tag:blogger.com,1999:blog-9208928.post2220190247426048186..comments2024-03-28T14:03:55.912-04:00Comments on Start Making Sense: New frontiers in fiscal languageDaniel Shavirohttp://www.blogger.com/profile/14710628584922961682noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-9208928.post-25905428359550842152015-06-14T07:07:53.715-04:002015-06-14T07:07:53.715-04:00«Streipping away several layers of obfuscation thi...«Streipping away several layers of obfuscation this means:<br /><br />* Louisiana is printing $350m of newly issued Louisiana currency called ATCs (Assessment Tax Credits), and giving it to the university system.»<br /><br />Maybe this is the confluence of two different theories:<br /><br />* MMT (Modern Monetary Theory) which gives a chartalist definition of "money" as being tax credits: the government issues "money" so that taxpayers can pay taxes with that "money". Apparently issuing "money" in the form of tax-credits does not count as borrowing and that is vital in a balanced-budget state. The vulgar interpretation is that since the government can alway issue any amount of tax anticipation notes it wants, spending is never constrained by taxes, and that's all that matters.<br /><br />* Two-Santa "theory" by J Wannitski, as well described by B Bartlett: http://economix.blogs.nytimes.com/2012/03/20/the-origin-of-modern-republican-fiscal-policy/<br />«"Republican economics was then in truth a dismal science, explaining to the populace, parent-like, why the good things in life that they wanted were all too expensive."<br />Republicans didn’t immediately embrace the two-Santa theory, but began to after Ronald Reagan’s victory in 1980, when he ran mainly in favor of a big tax cut, with far less emphasis on deficit reduction.»<br /><br />B Jindal may be a classic borrow-and-spend conservative like R Reagan or GW Bush.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9208928.post-57736742757005748172015-06-14T06:50:18.408-04:002015-06-14T06:50:18.408-04:00«The legislation includes "an 'assessment...«The legislation includes "an 'assessment' of around $1,600, [ ... ] granted a tax credit [... ] against that assessment. The student's tax credit, in turn, would be transferred to the state Board of Regents, [ ... ] no one's current tax burden would go up or down a cent. [ ... ] no student's combined tax plus tuition bill changes by a cent.] [ ... ] an offset to [$350 billion of?] the new tax revenue that was raised this term»<br /><br />Streipping away several layers of obfuscation this means:<br /><br />* Louisiana is printing $350m of newly issued Louisiana currency called ATCs (Assessment Tax Credits), and giving it to the university system. <br /><br />The ATCs are in effect the same as Tax Anticipation Notes or drachmas or any other credit currency, and can exchanged 1-for-1 with dollars but only at the counter of the Louisiana tax office.<br /><br />Stripping away fewer layers of obfuscation:<br /><br />* Lousiana is issuing $350m of tax-revenue-backed "muni" bonds but calls them "tax credits".<br />* Louisiana is giving these bonds to the university system, by raising university fees by $350m and then donating the newly issued bonds to the university system students so they can pay the fee increase.<br />* Since the newly issued "muni" bonds are labeled instead as "tax credits", their donation to university system students counts technically as a tax cut, where it would not count as a tax cut if they were given directly to the university system.<br /><br />Overall since the $350m is raised via borrowing, yes it does not count as a tax increase, just more borrowing, except that it is disguised as something else. So Norquist's blessing is seems fair.<br /><br />So this suggests that Louisiana is a balanced-budget state, and indeed:<br /><br />http://www.statebudgetsolutions.org/state/detail/louisiana<br />«Louisiana is required to pass a "balanced budget."»<br /><br />Apparently issuing freshly minted tax-credits does not get accounted for as borrowing or new currency under Lousiana state accounting rules.<br /><br />So this shysterism is not designed to scam rules about what counts as tax, but to scam the rules about what counts as borrowing.<br /><br />A bit like the similar shenaningans by the UK conservative government that by tripling university fees, giving loans to students to pay them, and cutting university spending by the same amount, managed to post a significant budget cut.<br /><br />PS: it may also be the case that the university system fees are increased by $350m permanently, while the $350 bonds are only issued for a year or a few years. In general conservative politicians like very much replacing tax-funded state spending with "fees", because "fees" don't count as taxes, and are heavily regressive.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9208928.post-4061516890822907592015-06-14T05:58:12.879-04:002015-06-14T05:58:12.879-04:00«"tax increases" to pay for education sp...«"tax increases" to pay for education spending is Norquist-verboten under the no new taxes pledge»<br /><br />Oh please! You refer to Norquist as if he made and unmade the rules by himself.<br /><br />While he is influential on the details, the people who matter are the *voters*, that is the empowered citizens who actually vote.<br /><br />In the USA voters are the upper half by income of the population and they really dislike paying taxes that might conceivably also benefit those poorer than themselves.<br /><br />Norquist has explained in some interviews that all he does is express the will of the voters.<br /><br />www.enterstageright.com/archive/articles/0903/0903norquistinterview.htm<br />www.prospect.org/web/page.ww?section=root&name=ViewWeb&articleId=11699<br /><br />What Norquist does is simply proof that democracy still works in the USA: the voters get the policies that they want, thanks to intelligent, capable politicians like Norquist representing the sovereign will of the voters.<br /><br />If you disagree with those policies, blame the voters, not Norquist: he is just doing a good job of democratic representation.<br /><br />If the voters are happy with bad, mean, scammy policy, then it is the job of politicians to give that to them, or else it is not democracy.<br /><br />If you want to fix USA politics so that things like those you describe don't happen, don't try to fix the intelligent, capable politicians like Norquist that do a pretty good job of implementing democracy, try to fix the voters that they represent.<br /><br />Democracy also means that if voters are mean and corrupt, the policies they vote for will be mean and corrupt.<br />Anonymousnoreply@blogger.com