017. States like New Jersey have already placed a constitutional amendment on the ballot in November that prioritizes state payments of $79 billion per year to the New Jersey Pension Fund over all other types of spending. This includes spending on education, healthcare, police and fire protection, environment, and welfare programs. This will not sit well with many in the private sector that pay the bulk of the taxes. Even more troublesome, total tax receipts will struggle to expand or may even contract dramatically as liquidation intensifies in 2017.

Headline: In Illinois, Some Push Bankruptcy As Solution To Troubled Public Budgets

Each year in Illinois, increasing pension obligations are consuming more of its taxpayers’ dollars, pushing cities and towns to cut core services and raise property taxes just to keep up with the payments, policy experts say.

It’s led a Republican lawmaker to float the idea of allowing municipalities and other agencies to declare bankruptcy. Rep. Ron Sandack even introduced a bill specific to allowing the financially troubled Chicago Public Schools system – whose teachers are preparing to strike – to use the bankruptcy system, but he has no plans to attempt to further it.

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