The State And Local Crisis

The pandemic has caused so many problems for state and local governments…..the  biggest problem is yet to come.

The budgets and and revenues will be a insurmountable problem that needs a solution that will benefit everyone and crap on none.

US local and state governments are reopening the economy as the pandemic continues to spread, although mass testing for COVID-19 and contact tracing programs are absent. At the same time, new state and local budget projections for the coming fiscal year paint an even grimmer picture than what was expected at the beginning of the month.

The Center on Budget Policy and Priorities (CBPP) has reported a 25 percent decline in revenues for some states in April alone. The CBPP now predicts that US state budget shortfalls will reach $765 billion over the next three years due to the economic impact of the COVID-19 pandemic. The report points out the strong relationship between unemployment rates and shortfalls in state budgets, which are critical for providing health care, housing, education, infrastructure and social welfare programs.

According to CBPP, several states have already predicted major reductions in revenue for 2020, including Massachusetts ($4.5 billion, or 15 percent of the state budget); Michigan ($3.2 billion, or 13 percent); and Utah ($1.4 billion, or 18 percent). For the next two years, some states are projecting even steeper drops, such as California ($32 billion in 2021, or 21 percent of its state budget); New York state ($12 billion in 2021 and $16 billion in 2022, or 14 and 17 percent of its annual budget); and Colorado ($3.2 billion in 2021 and $4 billion in 2022, 24 and 17 percent of its annual budgets, respectively).

https://www.wsws.org/en/articles/2020/05/27/budg-m27.html

There is a solution that has been around for over 100 years…..it is called Land Value Tax….

Land Value Taxation is a method of raising public revenue by means of an annual charge on the rental value of land. If you do not want to read through this text, you can watch this ten minute video by Dominic Frisby.

The below advantages are  from http://www.landvaluetax.org/

  • A NATURAL SOURCE OF PUBLIC REVENUE. All land makes its full contribution to the Exchequer, allowing reductions in existing taxes on labour and enterprise.
  • A STRONGER ECONOMY. If we tax labour, buildings or machinery and plant, we discourage people from constructive and beneficial activities and penalise enterprise and efficiency. The reverse is the case with a tax on land values, which is payable regardless of whether or how well the land is actually used. It is a payment, based on current market value, for the exclusive occupation of a piece of land. In the longer term, this fundamentally new and different approach to revenue raising will stimulate new business and new employment, reducing the need for costly government welfare.
  • MARGINAL AREAS REVITALISED. Economic actitivities are handicapped by distance from the major centres of population. Conventional taxes such as VAT and those on transport fuels cause particular damage to the remoter areas of the country. Land Value Tax, by definition, bears lightly or not at all where land has little or no value, thereby stimulating economic activity away from the centre – it creates what are in effect tax havens exactly where they are most needed.
  • A MORE EFFICIENT LAND MARKET. The necessity to pay the tax obliges landowners to develop vacant and under-used land properly or to make way for others who will.
  • LESS URBAN SPRAWL. Land Value Taxation deters speculative land holding. Thus dilapidated inner-city areas are returned to good use, reducing the pressure for building on green-field sites.
  • LESS BUREAUCRACY. The complexities of Income Tax, Inheritance Tax, Capital Gains Tax and VAT are well known. By contrast, Land Value Tax is straightforward. Once the system has settled down, landholders will not be faced with complicated forms and demands for information. Revaluation will become relatively simple.
  • NO AVOIDANCE OR EVASION. Land cannot be hidden, removed to a tax haven or concealed in an electronic data system.
  • AN END TO BOOM-SLUMP CYCLES. Speculation in land value – frequently misrepresented and disguised as “property” or “asset” speculation – is the root cause of unsustainable booms which result periodically in damaging corrective slumps. Land Value Taxation, fully and properly applied, knocks the speculative element out of land pricing.
  • IMPOSSIBLE TO PASS ON IN HIGHER PRICES, LOWER WAGES OR HIGHER RENTS. Competition makes it impossible for a business producing goods on a valuable site to charge more per item than one producing similar goods on less valuable land – after all, producers and traders at different locations are paying different rents to landlords now, yet like goods generally sell for much the same price and employers pay their workers comparable wages. The tax cannot be passed on to a tenant who is already paying the full market rent.

I wrote about this here on GSFP……https://gulfsouthfreepress.wordpress.com/land-value-taxation/

This will be hard to convince the politicians of this….but as they struggle to balance the budgets this will be a good solution ….but will legal bribes prevent a solution?

I Read, I Write, You Know

“lego ergo scribo”

Covid-19 And Civil Rights

There have been many institutions in our society that have been altered by the Covid-19…..including our civil liberties. We have had a lot of back and forth about this virus but the one subject that has been a bit silent is that of civil liberties…..and now it comes to light on IST…….

Philosopher Bertrand Russell wrote, “Neither a man nor a crowd nor a nation can be trusted to act humanely or to think sanely under the influence of great fear.” The United States is now in the grip of such a fear. It is prostrating before authoritarians in government who have waited for such a moment and now relish in ordering us indoors.

In loudly applauding the authoritarian shutdown orders of American governments, many seem to be conflating at least a few separate sets of issues that relate to different areas of expertise.

The first area of expertise is the epidemiology of COVID-19. It entails questions of the virus’s contagiousness and deadliness. There are questions on which there are very significant disagreements (with important policy implications) and, importantly, very poor data.

https://thehill.com/opinion/civil-rights/491731-civil-liberties-under-attack-during-covid-19

This paper states that the biggest threat to our civil liberties during the pandemic is ICE….

The editorial board of the University of North Carolina-Chapel Hill’s student newspaper, The Daily Tar Heel, recently insisted in an editorial amid the coronavirus pandemic that “the biggest present threat to public safety” is ICE agents. The editorial board cited a request made by ICE for 45,000 N95 masks to protect themselves while continuing to enforce the U.S. borders during the coronavirus pandemic. The board cites Immigration and Customs Enforcement’s statement it will “continue daily enforcement operations to make criminal and civil arrests, prioritizing individuals who threaten our national security and public safety.” “We would argue that the biggest present threat to public safety would be ICE agents, not undocumented immigrants,” the board responded.

https://www.campusreform.org/?ID=14720

The secret police will be available when DC gets its spike of Covid-19 infestations…..did I say “secret police”? Yes I did.

District of Columbia Mayor Muriel Bowser yesterday ordered a one-month extension of the state of emergency, as cases in the region grow at a rapid pace. Federal officials in the nation’s capital expect a New York-like epidemic in the District, Maryland and Virginia, one that could potentially cripple the government. “No one wants to talk evacuation, especially when there’s nowhere to go,” says a senior military officer working on continuity of government planning; he requested anonymity because he is not authorized to speak on the record. But a little-known military task force charged with evacuating Washington has already been activated, a task force charged with the most sensitive government mission of “securing” Washington in the face of attackers, foreign and domestic—and if necessary, moving White House and other key government offices to alternate locations.

https://www.newsweek.com/exclusive-washington-dc-faces-coronavirus-spike-secret-military-task-force-prepares-secure-1498276

Other institutions are under attack….voting comes readily to mind….and I have the feeling it will not stop there.

Any thoughts?

Learn Stuff!

I Read, I Write, You Know

“lego ergo scribo”

Will This Lead To Social Dysfunction?

The pandemic is causing a lot of things to occur at one time….food shortages, supplies shortages,  confusion and hysteria….but how will all these pressures effect the country?

I recently got a piece by the Geopolitical Futures…and I would like to pass it on to my readers…..

A few weeks ago, I laid out a model for thinking about the coronavirus crisis. I argued that there were four structures operating: medical, economic, social and military, with the political structure attempting to coordinate all four while managing its own disorder. This is an American model, but it maps to other nations reasonably well.

To this point, the medical structure has defined the basic framework. Having no vaccine to prevent the virus, nor proven medications for alleviating symptoms (I stay out of the chloroquine debate, lacking any right to an opinion), the only medical option was a social one: social distancing. Put differently, where quarantines were meant to create barriers to those who were ill with a disease, this was extended to everyone. In its most extreme form, this meant shelter in place: Stay home with your family and don’t venture out. Even the more moderate forms, such as putting six feet between yourself and others, were fairly radical.

The medical solution created an economic crisis. Many cannot go to work. Shopping, eating out and other activities are limited. Unemployment soared, supply chains are strained, demand for goods and services has fallen. The political structure crafted strategies for mitigating the crisis, cushioning unemployment and preventing business failures with stimulus packages and so on. The amount of money committed is about 10 percent of U.S. gross national product, with the assurance that more will be committed. It is not clear that these economic events will cause economic failure, but it is clear that they will cause distortions in the economy on the order of the infusions. The economy will not function as it has before, and the distortion will not rapidly end.

The social consequences are perhaps even more profound. At its core, the social is the family. The functioning of the family assumed that children would go to school, one or both parents would go to work, and all would have periods of being alone, or being in other places with other people. On the broadest level, the social is our mingling with strangers, from going to the movies, to standing in line and chatting, to discussing the purchase of a computer with a salesman. There are a billion kinds of social interactions, and each has its rituals. We know how to find a seat in a movie, and how to excuse ourselves as we pass by those already seated. We know how to appear amiable and unthreatening when standing in line. We understand the rituals when buying a computer, the carefully crafted pretense of knowing what you are talking about.

Human beings mediate their relations with other people through rituals — sometimes called manners and sometimes having no name at all. We know the rituals in our home. We know what will make mom and dad sad, we know how to come to dinner, and we know when we may disappear into our rooms to chat online. When we look at social organization, the family, dysfunctional or robust, is the most intense experience we have, and that experience is filled with safety valves, ritualized opportunities to be free of the family. This may be school, work, parties, whatever.

If social distancing and the economic crisis will have a social impact, it will be sensed first in the most delicate seismograph humans have: the home. Nowhere are the stresses so intense and continuous, nowhere are the safety valves so essential and rigidly prescribed. So when the medical structure requires that families dramatically alter their behavior, and the economic system generates such fear and uncertainty, the pressures are first felt in the family. Outside the family the pressures can be diffused, but now the family is the only sphere there is, and it becomes the sum of all fears, a place whose releases have been closed down.

Human beings mediate their relations with other people through rituals — sometimes called manners and sometimes having no name at all. We know the rituals in our home. We know what will make mom and dad sad, we know how to come to dinner, and we know when we may disappear into our rooms to chat online. When we look at social organization, the family, dysfunctional or robust, is the most intense experience we have, and that experience is filled with safety valves, ritualized opportunities to be free of the family. This may be school, work, parties, whatever.

If social distancing and the economic crisis will have a social impact, it will be sensed first in the most delicate seismograph humans have: the home. Nowhere are the stresses so intense and continuous, nowhere are the safety valves so essential and rigidly prescribed. So when the medical structure requires that families dramatically alter their behavior, and the economic system generates such fear and uncertainty, the pressures are first felt in the family. Outside the family the pressures can be diffused, but now the family is the only sphere there is, and it becomes the sum of all fears, a place whose releases have been closed down.

Family violence, normally man against woman, secondarily either against children, is a constant reality. Individuals who are psychologically dysfunctional, and families that are fractured, cause a constant and predictable level of family violence. When violence surges globally, it is unlikely that the numbers are being cooked, and unlikely that the violence is coincidental. There are two forces at work. First, homes and apartments are frequently built with the expectation that a substantial amount of time will be spent outside. They are not designed for constant occupation by all. The pressure of 24-hour intimacy coupled with a situation that has no clear endpoint can create tension between even the most loving families. And many families are not particularly loving. These are the ones that explode first, most without violence, all with a high degree of rancor that can’t be escaped. In some cases both parents are home without work. The parents must finally face each other, along with their unruly children. The family explodes inside of walls from which there is no escape. Family violence is not the norm. It is simply the first statistically collectible indicator. Many or most families will accommodate with love. But some won’t.

When I look at the pressure on our essential rituals, I note that Dr. Anthony Fauci has said that no one should shake hands now or ever again. It is common for male friends to hug. In Europe, when I greet a woman, I know I must kiss near the cheek but not quite on it. I always forget how many times — whether one or both sides, or even three times — I must kiss in each country. When I was young, a date ended in a kiss. When I was older, it could, with luck, end in more.

Are all these rituals of our life, along with all other rituals of touching that I don’t at the moment remember, to be abolished along with the handshake? The job of the medical community is to protect our health and life. But health is not simply a matter of medicine. It is also a matter of enormously complex and individual rituals. Last week, Jews celebrated Passover, remembering how God freed them from slavery. On Sunday, Christians celebrated Easter. These are communal celebrations of families and congregants who speak, touch and hug.

We are in an enormously difficult position. We cannot accept the death of fellow human beings who might be saved. We also cannot readily live with the restraints required to minimize those deaths. And we must calculate the suffering and death caused by economic depressions — a very real event.

The obvious solution is medical — a medicine that will not require quarantine and will allow us to go back to work. Given the virulence of the virus, the problem is that even lifting the social distancing might allow a return of its spread. I suspect we could take a risk with a poorly proven drug more than we can endure the limited lives we lead. But that is a suspicion. The point is that family violence has surged and it has surged because of the measures we must take to prevent the spread of disease. The rise in family violence is real but not decisive. The other social breakdowns will happen as the economy fails and our lives become crippled. Then choices will have to be made. Perhaps Fauci and his colleagues will find a cure we can live with. I wish them all the best in their quest.

So with all that said….do you see a dysfunctioning of our society?

I Read, I Write, You Know

“lego ergo scribo”