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Friday, January 18, 2008

Crunching Moves Into High Gear

Having done the pieces, I now seek to align them....

The Rockefeller Institute published its third quarter 2007 state tax data. The summary is here. It looks like we moved into the cycle of reinforcing negatives between second quarter and early third quarter. It explains a lot, and it does compare pretty closely with what I already had.

I was surpised by just how crummy the state tax receipts really were. Inflation-adjusted, personal and corporate income plus sales taxes shrank in the third quarter. That normally will not happen until we are a little ways into a recession, because income taxes lag, i.e., are paid on previous income rather than current income.

FWIW, the inflation adjustment Rockefeller uses is the state and local government expenditures index, which is definitely closer to reality than CPI.

I am wondering about this so called stimulus. I've gotten those small refunds before and frankly think that most will be spent on paying either bills or taxes. I can't really see how this is going to help much.
Teri,it isn't about fixing the problem.It is about announcing a plan to "fix the problem". On national Tv,during PrimeTime. Our worst laws have come from quickly passing laws to "fix" problems,some of which never existed.Think of our "leaders" as deranged egomaniacs with the moral sense of a weasel in rut if you want a clear picture of how the USA works theses days.
Teri, yes. It's more of a bailout of credit card companies than a stimulus if it comes quickly.

Tom, at this point any economist who's not drunk or stoned really knows that the economy is sliding fast.
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