The 2011 Economic Collapse

[Guest mn32768]

Arthur Laffer: Tax Hikes and the 2011 Economic Collapse - WSJ.com

On or about Jan. 1, 2011, federal, state and local tax rates are scheduled to rise quite sharply. ... Also, the prospect of rising prices, higher interest rates and more regulations next year will further entice demand and supply to be shifted from 2011 into 2010. In my view, this shift of income and demand is a major reason that the economy in 2010 has appeared as strong as it has. When we pass the tax boundary of Jan. 1, 2011, my best guess is that the train goes off the tracks and we get our worst nightmare of a severe "double dip" recession. ... The result will be a crash in tax receipts once the surge is past. If you thought deficits and unemployment have been bad lately, you ain't seen nothing yet.

Then again, things may change after November.

[Guest jackdm3]

Bernanke said yesterday that the doubledip was unlikely. Maybe, but this what you can expect from those that attempt to control the market. It's called the "PTT." The Plunge Protection Team. This is generally when they know otherwise but want the little investors to not panic-sell their holdings before the big boys get out first.

Within one day, the articles on Marketwatch (company that tracks $ news) have two conflicting reports:

Fed's Bernanke doesn't see double-dip recession The Fed - MarketWatch

But then shortly after, a simple statement:

"Chance of second recession dip on the rise"

Also. Did you notice that last year and before, you didn't see the amount of commercials on TV for selling you actual gold bullion? This is typical when the "Market Makers" think they may have pushed the price of gold to near its limit. Then the little guys go and buy gold bars to keep at home, while months later the value slowly drops.

Edited June 8, 2010 by jackdm3

[DMark]

.... Then again, things may change after November.

Won't matter, that new Congress won't be seated until after 1 Jan 2011. Up until that time I expect a massive push by the left-wing wacko's as they ram all of their extreme wishes & desires through. Queen Nancy will push it all forward before her time as Speaker is over and good old smiling Barry will sign it all into law before the next Congress is seated.

[aquaman67]

state and local tax rates are scheduled to rise quite sharply

Who's tax rates is he talking about?

Not mine...

State taxes aren't going up and my local taxes aren't either.

[creeky]

Won't matter, that new Congress won't be seated until after 1 Jan 2011. Up until that time I expect a massive push by the left-wing wacko's as they ram all of their extreme wishes & desires through. Queen Nancy will push it all forward before her time as Speaker is over and good old smiling Barry will sign it all into law before the next Congress is seated.

I agree.

I can't help but think they will be bitter after losing the House (and hopefully the senate) and will make a mad dash to push everything they can before the door closes. Including gun legislation.

Just seems like we will be in a tough spot for the next few years. It will take time to build back.

[LagerHead]

Bernanke said yesterday that the doubledip was unlikely. Maybe, but this what you can expect from those that attempt to control the market. It's called the "PTT." The Plunge Protection Team. This is generally when they know otherwise but want the little investors to not panic-sell their holdings before the big boys get out first.

Within one day, the articles on Marketwatch (company that tracks $ news) have two conflicting reports:

Fed's Bernanke doesn't see double-dip recession The Fed - MarketWatch

But then shortly after, a simple statement:

"Chance of second recession dip on the rise"

Also. Did you notice that last year and before, you didn't see the amount of commercials on TV for selling you actual gold bullion? This is typical when the "Market Makers" think they may have pushed the price of gold to near its limit. Then the little guys go and buy gold bars to keep at home, while months later the value slowly drops.

Anything coming from the organization responsible for the dollar losing 93% of its value since its inception is to be taken with a grain of salt, to say the very least.

[Guest HvyMtl]

Um. Wonder what he is looking at. I dont see the issue of raising taxes severely happening any time soon.

What I do see is the man made disaster in the Gulf wiping fishing, tourism, and oil industry jobs... I see the man made disaster in the gulf wiping out the real estate values of all those 20+ story condos in PCB and Destin. I see a severe impact on shipping, as one cannot ship through oil laden sea... I see this as a more likely push back into recession than some guy's idea of tax increases...

[Guest 6.8 AR]

Yeh, you can't prop up the economy with borrowed money and expect it to last forever

without paying it back. With all the reckless spending going on and the control that is

going to follow, I think there are a lot of people in this country in denial about what

happens next.

[oldogy]

Um. Wonder what he is looking at. I dont see the issue of raising taxes severely happening any time soon.

What I do see is the man made disaster in the Gulf wiping fishing, tourism, and oil industry jobs... I see the man made disaster in the gulf wiping out the real estate values of all those 20+ story condos in PCB and Destin. I see a severe impact on shipping, as one cannot ship through oil laden sea... I see this as a more likely push back into recession than some guy's idea of tax increases...

I believe the tax cuts that are to expire in 2011 is what the article is addressing. The bit of the OP is just part of the article. I read Laffer's full article somewhere. The link at the Op may go there.

oldogy

[Guest 6.8 AR]

Um. Wonder what he is looking at. I dont see the issue of raising taxes severely happening any time soon.

What I do see is the man made disaster in the Gulf wiping fishing, tourism, and oil industry jobs... I see the man made disaster in the gulf wiping out the real estate values of all those 20+ story condos in PCB and Destin. I see a severe impact on shipping, as one cannot ship through oil laden sea... I see this as a more likely push back into recession than some guy's idea of tax increases...

Everything you say is true. Add all that on top of what has been going on

everywhere else with our economy and the healthcare issue, and then look

at what is going on around the world, with idiot leaders looking like they are

wanting to wage war. We are in for rough times ahead.

But don't kid yourself about taxes going up. That's already in the making, at the least, with

the expiration of Bush's tax cuts, and probably others that were embedded in the healthcare

bill we don't know about(or at least I don't know). I do know there was a provision for 16000

IRS agents being hired. That's definitely a control issue and will cost the American taxpayer

twice; cost of filing going up and taxes going up to pay for more government.

Edited June 8, 2010 by 6.8 AR
add

[mikegideon]

I believe the tax cuts that are to expire in 2011 is what the article is addressing. The bit of the OP is just part of the article. I read Laffer's full article somewhere. The link at the Op may go there.

oldogy

I'm not familiar with this guy. Was he able to predict the first recession as well?

I have some doubt that they will let the tax cuts expire with a real sluggish economy. They'll probably bump the date. Of course, the WSJ will have their comments about that too.

[Guest 6.8 AR]

If Obama, Reid and Pelosi were sane, that's what should happen. I doubt they will bump anything back. It's not in their little red playbook.

Mike, they're trying to destroy the economy, not fix it. They have no interest in capitalism, except to mooch off of it. They just haven't figured out what will happen when it doesn't exist anymore. That's the big flaw in their communist theory that they keep trying to reinvent.

[mikegideon]

If Obama, Reid and Pelosi were sane, that's what should happen. I doubt they will bump anything back. It's not in their little red playbook.

Mike, they're trying to destroy the economy, not fix it. They have no interest in capitalism, except to mooch off of it. They just haven't figured out what will happen when it doesn't exist anymore. That's the big flaw in their communist theory that they keep trying to reinvent.

Who ever said Reid and Pelosi are sane? How can they destroy something that has already been destroyed? You know how close we came to total collapse

[Guest jimdigriz]

Then again, things may change after November.

I wouldn't put much hope in the Republicans. In any event, our course is already set, and the expiration of the tax cuts is not the only thing steering us toward disaster.

[Guest 6.8 AR]

Who ever said Reid and Pelosi are sane? How can they destroy something that has already been destroyed? You know how close we came to total collapse

Point taken:D But it isn't dead, yet. Just getting real close.

[Guest 6.8 AR]

I wouldn't put much hope in the Republicans. In any event, our course is already set, and the expiration of the tax cuts is not the only thing steering us toward disaster.

You may be right, but you should put your hope in someone, before the only hope is yourself, because when that happens, it's all over.

[Chief07]

Won't matter, that new Congress won't be seated until after 1 Jan 2011. Up until that time I expect a massive push by the left-wing wacko's as they ram all of their extreme wishes & desires through. Queen Nancy will push it all forward before her time as Speaker is over and good old smiling Barry will sign it all into law before the next Congress is seated.

I fear for our great country. These nuckle heads Marxisits got to go.

My wife and I are scared shi*less. Keep calling congress and tell them to

cut the crap. 2012 can't come soon enough.

[Guest HvyMtl]

LOL. Ok, it surprises me people believe the politicians can control the economy. Influence, yes, like coming into the President's office and saying,"We are in a recession." This impacts, but basically, politicians can only react, not really control...

Might as well control the weather, too.

Corporations have paid to get the rules changed, to as weak as they can and then exploit it. This is why several of the oil companies paid no taxes last year, and now look at the Gulf mess...

What will impact the economy is not a tax break, or raise, here in the USA. That is not a significant enough impact. What will throw us back are bigger things, like the failure of the European Union and its economy. Poor fools over there forgot a simple thing. When you incorporate a weak nation's economy and monetary system, the value of the currency drops to the level of the value of the weak nation's... The EU has forgotten this point, and now is set to fail. When they fail, it will take the new "World Economy" down with it...

Edited June 18, 2010 by HvyMtl

[Guest Lester Weevils]

LOL. Ok, it surprises me people believe the politicians can control the economy. Influence, yes, like coming into the President's office and saying,"We are in a recession." This impacts, but basically, politicians can only react, not really control...

Might as well control the weather, too.

I don't think it is especially possible that a government or president can actively improve an economy, but OTOH it seems a pretty easy trick for a president or government to ruin an economy.

The economy is a state-machine which depends on previous states and previous inputs as well as current state and current inputs. It is a black box with a very long-time-constant complicated impulse response, and the impulse response constantly mutates. Attempt at top-down control is sheer folly.

Negative feedback driven thru an unfortunate phase shift can become positive feedback, doing the exact opposite of what you expected the control to accomplish. Any time you try to control the system, you risk over-steer which can take years to show up in the output state.

Humans are resourceful enough to adapt winning strategies for about any set of rules. The deadly part is when you keep changing the rules, so that nobody can work out a winning strategy. Uncertainty is killing us.

No matter how dumb the rules of the game are, we are better off to try to leave the dern rules EXACTLY THE SAME for a long time, and try to convince people the rules really will not change, so they won't just sit on the sidelines waiting for things to shake out.