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States faced with three brutal options in 2010: inflation, high taxation or default.
www.leap2020.eu ^ | 16 Novembre 2009 | Lundi

Posted on 11/22/2009 10:55:23 AM PST by Fyscat

In 2010, as protectionism and the economic and social depression will gain momentum, a large number of States will be compelled to choose between three brutal options: inflation, high taxation or defaulting on their debt.

(Excerpt) Read more at leap2020.eu ...


TOPICS: Business/Economy; Education
KEYWORDS: bubbles; economicconditions; economy; inflation
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And this all started last year?
1 posted on 11/22/2009 10:55:26 AM PST by Fyscat
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To: Fyscat
States faced with three brutal options in 2010: inflation, high taxation or default.

No, there is a 4th option. Cut spending and taxation.

2 posted on 11/22/2009 10:56:44 AM PST by MNJohnnie (Demand Constitutionality)
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To: Fyscat

Default. It’s the in thing to do..


3 posted on 11/22/2009 10:57:12 AM PST by pieceofthepuzzle
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To: Fyscat

I dont know exactly when the road to hell started, but I have sold all my muni bond funds out of concern that defaults are coming.


4 posted on 11/22/2009 10:58:22 AM PST by freespirited (Liberals are only liberal about sex & drugs. Otherwise, they want to control your life. --DHorowitz)
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To: Fyscat
Stop funding illegals. Stop hiring so many state workers. Stop screwing the country.
5 posted on 11/22/2009 10:58:49 AM PST by JPG (Obama's plan for America...today, Labor Unions...tomorrow, Labor Camps.)
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To: MNJohnnie

Add an option in augmenting those two: sell off assets that are not being used. Even in Massachusetts there are significant federal properties that can and should be sold off.


6 posted on 11/22/2009 11:00:42 AM PST by MSF BU (++)
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To: MSF BU

“Add an option in augmenting those two: sell off assets that are not being used. Even in Massachusetts there are significant federal properties that can and should be sold off.”

Massachusetts is in the EU? I know they’d like to be, but....


7 posted on 11/22/2009 11:06:25 AM PST by Favor Center (Targets Up! Hold hard and favor center!)
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To: MSF BU
Add an option in augmenting those two: sell off assets that are not being used. Even in Massachusetts there are significant federal properties that can and should be sold off

That is brilliant! I wish I had thought of that. Will add it to the list

8 posted on 11/22/2009 11:06:29 AM PST by MNJohnnie (Demand Constitutionality)
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To: Favor Center

I think in this case the term “States” means “Nations”


9 posted on 11/22/2009 11:07:44 AM PST by MNJohnnie (Demand Constitutionality)
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To: Fyscat

Those options are pretty similar. 1.)Inflation is partial default that becomes total as it goes into hyperdrive. 2.)Radically higher taxation hogties the economy and results in reduced revenue to the government which leaves the other options which are both default. And 3.) Default is default.
Higher taxation, if further pursued when at first it does not produce the expected revenue could easily spawn a wealth tax which will throttle what is left of the economy and result in some sort of black market being the only economy.


10 posted on 11/22/2009 11:08:23 AM PST by arthurus ("If you don't believe in shoThe Problem is oting abortionists, don't shoot an abortionist." -Ann C.)
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To: MNJohnnie

“I think in this case the term “States” means “Nations””

Exactly.


11 posted on 11/22/2009 11:10:42 AM PST by Favor Center (Targets Up! Hold hard and favor center!)
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To: MSF BU
Opening up a NEW source of revenue will only explode he spending even farther beyơnd revenue. The only solution short of revolution is cutting government spending drastically, ending entitlements- all of them, like Medicare, Medicaid, Social Security, all subsidies and on and on.
12 posted on 11/22/2009 11:12:05 AM PST by arthurus ("If you don't believe in shooting abortionists, don't shoot an abortionist." -Ann C.)
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To: Fyscat
CUT SPENDING!
13 posted on 11/22/2009 11:12:21 AM PST by SolidWood (Sarah Palin: "Only dead fish go with the flow!")
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To: Fyscat

You forgot Congressional unfunded mandates that fall on State budgets.

In addition to state legislators who like to spend just like their federal cousins.


14 posted on 11/22/2009 11:15:34 AM PST by K-oneTexas (I'm not a judge and there ain't enough of me to be a jury. (Zell Miller, A National Party No More))
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To: MNJohnnie

Lower taxes and cut spending.

Are you drunk?

/s/


15 posted on 11/22/2009 11:17:51 AM PST by Carley (OBAMA IS A MALEVOLENT FORCE IN THE WORLD)
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To: Fyscat

Well, in my house we eat food like spaghetti or homemade pizza maybe 2 nights a week.

We no longer eat out very often. Maybe bi-monthly.

I no longer buy coffee at the corner convenience store, but make my own a savings of about $400 annually.

I no longer drink beer that costs $8 per six pack, but have switched over to Yuengling Lager in cans. A good brew. One sixer a week. This works out to $100 annually.

No more curbside trash pick-up, was $22 a month. I take to the dump myself at a savings of $16 each month. That gets me near $200 @ year.

I cut my son’s hair myself and have let him cut mine. We look fine, but nothing fancy. Adds up to about $300 @ year.

It is truly amazing where you may find savings when you look for them ~ or if you HAVE to because you are NOT spending someone else’s money.

If I ran my home the way these politicians run out country I would be broke, locked-up or both.

They are a disgrace!


16 posted on 11/22/2009 11:25:05 AM PST by incredulous joe ("Live Free or Fight")
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To: MNJohnnie

Exactly take America back through fiscal responsibility. Cut taxes, cut bullshit government debt that created the obamanaion problem, let business be business... especiall the backbone... small business.

Obama intentionally sought to exacerbate the problem

Flippin Sheik Ibn Hussein osamaObama and his hidden agendas.....actually N E F A R I O U S ideals.


17 posted on 11/22/2009 11:32:16 AM PST by himno hero
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To: Fyscat

I do not see the inflation option. States do not control monetary policy. How can a state inflate its debt? The states can pressure Congress for more funds so perhaps there is a case for indirectly causing inflation.

Raising taxes in most states has reached diminishing returns. Higher taxes will lead to less economic activity and less revenue, or at least much smaller increases than predicted (hoped for).

I look for a wave of foreclosures beginning with smaller cities and government units. The foreclosure wave will spread to major cities and even entire states. I am not sure about the impact of a default on a government unit. Will anyone buy bonds of the government unit? Will the government unit be saddled with much higher borrowing costs? Normally, I would expect this reaction from the investment communitiy. However, with the fed selling bonds at no interest, it seems that investors no longer care.


18 posted on 11/22/2009 11:44:26 AM PST by businessprofessor
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To: MNJohnnie

Yes, you are right.


19 posted on 11/22/2009 11:44:28 AM PST by autumnraine (You can't fix stupid, but you can vote it out!)
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To: Fyscat

Default would be most appealing to me. They would not be able to borrow after that but they shouldn’t be borrowing anyway.


20 posted on 11/22/2009 11:53:15 AM PST by Brilliant
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