Being anti-debt, I am hoping they pay back the school shift and any other piggy banks they raided before they start raising spending or cutting taxes again... Thoughts?
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The law says they have to replenish the reserve budget before they begin to pay back the debt to schools. Of course, laws can change. And it's important to note that ultimately the budget status will be based on the February forecast, not the one we just received.
Hiram
Hiram is right. I just wanted a chance to say that once. :-)
We already have heard that the February forecast is going to show us "short" by about $1.5 billion, coincidentally almost exactly the same amount as Gov. Dayton extorted from the Legislature as the price of ending HIS shutdown. And, as I understand it, the current surplus is a bit of accounting legerdemain, as it must be if the February numbers are as expected.
J. Ewing
Now where is that positive Christmas attitude ???
My affirmation of the day is that the economy is getting a bit better every day...
Let me know when the economy hits breakeven. I still have several close friends out of work. I have heard that the recovery might begin in early November. Wonder why?
J. Ewing
Which fields are they looking for jobs in?
I am curious if their jobs will ever return or if those jobs have been sent overseas by our Conservative Business Owners and Buy Cheap/Foreign Consumers?
Thankfully the company I work for is benefitting from global sales and therefore business is good. At least for now...
A very Conservative relative of mine was wondering how anyone can be unemployed with all those seasonal help wanted signs hanging all over???
J. Ewing,
You seem to be implying something:
"I have heard that the recovery might begin in early November. Wonder why?"
I am just not sure what it is. Are you talking next November as a result of the election? What new policies do you believe would usher in an improved economy? It is my understanding that the economy has been growing(at a slow rate) for some time now.
(if you choose to respond I find brevity more persuasive)
GDP Tracker
The GDP has been growing, but at too slow a rate to grow out of debt or create enough jobs for a growing population. There are actually FEWER jobs now than there were when Obama took office.
But next November the devil will be defeated, and stock markets rise when Republicans are projected as winning. (After that, it depends.) Businesses need to get the weight of government taxing, borrowing, regulation and the uncertainty of all of those things off their backs in order to invest, grow and employ more people. We will not do that under Democrats, and we're not too sure about the Republicans but them's the choices.
J. Ewing
Not sure who will win... Only time will tell.
As for faster GDP growth. I agree that the government policy is a factor, but I am not sure how much impact it has.
We are living with tax policy of Bush's era and yet we are still stymied. If huge tax increases had been passed, then I might see your point.
The reality is that it is easier for smaller economies to grow at a faster rate. For better or worse we are the biggest and therefore somewhat constrained. Hopefully they keep growing and buying more.
I long ago concluded that the single biggest factor in economic growth was a large store of available capital to fund it, followed closely by a favorable business climate (low taxes and sensible regulation) making it desirable. The problem is that when government runs a deficit, they enter the capital markets and dry up the store of available capital. Every penny goes into US Treasuries and nothing is left for business expansion. Make that deficit big enough, and you build in a huge inflationary pressure which makes it hard to make a return on investment.
The other side of the problem was best explained by what I thought was the smartest thing President Reagan ever said, and which was barely noticed then or since. He said, roughly, "We are going to lower taxes substantially, and as long as I am President, that is where they are going to stay." In other words, it wasn't the level of taxation that mattered, but the certainty of the rate, allowing businesses to plan and invest.
J. Ewing
It seems to me there should always be capital for a good idea...
My rationale is that only people that want really low risk and low rewards will invest in the USA's debt. Whereas those who are less risk averse and want more gain invest elsewhere.
Just a reminder, USA's debt increased significantly under Reagan's watch. And he wasn't stuck paying for 2 wars that his predecessor had started. Wiki Debt
Not saying Obama is the answer, but you must admit that the decisions of 2000 - 2008 sure left an ongoing financial mess.
The government's financial mess of 2000-2006 was about 1/10 of what the Democrats and Obama have done. Compare a $160B deficit with a $1600B deficit; it's an order of magnitude worse. And having the federal government borrowing 40 cents of every dollar it spends is a recipe for disaster.
You said people who want low risk and low returns go into US treasuries (right now). That is correct. The problem is that the Federal Reserve is loaning money to member banks at 0%, and Treasuries are paying 2%, so what do banks do? They buy up these treasuries and take the 2% rather than loan money to some "risky" business, especially when Obama's regulatory, tax and health care uncertainties make the risk very high, for anybody.
Too bad the US cannot do what Germany did to solve their financial mess, coming out of the Weimar republic. The Bundesbank-- their federal reserve-- cannot create currency, and cannot buy government bonds except at market rates. So if government borrows very much, the rates go way up and everybody screams.
Your observations would be correct in normal times, but Obamanomics is so far removed from normal and workable we need some new rules. I suggest that Democrats not be allowed within 1500 feet of the White House, for starters.
J. Ewing
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