In the comments on the earlier posting, Richard Bennett continues his amphetamine dissimulations....
Multiple errors and inconsistencies in this post. Here'a few that really stand out:Contrary to popular belief, the state fiscal crisis is not caused by state overspending. Rather, it is caused by structural problems in the states’ tax systems...
Structural problems=taxing the rich and middle class at excessive rates. When the business cycle swings, higher incomes swing more severely than moderate incomes, both upward and downward. Note that this has nothing to do with electricity contracts.
Richard, are you blind, deaf and stupid? A little less attack mentality would do you a world of good...
Hmmmm.
Notice who was against this plan: The very companies that were the cause of the whole mess to begin with.
The retailers were behind the power crisis? A moment ago it was the wholesalers and President Bush. Please get your story straight, then tell me how much of the $38B deficit was there on account of electricity prices in 2001. While the interest rates on the bonds may affect the interest rate on carrying the state deficit over to next year, they don't really have much to do with the deficit itself.
Math can be hard, but in the end, numbers are your friend, Mitch.
My reply (and, yes, this is getting tedious, yet sickly entertaining):
First, I didn't say that the other states' problems were caused by electricity contracts. I said other states were in trouble, which you said wasn't true. Faced with the facts are you prepared to acknowledge your error?
As for the structural issues, the long-term attack on taxation that started with Prop 13 in California has resulted in these problems. So, while we may disagree with the optimal structure of a tax system -- which we haven't even touched on, so it isn't relevant to the conversation at hand -- the issue is that in California the cumulative impact of the electricity crisis and following debacle and the mismanagement of domestic and foreign policy by the Bush Administration is the source of immediate problem, a deep decline in state tax revenues.
As for attack mentality, if you can't take it, don't dish it. I'm convinced you're mean-spirited, I was only asking about your vision, hearing and intelligence.
As for the wholesaler vs. retailers, let me clarify, the companies that received the bonds and that participated with the wholesalers in the market manipulations are, indeed, behind the electricity crisis. President Bush aggravated the California fiscal crisis by abbetting the market manipulations and creating a global climate of anti-Americanism that has severely impacted sales by California companies, along with the rest of the companies in the United States.
I can't believe you don't understand the impact of increased borrowing costs on the current budget deficity, since you claim to understand math. You're asking a purposefully misleading question, since the costs of the electricity crisis brought on by Wilson-era policies and Bush incompetence cannot be completely accounted for, as many of the costs are indirect, such as the lowered tax revenues received by the state because of the increased cost of goods produced during the blackout era (when energy costs soared, increasing the cost of finished goods) and the longer term costs of a world that mistrusts the U.S. administration -- especially in light of the global outpouring of support after 9./11; Bush squandered an extraordinary opportunity.
The cost of financing the deficit will account for approximately eight (8) percent of the deficit for the coming year and many years after. In addition to that, part of the deficit itself is due to direct costs of the sale of those bonds, which the state appears to have eaten to bail out the energy retailers -- that's why the state had to do the offering, so that it could absorb the cost, which appears to have been deferred into the current budget.
Likewise, the increased cost of doing business in California due to the state's overall economic condition raised the risk associated with investment in the state, reducing business expansion and limiting startup capital.
The list goes on and on, Richard, but you refuse to see the numbers. I'd suggest an accounting course, maybe you could take the time to study the offering of municipal bonds. It's a complex situation that you are over-simplifying for purely ideological reasons.
Posted by Mitch Ratcliffe at October 14, 2003 02:33 PM | TrackBackThis is hilarious:
As for the structural issues, the long-term attack on taxation that started with Prop 13 in California has resulted in these problems. So, while we may disagree with the optimal structure of a tax system -- which we haven't even touched on, so it isn't relevant to the conversation at hand -- the issue is that in California the cumulative impact of the electricity crisis and following debacle and the mismanagement of domestic and foreign policy by the Bush Administration is the source of immediate problem, a deep decline in state tax revenues.
In the first place, there hasn't been a decline in state tax revenues in California to speak of. There was a sharp rise in 2000, but after that things leveled off to the same regular rate of revenue growth as before. That's myth number one.
Second, I didn't say other states weren't in a bind - I said they're not nearly in the same kind of a bind as California, where 15% of the nation's population has incurred 51% of the nations state deficits.
Third, Californians are not under-taxed. Their state sales tax is higher than Washington's, their state income tax is higher than Oregon's, and the property taxes are comparable to most states. \
Fourth, the de-reg split wholesalers from retailers and capped retail prices on power. The retailers went backrupt when the couldn't pass costs on to consumers, and the legislature squelched the plan. To assert that the power crisis was the cause of the deflation of the Internet bubble, as you've done, is to engage in some very creative activity.
Why don't you try writing about something you actually understand?
Posted by: Richard Bennett at October 14, 2003 03:01 PM