The states are awaiting the fate of the fiscal cliff, too

posted at 2:41 pm on October 3, 2012 by Erika Johnsen

While the Obama administration has conspicuously failed to produce the levels of economic growth, job creation, (specifically, “green” jobs), deficit reduction, bureaucratic transparency, and etcetera that we were initially promised, there is at least one thing they haven’t failed to supply in spades. The grand effect of ObamaCare, Dodd-Frank, the EPA, and President Obama’s other power-tripping bureaucratic extensions still writing new rules and regulations on the regular is the massive imposition of uncertainty on the private sector. The more variables there are, in this case via taxes and red tape and compliance costs, the less likely people are to take the risks that create jobs and grow businesses both large and small. It’s no good preparing for the future when you’ve no idea what the future is going to hold.

Another big impediment to private-sector growth at the moment is the uncertainty of what the upcoming “fiscal cliff” is going to look like — Congress and the administration haven’t been able to quite figure that out yet, and they’re waiting until the lame-duck session to sort it all out. This eleventh-hour strategy isn’t just a problem for the private sector, however; as Defense Secretary Leon Panetta pointed out last week, the instability of the sequestration cuts’ fate means that he isn’t being afforded much time to plan how these are going to hit his department, which is kind of a big deal in terms of national security.

What’s more, Bloomberg reports, it looks like individual states are waiting to see how the fiscal cliff will affect them, which is producing a lot of uncertainty for local governments:

If Congress doesn’t agree on how to reduce the federal deficit, states may lose funding and jobs when $600 billion in automatic tax increases and spending cuts take effect in January, said Ganeriwala, 56, who will head the [National Association of State Treasurers] next year. That may further hinder progress for governments that cut jobs as tax revenue fell. The number of public positions in 2011 shrank by 1.3 percent, about 280,000 positions, according to data from the U.S. Department of Commerce. More than half those positions were from state and city administrations.

States already are confronting the “stupidity factor” of Congress’s waiting until the last minute to act, said Chipman Flowers Jr., the Delaware treasurer. …

Besides the potential impact of federal deficit reduction and uncertain prospects for economic growth, states face increasing costs for items such as infrastructure and health care, Urahn said.

I’m all about reining in the federal budget, reducing the avenues of federal-state entanglement, and increasing state sovereignty, but this relentless game of fiscal chicken isn’t doing anybody any favors. Why should the federal government getting itself into such a pickle have to implicate the state governments so deeply, too? And heck, while we’re on the subject, I’m never one to miss an opportunity to argue for more federalism, and less federal government — I guess it could just be some big cosmic coincidence that red states are lately tending to fare better than blue states in terms of both income growth and unemployment, right? Somebody remind me why Democrats are so convinced hiking taxes will lead to economic growth, again?


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I’m in CA…

… to late.

Seven Percent Solution on October 3, 2012 at 2:43 PM

It’s no good preparing for the future when you’ve no idea what the future is going to hold.

A good reason for Romney to be specific.

astonerii on October 3, 2012 at 2:44 PM

Except here in CA…..we’re fine / :(

NapaConservative on October 3, 2012 at 2:45 PM

… to late.

Seven Percent Solution on October 3, 2012 at 2:43 PM

Never too late, it is not like they built a fence. Just be sure to get out before the road blocks go up in the mountain passes!

astonerii on October 3, 2012 at 2:45 PM

Montana is asking all it’s residents to have at least 10 firearms and they’re fencing off the state from the rest of the union in preparation.

darwin on October 3, 2012 at 2:50 PM

Somebody remind me why Democrats are so convinced hiking taxes will lead to economic growth, again?

The beatings will continue until morale improves.

rbj on October 3, 2012 at 2:50 PM

California is leading the way in getting a running start for its leap off the fiscal cliff.

The task force estimated that the burden of debt totaled at least $167 billion and as much as $335 billion. Its members warned that the off-the-books debts tended to grow over time, so that even if Mr. Brown should succeed in pushing through his tax increase, gaining an additional $50 billion over the next seven years, the wall of debt would still be there, casting its shadow over the state.

http://www.nytimes.com/2012/09/21/us/california-debt-higher-than-earlier-estimates.html?_r=0

wren on October 3, 2012 at 2:52 PM

Another big impediment to private-sector growth at the moment is the uncertainty of what the upcoming “fiscal cliff” is going to look like

Picture South Central LA, after the Rodney King cop acquittals … picture New Orleans, immediately before/after Katrina.

That’s what the “fiscal cliff” is going to look like. Looting, burning, rioting and paleolithic primates still demanding handouts from a destitute and ten-times-over bankrupt government.

OhEssYouCowboys on October 3, 2012 at 2:53 PM

A good reason for Romney to be specific.

astonerii on October 3, 2012 at 2:44 PM

That would be helpful, but for me, just the fact that he’s not 0bama puts him at a huge advantage.

UltimateBob on October 3, 2012 at 2:54 PM

You just gotta love how the union goons running the blue states into the ground refer to themselves as “Working Families”…
LOL
So, the “Non-Working Families” that pay all the taxes that fund the union goon “Working Families” pay and benefits, they don’t seem to exist to the commies… LOL

Strike Hornet on October 3, 2012 at 2:57 PM

Picture South Central LA, after the Rodney King cop acquittals … picture New Orleans, immediately before/after Katrina.

OhEssYouCowboys on October 3, 2012 at 2:53 PM

This is why I’ve spent the last 4 years or so investing in “precious metals” (brass, lead, etc).

UltimateBob on October 3, 2012 at 2:57 PM

This is why states were originally the ones that sent representatives to the national Senate.

If states suckle at the federal teet then this is what happens.

gwelf on October 3, 2012 at 2:59 PM

Barack must be dreading the awful economic situation the next President will inherit. Worse than the last.

Speakup on October 3, 2012 at 2:59 PM

I’m in CA… go ahead and cut the money off… Less of a chance for the DEMOCRATS IN CHARGE OF SACRAMENTO to be able to waste it…

Khun Joe on October 3, 2012 at 2:59 PM

It makes no matter, they will leave their liberal states and run to a conservative one and still vote Dem. never having an ‘ah-ha’ moment as to what caused their state’s demise. There is a reason they are called libiots.

hillsoftx on October 3, 2012 at 3:01 PM

All here on HA(that are conservative) that live in that gosh horrible CA, you and those of like mind are welcome to TX! We are going a good job dealing with the feds with our elected helping us out!

I am giving my opinion, but I feel others here would agree with me?
L

letget on October 3, 2012 at 3:02 PM

OT- Thanks Joe

MontanaMmmm on October 3, 2012 at 3:04 PM

Hey other states, we’re selling off prisons in Illinois for less than cost. Beat that! Too bad we can’t just disengage from Chicago. That would help a little.

Fallon on October 3, 2012 at 3:07 PM

For heavens sake, the solution is so simple – Just Tax The Rich.

If that doesn’t work…Bush Made Me Do It. ///

NapaConservative on October 3, 2012 at 3:11 PM

Why should the federal government getting itself into such a pickle have to implicate the state governments so deeply, too?

Live by debt, die by debt.

In this case debt generated by Federal obligations to states.

Keith_Indy on October 3, 2012 at 3:11 PM

Those clowns in DC are not going to pull us back from the “fiscal clift”
They will just build a catwalk that extends further out over the clift.

The band-aid they come up with will be the biggest boondoggle we have ever seen.

Jabberwock on October 3, 2012 at 3:12 PM

California native and stick a fork in us, we are done.

As far as Obama’s second term economic plan:
1. Raise taxes.
2. Increase government spending.
3. Hope hyper-inflation kicks in.

See, Stimulus I, Stimulus II, and son of Stimulus didn’t work because he DID NOT raise taxes. Clinton raised taxes and boom peace dividend, 94 GOP sweep, and the dotcom bubble come along and produce the late 90s. So clearly it was the raising taxes thing that did it.

jukin3 on October 3, 2012 at 3:14 PM

It’s no good preparing for the future when you’ve no idea what the future is going to hold.

I don’t agree with this statement. The future IS uncertainty, but there’s a difference between investment uncertainty and regulatory uncertainty. You can do research and understand investment uncertainty, but regulatory uncertainty is like randomly changing the rules of a game in the middle of play.

Imagine playing a match of chess and suddenly the rules require one side to use hamburgers instead of pawns, and they can move anywhere on the board. Imagine the frustration of play THAT game. Most wouldn’t even try.

Meric1837 on October 3, 2012 at 3:14 PM

This is why I’ve spent the last 4 years or so investing in “precious metals” (brass, lead, etc).

UltimateBob on October 3, 2012 at 2:57 PM

That will take care of one problem; but the other problem will be the Weimar Republic redux, where our wheelbarrows full of worthless money might be able to buy a loaf of bread.

OhEssYouCowboys on October 3, 2012 at 3:15 PM

Hey other states, we’re selling off prisons in Illinois for less than cost. Beat that! Too bad we can’t just disengage from Chicago. That would help a little.

Fallon on October 3, 2012 at 3:07 PM

WTH ! How can Ill. have an empty prison ?
Here in NY we keep ‘em pretty full.

Jabberwock on October 3, 2012 at 3:17 PM

It ain’t just the federal g’ment that’s going over a cliff. We have the same liberal media represented by the only paper in town that refuses to report the fiscal condition of Houston. Th last three mayors have promised pensions that they have not funded and are including 8.5% returns on that unfunded promise.

Meanwhile the mayor and council are promoting another $410 bond sale that will be backed by property taxes if they go unsold. That amount should get our liberal lesbian mermaid enough to make it to the next election.

This town used to be one of the economic engines of our state. Now its the suburbs of Houston doing that around here.

DanMan on October 3, 2012 at 3:18 PM

The only reason there’s an impeding fiscal cliff at all is because we have a huge a-hole as a President who either doesn’t know how to or doesn’t care to lead. Did I mention he’s an a-hole.

/disgusted

Paul-Cincy on October 3, 2012 at 3:45 PM

Ed, if you’re reading this, “reigning” should be “reining.” The analogy is to bring an unruly horse under control, not to exercise dominion.

/grammarpetpeevethatmakesmecrazy

mrsknightley on October 3, 2012 at 3:49 PM

Except here in CA…..we’re fine / :(

NapaConservative on October 3, 2012 at 2:45 PM

Oh, come on, more than $500 BILLION in GULAG public employee unions’ liabilities AND COUNTING (in geometric proportion) is not that bad, is it? Bernanke can print that much in less than a week. OK, maybe 2 weeks.

riddick on October 3, 2012 at 3:54 PM

When democratics make the silly claim that they are for working families, the fast comeback has to be:

So you are not ‘for working singles’?
So you are not ‘for the unemployed’?
So you are not ‘for retired people’?

slickwillie2001 on October 3, 2012 at 3:58 PM

The States better start getting used to fending for themselves. The money from the Federal programs are trending down and if,God Forbid, Obama gets re-elected, they may get a bit, but with that money will come many more headaches that will make the money pointless! The over regulation choke hold will drop tax revenues every quarter and Bernanke’s printing press is going to go into overdrive to stem the impending crash. Hyper-Inflation is the future financial news the Obama Enemy media will have to figure out how to spin.
For those following,How to take on the Obama Enemy media: http://paratisiusa.blogspot.com/2012/09/an-open-letter-to-those-who-should-know.html?spref=tw

God Bless America!

paratisi on October 3, 2012 at 4:47 PM

…we’re all going to get food stamps and obama phones!

KOOLAID2 on October 3, 2012 at 5:26 PM

When democratics make the silly claim that they are for working families, the fast comeback has to be:

So you are not ‘for working singles’?
So you are not ‘for the unemployed’?
So you are not ‘for retired people’?

slickwillie2001 on October 3, 2012 at 3:58 PM

Don’t forget the poor “Policeman, Fireman, Teachers and Nurses” that will have to be fired (rather than take a pay-cut like the rest of us) if we don’t raise taxes on the “NON-UNION WORKING FAMILIES” (that pay all the taxes)…
AND, of course there’s “THE CHILDREN!!!!!!!1111!!!eLeVeNtY!!!!!111″
LOL
FAIR-SHARE…..LADY PARTZ……WOMENZIZ!!!!!1111

Strike Hornet on October 3, 2012 at 5:35 PM

Somebody remind me why Democrats are so convinced hiking taxes will lead to economic growth, again?

They can’t explain it, either. They’re sure it will work, though. If it doesn’t, it’ll be some republican’s fault.

trigon on October 3, 2012 at 5:52 PM

Oops, sorry Erika. For some reason I thought I saw Ed’s name on this.

mrsknightley on October 3, 2012 at 5:57 PM