Economic Meltdown in Lousiana

[Cheerful Charlie]

https://www.washingtonpost.com/news...mic-disaster-louisianas-governor-left-behind/

BATON ROUGE, La. — Already, the state of Louisiana had gutted university spending and depleted its rainy day funds. It had cut 30,000 employees and furloughed others. It had slashed the number of child services staffers, including those devoted to foster family recruitment, and young abuse victims for the first time were spending nights at government offices.

And then, the state’s new governor, John Bel Edwards (D), came on TV and said the worst was yet to come.

Edwards, in a primetime address on Feb. 11, said he’d learned of “devastating facts” about the extent of the state’s budget shortfall and said that Louisiana was plunging into a “historic fiscal crisis.” For all the cuts of the previous years, the nation’s second-poorest state still needed nearly $3 billion — almost $650 per person — just to maintain its regular services over the next 16 months. Edwards then gave the state’s lawmakers three weeks to figure out a solution, a period that expires March 9, no clear answer in reach.

Louisiana now stands at the brink of economic disaster. Without sharp and painful tax increases in the coming weeks, the government will cease to offer many of its vital services, including education opportunities and certain programs for the needy. A few universities will shut down and declare bankruptcy. Graduations will be canceled. Students will lose scholarships. Select hospitals will close. Patients will lose funding for treatment of disabilities. Some reports of child abuse will go uninvestigated.

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Supply-side economics fails again!

 

[Axulus]

https://www.washingtonpost.com/news...mic-disaster-louisianas-governor-left-behind/

BATON ROUGE, La. — Already, the state of Louisiana had gutted university spending and depleted its rainy day funds. It had cut 30,000 employees and furloughed others. It had slashed the number of child services staffers, including those devoted to foster family recruitment, and young abuse victims for the first time were spending nights at government offices.

And then, the state’s new governor, John Bel Edwards (D), came on TV and said the worst was yet to come.

Edwards, in a primetime address on Feb. 11, said he’d learned of “devastating facts” about the extent of the state’s budget shortfall and said that Louisiana was plunging into a “historic fiscal crisis.” For all the cuts of the previous years, the nation’s second-poorest state still needed nearly $3 billion — almost $650 per person — just to maintain its regular services over the next 16 months. Edwards then gave the state’s lawmakers three weeks to figure out a solution, a period that expires March 9, no clear answer in reach.

Louisiana now stands at the brink of economic disaster. Without sharp and painful tax increases in the coming weeks, the government will cease to offer many of its vital services, including education opportunities and certain programs for the needy. A few universities will shut down and declare bankruptcy. Graduations will be canceled. Students will lose scholarships. Select hospitals will close. Patients will lose funding for treatment of disabilities. Some reports of child abuse will go uninvestigated.

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Supply-side economics fails again!

How is government spending beyond its means a supply side failure? There are 11 other states that collect fewer taxes per person than Louisiana. Why are they not facing the same disaster as Louisana?

 

[Sarpedon]

Because the previous incumbent cut taxes and hoped for a wave of growth, in accordance with supply side economics? Are you even paying attention? The same thing is happening in Kansas and Wisconsin. But of course, facts aren't important. Cutting taxes to rich people is important.

 

[Axulus]

Because the previous incumbent cut taxes and hoped for a wave of growth, in accordance with supply side economics? Are you even paying attention? The same thing is happening in Kansas and Wisconsin. But of course, facts aren't important. Cutting taxes to rich people is important.

How are the 11 other states collecting fewer taxes per person than Louisana able to get by? Texas collects fewer taxes per person, for example, yet somehow managed a surplus the last several years. Why is that?

 

[Nice Squirrel]

Because the previous incumbent cut taxes and hoped for a wave of growth, in accordance with supply side economics? Are you even paying attention? The same thing is happening in Kansas and Wisconsin. But of course, facts aren't important. Cutting taxes to rich people is important.

How are the 11 other states collecting fewer taxes per person than Louisana able to get by?

It depends on the degree. Kansas and Wisconsin are in trouble and are cutting services.

 

[Axulus]

Louisana spends well above the average per person in state and local government spending:

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=521

In fact, it looks like it used to be in the top 10.

Seems like they have more of a spending problem than anything. Other states with below average taxes don't seem to have the spending problem that Louisana has.

 

[Cheerful Charlie]

https://www.washingtonpost.com/news...mic-disaster-louisianas-governor-left-behind/

BATON ROUGE, La. — Already, the state of Louisiana had gutted university spending and depleted its rainy day funds. It had cut 30,000 employees and furloughed others. It had slashed the number of child services staffers, including those devoted to foster family recruitment, and young abuse victims for the first time were spending nights at government offices.

And then, the state’s new governor, John Bel Edwards (D), came on TV and said the worst was yet to come.

Edwards, in a primetime address on Feb. 11, said he’d learned of “devastating facts” about the extent of the state’s budget shortfall and said that Louisiana was plunging into a “historic fiscal crisis.” For all the cuts of the previous years, the nation’s second-poorest state still needed nearly $3 billion — almost $650 per person — just to maintain its regular services over the next 16 months. Edwards then gave the state’s lawmakers three weeks to figure out a solution, a period that expires March 9, no clear answer in reach.

Louisiana now stands at the brink of economic disaster. Without sharp and painful tax increases in the coming weeks, the government will cease to offer many of its vital services, including education opportunities and certain programs for the needy. A few universities will shut down and declare bankruptcy. Graduations will be canceled. Students will lose scholarships. Select hospitals will close. Patients will lose funding for treatment of disabilities. Some reports of child abuse will go uninvestigated.

------

Supply-side economics fails again!

How is government spending beyond its means a supply side failure? There are 11 other states that collect fewer taxes per person than Louisiana. Why are they not facing the same disaster as Louisana?

Huge tax cuts by Jindal and the GOP left Louisiana vulnerable to cuts in revenue by dropping oil prices. Jindal and crew did not bother to shore up finances as that developed.

 

[Axulus]

How is government spending beyond its means a supply side failure? There are 11 other states that collect fewer taxes per person than Louisiana. Why are they not facing the same disaster as Louisana?

Huge tax cuts by Jindal and the GOP left Louisiana vulnerable to cuts in revenue by dropping oil prices. Jindal and crew did not bother to shore up finances as that developed.

The problem seems to be that they did not cut back spending in tandem with the tax cuts. Their economic growth was below average in 2015 but not a disaster, suffering from the plunge in oil/gas prices. Seems more like a fiscal mismangement failure than any sort of supply side failure.

 

[Cheerful Charlie]

Because the previous incumbent cut taxes and hoped for a wave of growth, in accordance with supply side economics? Are you even paying attention? The same thing is happening in Kansas and Wisconsin. But of course, facts aren't important. Cutting taxes to rich people is important.

How are the 11 other states collecting fewer taxes per person than Louisana able to get by? Texas collects fewer taxes per person, for example, yet somehow managed a surplus the last several years. Why is that?

In Louisiana, there is a 4% sales tax. Here in Houston, we pay 8.125% sales tax. State wide, there is a 6.5% sales tax.

 

[Axulus]

How are the 11 other states collecting fewer taxes per person than Louisana able to get by? Texas collects fewer taxes per person, for example, yet somehow managed a surplus the last several years. Why is that?

In Lousiana, there is a 4% sales tax. Here in Houston, we pay 8.125% sales tax.

Louisana also has a 6% income tax on top of that while Texas does not.

 

[laughing dog]

https://www.washingtonpost.com/news...mic-disaster-louisianas-governor-left-behind/

BATON ROUGE, La. — Already, the state of Louisiana had gutted university spending and depleted its rainy day funds. It had cut 30,000 employees and furloughed others. It had slashed the number of child services staffers, including those devoted to foster family recruitment, and young abuse victims for the first time were spending nights at government offices.

And then, the state’s new governor, John Bel Edwards (D), came on TV and said the worst was yet to come.

Edwards, in a primetime address on Feb. 11, said he’d learned of “devastating facts” about the extent of the state’s budget shortfall and said that Louisiana was plunging into a “historic fiscal crisis.” For all the cuts of the previous years, the nation’s second-poorest state still needed nearly $3 billion — almost $650 per person — just to maintain its regular services over the next 16 months. Edwards then gave the state’s lawmakers three weeks to figure out a solution, a period that expires March 9, no clear answer in reach.

Louisiana now stands at the brink of economic disaster. Without sharp and painful tax increases in the coming weeks, the government will cease to offer many of its vital services, including education opportunities and certain programs for the needy. A few universities will shut down and declare bankruptcy. Graduations will be canceled. Students will lose scholarships. Select hospitals will close. Patients will lose funding for treatment of disabilities. Some reports of child abuse will go uninvestigated.

------

Supply-side economics fails again!

How is government spending beyond its means a supply side failure? There are 11 other states that collect fewer taxes per person than Louisiana. Why are they not facing the same disaster as Louisana?

FFS, taxes were cut in order to spur sufficient economic growth to cover spending. It didn't happen. Clearly that policy was a failure.

 

[Cheerful Charlie]

http://www.salon.com/2016/02/16/bob...a_discredited_right_wing_economics_yet_again/

Additionally, Jindal started throwing tax credits and cuts around almost from the minute he was sworn in. He pushed through the largest income tax cut in state history — $1.1 billion over five years — which he saw as a prelude to completely eliminating the state’s business and personal income taxes. Which, when the state was flush, must have not seemed insane, at least to Republicans who never think a tax cut under any circumstances is insane.

But like Jindal’s presidential campaign, the good times couldn’t last forever. The lingering effects of the 2008 financial crisis and recession, the end of much of the federal disaster spending from Katrina and Rita, and the worldwide drop in oil prices all helped to crater the state budget, which led to the current crisis.
In addition, Jindal had signed the ever-insane “Never ever, ever, EVER raise taxes under any circumstances” pledge, peddled by Grover Norquist and his organization, Americans for Tax Reform, that long ago became de rigueur for Republicans.

 

[Axulus]

http://www.salon.com/2016/02/16/bob...a_discredited_right_wing_economics_yet_again/

Additionally, Jindal started throwing tax credits and cuts around almost from the minute he was sworn in. He pushed through the largest income tax cut in state history — $1.1 billion over five years — which he saw as a prelude to completely eliminating the state’s business and personal income taxes. Which, when the state was flush, must have not seemed insane, at least to Republicans who never think a tax cut under any circumstances is insane.

But like Jindal’s presidential campaign, the good times couldn’t last forever. The lingering effects of the 2008 financial crisis and recession, the end of much of the federal disaster spending from Katrina and Rita, and the worldwide drop in oil prices all helped to crater the state budget, which led to the current crisis.
In addition, Jindal had signed the ever-insane “Never ever, ever, EVER raise taxes under any circumstances” pledge, peddled by Grover Norquist and his organization, Americans for Tax Reform, that long ago became de rigueur for Republicans.

That sounds a lot like Venezuela's fiscal policy: few taxes, reliance on oil revenue, and handing out lots of goodies (the state was in the top 10 spending per capita in 2013). Supply side policy that is not.

 

[Axulus]

How is government spending beyond its means a supply side failure? There are 11 other states that collect fewer taxes per person than Louisiana. Why are they not facing the same disaster as Louisana?

FFS, taxes were cut in order to spur sufficient economic growth to cover spending. It didn't happen. Clearly that policy was a failure.

Which supply side theory says a cut in taxes without cutting spending will accelerate economic growth even when there is a 60%+ plunge in oil and gas prices for an economy where this industry makes up a not insignificant portion of the overall economy. I must have missed that paper.

In fact, this could be said to be a failure of Keynesianism if anything. Given the shoddy standards of evidence used in this thread, at least.

 

[laughing dog]

http://www.salon.com/2016/02/16/bob...a_discredited_right_wing_economics_yet_again/

Additionally, Jindal started throwing tax credits and cuts around almost from the minute he was sworn in. He pushed through the largest income tax cut in state history — $1.1 billion over five years — which he saw as a prelude to completely eliminating the state’s business and personal income taxes. Which, when the state was flush, must have not seemed insane, at least to Republicans who never think a tax cut under any circumstances is insane.

But like Jindal’s presidential campaign, the good times couldn’t last forever. The lingering effects of the 2008 financial crisis and recession, the end of much of the federal disaster spending from Katrina and Rita, and the worldwide drop in oil prices all helped to crater the state budget, which led to the current crisis.
In addition, Jindal had signed the ever-insane “Never ever, ever, EVER raise taxes under any circumstances” pledge, peddled by Grover Norquist and his organization, Americans for Tax Reform, that long ago became de rigueur for Republicans.

That sounds a lot like Venezuela's fiscal policy: few taxes, reliance on oil revenue, and handing out lots of goodies (the state was in the top 10 spending per capita in 2013). Supply side policy that is not.

The corner stone of supply side economics is reducing taxes spurs economic growth. The state of Louisiana cut taxes to spur economic growth. You can blow all the smoke you want, but it cannot alter that basic reality.

Which supply side theory says a cut in taxes without cutting spending will accelerate economic growth even when there is a 60%+ plunge in oil and gas prices for an economy where this industry makes up a not insignificant portion of the overall economy.

Wow, you really are desperate. The problems started before the plunge.

BTW, you need to show that supply side economics requires cuts in gov't spending to go along with the tax cuts. I'll put on the popcorn while I wait.

 

[prideandfall]

The problem seems to be that they did not cut back spending in tandem with the tax cuts. Their economic growth was below average in 2015 but not a disaster, suffering from the plunge in oil/gas prices. Seems more like a fiscal mismangement failure than any sort of supply side failure.

do you even realize the irony of your statement is that the fiscal management in question was adhering strictly to supply-side economic concept, and that's why it failed?

if a state's budget is run based on a core principle, and then that state's budget has a total melt-down, it's ridiculous to say "oh, well, was a management problem" as an excuse to try and defend the economic theory that was being applied.

 

[Axulus]

That sounds a lot like Venezuela's fiscal policy: few taxes, reliance on oil revenue, and handing out lots of goodies (the state was in the top 10 spending per capita in 2013). Supply side policy that is not.

The corner stone of supply side economics is reducing taxes spurs economic growth. The state of Louisiana cut taxes to spur economic growth. You can blow all the smoke you want, but it cannot alter that basic reality.

False, the theory states that government spending crowds out private activity. Reduce the size of government and private activity will fill the gap and be more efficient than the government activity it replaced, thus increasing economic growth.

That did not happen in this scenario. What actually happened is the Keynesian policy of fiscal stimulus of cutting taxes with no impact on size of government.

 

[laughing dog]

False, the theory states that government spending crowds out private activity. Reduce the size of government and private activity will fill the gap and be more efficient than the government activity it replaced, thus increasing economic growth.

Not according to  Supply-side_economics or http://www.investopedia.com/articles/05/011805.asp or http://www.laffercenter.com/supply-side-economics/ or http://www.econlib.org/library/Enc/SupplySideEconomics.html. Sorry, but you grasping at straws.

That did not happen in this scenario. What actually happened is the Keynesian policy of fiscal stimulus of cutting taxes with no impact on size of government.

In other words, supply side economics.

 

[Horatio Parker]

That did not happen in this scenario. What actually happened is the Keynesian policy of fiscal stimulus of cutting taxes with no impact on size of government.

From the article:

It had cut 30,000 employees and furloughed others. It had slashed the number of child services staffers, including those devoted to foster family recruitment, and young abuse victims for the first time were spending nights at government offices.

[...]

Since the 2007-08 school year, Louisiana has cut funding for higher education by 44 percent, the sharpest pullback in the nation; Southern has seen its own funding cut 49 percent. During that time, the burden of supporting education has flipped: Whereas the state once provided 70 percent of the money to its schools, now the students support the bulk of the costs — in the form of higher tuition.

 

[Axulus]

From the article:

It had cut 30,000 employees and furloughed others. It had slashed the number of child services staffers, including those devoted to foster family recruitment, and young abuse victims for the first time were spending nights at government offices.

[...]

Since the 2007-08 school year, Louisiana has cut funding for higher education by 44 percent, the sharpest pullback in the nation; Southern has seen its own funding cut 49 percent. During that time, the burden of supporting education has flipped: Whereas the state once provided 70 percent of the money to its schools, now the students support the bulk of the costs — in the form of higher tuition.

And yet, in 2013, they were in the top 10 states in government spending per capita. That is reckless after those tax cuts were implemented.

Texas collects fewer taxes per person, also has a significant size oil and gas sector, and yet its fiscal situation is just fine.