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Paul Krugman is an Idiot: I have proof!!!

Submitted by Cahnman on Tue, 05/26/2009 - 00:10
in

Priceless line from Krugman's column today:

The seeds of California’s current crisis were planted more than 30 years ago, when voters overwhelmingly passed Proposition 13, a ballot measure that placed the state’s budget in a straitjacket. Property tax rates were capped, and homeowners were shielded from increases in their tax assessments even as the value of their homes rose.

...

Even more important, however, Proposition 13 made it extremely hard to raise taxes, even in emergencies: no state tax rate may be increased without a two-thirds majority in both houses of the State Legislature. And this provision has interacted disastrously with state political trends.

Riiiiiiight...the state with the highest income tax rate in the country has a massive budget problem because taxes aren't high enough.  It can't have anything to do with state spending.  Apparently, there's no problem government has that can't be solved with just a little bit more of our money.

I hope this helps.

That is all.

Cahnman out.

 

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Comments

They don't have to raise taxes

Submitted by Lonestar Bill on Tue, 05/26/2009 - 11:00.

Obama will be bailing them out. With our money.

The bad decisions and general lack of dicipline shown by California will be paid for by the rest of the states.

We can then add California to the list of growing U.S. "assets" including GM, Chrysler and AIG.

 

cali needs to change their constitution

Submitted by Maleficent on Tue, 05/26/2009 - 12:29.

but, in all fairness, they've just seen two bubbles go bust within ten years. I'd say at least some bailout money is justified (economists would say to use it on retraining people and keeping up consumer spending)

But how do you (Cali) miss by that much?

Submitted by Lonestar Bill on Tue, 05/26/2009 - 12:45.

They have a $24.3 billion deficit. Its 1/4 of their general fund.

Maybe this is good. Maybe its a wake up call. Change their constitution so they can tax even more? Good luck with that . . . it looks like taxpayers have had enough out there. They can't afford their own policies

when your entire economy

Submitted by Maleficent on Tue, 05/26/2009 - 13:24.

built on FIRE disappears... then you run massive deficits, until the people who are still using your services go away.

There is a significant lag time between "jobs go poof" and "people find new jobs". this is further exacerbated by loan terms.

I'm not saying that they should be that far off... far from it! But I am saying that there might be a compelling reason for the government to give SOME amount of bailout cash.

I've been predicting for a while now some riots in SoCal come the summer... they're stuck between two rocks and a hard place.

Krugman was talking about Property Tax

Submitted by skayne on Tue, 05/26/2009 - 14:12.

Income tax is ONE kind of tax rate, What do people in Cali pay in property taxes, which is the tax Paul Krugman was specifically talking about.

When talking about Californians' tax burden all taxes have to be taken into account. They might have a higher income tax burden but have a lower overall burden.

People in Cali want to have their cake and eat it too. They want all the public spending and refuse to pay for it.

Income tax is ONE kind of tax

Submitted by nathanial (not verified) on Wed, 07/22/2009 - 23:31.

Income tax is ONE kind of tax rate, What do people in Cali pay in property taxes, which is the tax Paul Krugman was specifically talking about.

When talking about Californians' tax burden all taxes have to be taken into account. They might have a higher income tax burden but have a lower overall burden.

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