Paul Krugman: Apocalypse now

[RedEarth]

Everyone should be paying attention to the political/fiscal catastrophe now unfolding in California. Years of neglect, followed by economic disaster — and with all reasonable responses blocked by a fanatical, irrational minority.

This could be America next.

http://krugman.blogs.nytimes.com/2009/02/17/apocalypse-now/

[HiFructosePronSyrup]

1. Repent! The end is nigh!

Someone give Krugman a sandwich board and a corner to stand on.

[ThomWV]

4. Are you a more accomplished Economist than he?

I only ask because if you are then I want to hear your opinion, otherwise I'm listening to his.

[HiFructosePronSyrup]

5. That's what you call "argument from authority."

It's also a "non sequitor."

[TahitiNut]

10. Yeah... and is it less valid than the simian feces thrown in post #1??

I. Don't. Think. So. :shrug:

[HiFructosePronSyrup]

11. Jeez louise.

Who pissed in your kool-aid this morning?

[TahitiNut]

14. If you're looking for an alternative source of breakfast urine, I'm afraid I can't help you.

:shrug:

[Tesha]

24. As compared to your "Argument from Anonymity"? (NT)

[comrade snarky]

6. That's funny

Be sure to pass that along to the 20,000 state workers that got layoff notices today.

[madaboutharry]

2. Americans have to come to understand what the

rest of the world has already figured out: You can not run a country without tax money. End of story.

[SteelPenguin]

13. It's the stupid voodoo economics crap again

California is in trouble because they spend more money than they receive in revenue from taxes. The Republican line of lowering taxes will increase revenue is old tired and demonstrably proven to not work over the past 30 years. The fiscal solution is to raise taxes and/or reduce spending. Period.

Politically making the Republicans do this...I don't know. So many nationally are just completely so far gone about this that I don't know what anyone can do.

[Danascot]

22. Karma visits Cali

in return for giving us St. Ronnie

[goforit]

3. I agree to somepoint, but to increase property tax on over-priced homes at this

time in a disasterous economy could cause an immediate revolt.

[waiting for hope]

7. Mine went up almost 100% last year -

and of course that didn't mean squat when we refinanced.

[marketcrazy1]

8. lots of other taxes they can increase

look at new york.........

[HiFructosePronSyrup]

9. They can increase the taxes on millionaires.

Paul Krugman, for example.

[Donnachaidh]

16. still slinging feces

:eyes:

[HiFructosePronSyrup]

18. Do you like it?

I'm doing a Paul Krugman impersonation.

[rvablue]

19. They wouldn't have in CA .... and while I'm not advocating 100% increases (that's absurd!)

CA will continue to have huge fiscal crises with the referendum system and Prop. 13 left unreformed and intact.

[DBoon]

23. Allow them to go up at 75% of CPI increase

So at least revenue has a chance to balance increased costs

Or have a split roll where business property is taxed at a higher rate

and maybe allow local entities to raise taxes with less than a 2/3 affirmative vote

[Cleita]

15. Increased property taxes should be levied on homes with more than four bedrooms,

acreage not used for agriculture, second homes, homes from out-of-staters and those from foreign countries. This covers all who are pretty well off and should be paying extra taxes on their wealth because they have a larger foot print in our commons, water and electric usage, etc. I'm all for it. As far as the single family home, I would leave taxes low for those working class families with modest homes.In the case of the retired, I would freeze their property taxes at the dollar amount they were when they retired, if they have a modest family home. Rich people with mansions in Malibu and Marin County wouldn't be eligible. I would describe a modest family home as one with four bedrooms, or three bedrooms and a den on no more than a 1/4 acre lot and no more bathrooms than there are bedrooms. Improvements like mother-in-law quarters and swimming pools would be taxed additionally. This Jarvis Amendment debacle can be fixed.

Anyone who has driven the length and width of California, like I have, knows how many huge, over bloated properties there are that can be taxed that the very rich are only paying 1% taxes on. It's really a sin considering the rich use more of everything in the commons than the average working class person does. Also, in a vacation area like where I live, most of the vacation homes (second homes) go empty most of the year, while working families in the service industries are often working homeless or living in trailer parks and other substandard housing.

[DBoon]

20. of course you can raise property taxes

The way they are figured out if you own your property a long time you are paying very little. It's based on purchase price adjusted by 2% a year. There is no such thing as a re-appraisal in California. Property taxes have absolutely no relationship to current market values, at all.

If you bought before the prop 13 rollback of 1976 you are paying pennies in property tax. Imagine a home in an area where homes sell for $300,000 (even now). You paid $25,000 in 1970 - your taxes are on this $25,000 plus 2% a year.

Prop 13 isn't just for homeowners, either - commercial real estate had its taxes cut. One of the reason for draconian rent control laws in places like Santa Monica was the promise that a cut in landlord's taxes would result in lower rents. When no such thing happened, you had ballot initiatives establishing rent control.

Think of all the commercial property owners paying minimal taxes because of the low turnover. A split roll has been proposed to deal with this. Never got anywhere.

Prop 13 also makes raising ANY tax at the local level almost impossible. It resulted in local governments becoming dependent on state money.

Prop 13 was a "drown government in a bathtub" wolf dressed in "homeowner tax relief" sheep's clothing.

[Cleita]

21. You said.

Prop 13 isn't just for homeowners, either - commercial real estate had its taxes cut. One of the reason for draconian rent control laws in places like Santa Monica was the promise that a cut in landlord's taxes would result in lower rents. When no such thing happened, you had ballot initiatives establishing rent control.

I was one of those "people's Republic of Santa Monica" people who voted rent control in. Not only weren't the landlords not passing on the property tax savings but they were trying to triple rents according to the new property values because of the real estate boom due directly to Prop. 13. Many were trying to convert their buildings into condos, with prices few could afford who had been able to meet the rent, but not the down payment on their own apartments.

Although, I lived in Santa Monica for thirty years and my husband even longer, when he retired we could see the handwriting on the wall and knew that we could not afford to retire there as much as we wanted to. We saw all the rich people moving into the modest homes and apartments being turned into condos from Beverly Hills because they were being pushed from there by the uber rich.

[jaksavage]

12. Who is next?

California
Kansas
......
A year from now we will be realizing that there was another shoe and it dropped.
ie option A mortgages and interest only notes, rolling over in the next year.

Shrink your footprint, expect less and hang on.
Enjoy your spare time with family.
Plant a veggie garden, eat less meat, travel less, buy less.
It is not so bad. Half of us have been living this way our whole lives.

TURN OFF THE TV, and leave it off!

Change your paradigm.
It might not be as bad as you think.

[BeFree]

17. Heh

They don't call him the terminator for show. Its all too real.

He's finished off California. What's next? Succeed Obama? Bwahahaha!

[bertman]

25. Ah'll be bach!!

[bertman]

26. Ah'll be bach!!