Posted: Tue Dec 27, 2005 12:17 am Post subject: Deficit? Isn't the USA filthy rich?
Ok we've all seen that site that counts the trillions of dollars in the red you Americans are in... but I was just watching an old Alex Jones program tonight that was talking about the Annual Financial Reports and apparently each state alone brings in hundreds of billions of surplus, adding up to like 30 trillion dollars yearly in uninvested profits. If this is true, it's no wonder that Alex Jones laughs at Peak Oil, because PO is a theory that scares only the lower and middle classes. Why is big government hiding this surplus? Why isn't big government acknowledging PO? Deep questions to be sure.
Posted: Tue Dec 27, 2005 1:12 am Post subject: Re: Deficit? Isn't the USA filthy rich?
wisegoat wrote:
Ok we've all seen that site that counts the trillions of dollars in the red you Americans are in... but I was just watching an old Alex Jones program tonight that was talking about the Annual Financial Reports and apparently each state alone brings in hundreds of billions of surplus, adding up to like 30 trillion dollars yearly in uninvested profits. If this is true, it's no wonder that Alex Jones laughs at Peak Oil, because PO is a theory that scares only the lower and middle classes. Why is big government hiding this surplus? Why isn't big government acknowledging PO? Deep questions to be sure.
Hmm. I am I wrong in thinking than annual USA GDP is about $11 trillion?
Posted: Tue Dec 27, 2005 2:14 am Post subject: Re: Deficit? Isn't the USA filthy rich?
The states are required to have balanced budgets. Unlike the federal government, they cannot run a deficit. So most states carry some spare cash as a sort of rainy day fund.
A lot of states are currently running surpluses, because they get their money from property taxes, and the housing market, as we all know, has been hot. The economy also improved a bit, helping with sales taxes.
But these surpluses can be deceiving. If the economy or the housing market sours, so will state revenues. And many states are carrying a lot of debt, in the form of bonds.
Joined: Jul 21, 2004 Posts: 1248 Location: Suburban tar sands
Posted: Tue Dec 27, 2005 2:33 am Post subject: Re: Deficit? Isn't the USA filthy rich?
Leanan wrote:
The states are required to have balanced budgets. Unlike the federal government, they cannot run a deficit. So most states carry some spare cash as a sort of rainy day fund.
A lot of states are currently running surpluses, because they get their money from property taxes, and the housing market, as we all know, has been hot. The economy also improved a bit, helping with sales taxes.
But these surpluses can be deceiving. If the economy or the housing market sours, so will state revenues. And many states are carrying a lot of debt, in the form of bonds.
??? If they can't run a deficit, how do they end up carrying a debt?
Posted: Tue Dec 27, 2005 7:08 am Post subject: Re: Deficit? Isn't the USA filthy rich?
Alex Jones is just wrong about the surplus. It does not exist. Most state governments are running deficits as well. California and New York are practically bankrupt.
Posted: Tue Dec 27, 2005 7:37 am Post subject: Re: Deficit? Isn't the USA filthy rich?
Keith_McClary wrote:
??? If they can't run a deficit, how do they end up carrying a debt?
Through the joys of accounting. For highway construction (and state university buildings, etc), they can float bonds. These aren't qualified as a yearly spending deficit, but they are a debt.
In my state, (Kansas), the statewide public pension (includes state workers, teachers, many policemen, etc) is quite underfunded if it is to pay what is promised over the next 30 years. This annual underinvestment is, to me, equivalent to running a deficit.
Mind you, the state budget is only 5 billion (all of which, and more, is spent). It would take a long time to add up to "hundreds of billions" in surplus.
Posted: Tue Dec 27, 2005 8:15 am Post subject: Re: Deficit? Isn't the USA filthy rich?
lawnchair wrote:
Keith_McClary wrote:
??? If they can't run a deficit, how do they end up carrying a debt?
Through the joys of accounting. For highway construction (and state university buildings, etc), they can float bonds. These aren't qualified as a yearly spending deficit, but they are a debt.
In my state, (Kansas), the statewide public pension (includes state workers, teachers, many policemen, etc) is quite underfunded if it is to pay what is promised over the next 30 years. This annual underinvestment is, to me, equivalent to running a deficit.
Mind you, the state budget is only 5 billion (all of which, and more, is spent). It would take a long time to add up to "hundreds of billions" in surplus.
I call the above absolute b-s.
Hey, another Kansanite!
What part of Kansas? _________________ "Battle not with monsters, lest ye become a monster, and if you gaze into the
Abyss, the Abyss gazes also into you."
Ammo at a gunfight is like bubblegum in grade school: If you havent brought enough for everyone, you're in trouble
Posted: Tue Dec 27, 2005 8:50 am Post subject: Re: Deficit? Isn't the USA filthy rich?
Novus wrote:
Alex Jones is just wrong about the surplus. It does not exist. Most state governments are running deficits as well. California and New York are practically bankrupt.
I think what hes referring to is thier "comprehensive holdings" - The various governments have huge investments which they could theoretically liquidate to mee deficit budgets but they would much rather cry poor and threaten to cut programs unless taxes are raised.
-G _________________ All right, you primitive screw-heads, listen up!
Joined: Sep 16, 2004 Posts: 4280 Location: Southwest WI
Posted: Tue Dec 27, 2005 9:35 am Post subject: Re: Deficit? Isn't the USA filthy rich?
The only state that comes to mind with a "big" amt of surplus is Alaska with their Petroleum Fund...which is 20billion or so. I think WY also runs a nice surplus...
My state of WI and my sister MN are in debt/were in debt/will be in debt again! I know MN was somthing like 2 billion or so in the hole...which probably has to do with the very low property taxes in that state.
Posted: Tue Dec 27, 2005 10:30 am Post subject: Re: Deficit? Isn't the USA filthy rich?
Well his idea is that there does exist a huge surplus even in states that are nearly bankrupt.. They just don't want to advertise it because then the public would want to see it themselves... he claims that the surplus is so huge that they could have a taxfree America AND give every citizen thousands per year in payouts. But if everyone thinks we're in the red, they can justify taxes, and even more surplus... Apparently one thing they seem to do with this extra money is invest it in the stockmarket... Gee, I wonder if it's true that the government owns 70% of Xerox (one example he gave).. Cuz that's a frightening thought.. what good is a free market if the government owns and controls it all? If this is true, then we've (well, North Americans, i'm Canadian) been living in a successful communist state for quite awhile!
I believe most social programs do turn at least a small profit, at least a little more than enough to pay for the workers. If they didn't then that means they're unpopular, and thus why have the program in the first place? (Of course I believe in actual charities, but even those sometimes seem to be big money)
Posted: Tue Dec 27, 2005 11:12 am Post subject: Re: Deficit? Isn't the USA filthy rich?
Generally, all levels of US government units are cash poor.
If you were doing a balance sheet, many state and local governments
might show a considerable net worth, the difference between the
assets and liabilites.
The market value of "public goods" such as roads, parks and school buildings could possibly greatly exceed the debt. I doubt this would be
the case with the federal government, there are so many future benefits
promised by the feds that are greatly underfunded.
Posted: Tue Dec 27, 2005 11:29 am Post subject: Re: Deficit? Isn't the USA filthy rich?
Lawnchair is correct. States cannot run deficits like the feds do, but they can pass bond acts to raise money for big projects. This counts as debt, and must be paid back (plus interest). These are usually dedicated to specific projects - improving schools, building highways and bridges, building a sports stadium or commuter train line, say.
States really do have a huge surplus right now. Dunno if it's 30 billion, but it wouldn't surprise me. 30 billion is not a lot, spread over 50 states. There will likely be tax cuts offered next year, just in time for the election:
Posted: Tue Dec 27, 2005 11:52 am Post subject: Re: Deficit? Isn't the USA filthy rich?
Leanan wrote:
States really do have a huge surplus right now. Dunno if it's 30 billion, but it wouldn't surprise me. 30 billion is not a lot, spread over 50 states. There will likely be tax cuts offered next year, just in time for the election:
A few years ago our state supposedly had a huge surplus, and there was a contest between the Republocrats and the Demlicans to see who could cut taxes the most. The tax bill that passed was mostly aimed at those making $250K plus. We were told “Don’t worry we’re rolling in cash.” Two years later the state was broke and on the verge of laying off employees from office clerk to state troopers.
To make up for the now needed cash the state decides to push many services on to county and local governments forcing property tax increases. In our county we have seen property tax increases of over 100% in the last 2 years. Some places in the state have seen property tax increases of over 1000%.
Beware of these illusionary budget surpluses. Most states have pension obligations many times these supposed surpluses.
Posted: Tue Dec 27, 2005 1:00 pm Post subject: Re: Deficit? Isn't the USA filthy rich?
Novus wrote:
California and New York are practically bankrupt.
Did somebody say Kalifornia?
Yeah I can vouch for that. The Terminator inherited the state with the worst financial problems in the US. If California was an independant nation it would be seeking an IMF bailout loan right now....something that 3rd world countries usually do.
California is a weird state. It tends to have these massive economic swings. When the economy gets bad here it gets REALLY bad but when it gets good it gets REALLY good. However I think California has used up all of it's "get out of jail for free" cards. I just don't see how the state can make a strong comeback. In today's globalized world there isn't much that California can produce that can't be produced cheaper somewhere else.
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