Feed on
Posts
Comments

I guess economics is no longer about economics. Needless to say, I did not sign it. Need I remind my “colleagues” that raising taxes is exactly what FDR did during the Depression – largely negating any stimulative effect of spending. When my head stops spinning, perhaps I’ll respond line by line to this. The “Federal” government has an obligation to us as New Yorkers? Who the heck makes up the federal government? It is New Yorkers and non- New Yorkers. Now, New Yorkers got themselves into this mess, and we are asking ourselves to take care of it? No. We are asking richer states like Alabama and Kentucky and Alaska and Arizona and New Mexico and Utah to pay for our profilgate ways.Give me a break. Now we have some of the most esteemed economists in the world publicly advocating raising revenues from teetotalers to pay for a case of Natty Light for the neighborhood drunk.

I did NOT sign up for that man.

Dear Colleague,

We invite you to consider signing on to this letter to Governor Paterson, urging him to raise the New York State personal income tax in a progressive way as part of a more balanced approach to balancing the state budget. Please circulate this letter among your colleagues.

You may sign on by emailing your assent to economists@fiscalpolicy.org. The closing date for this letter is December 12.

If you have any questions, please contact James Parrott, Deputy Director and Chief Economist at the Fiscal Policy Institute, parrott@fiscalpolicy.org.

Sincerely,

William J. Baumol, New York University

Dimitri B. Papadimtriou, The Levy Economics Institute of Bard College

Ronald G. Ehrenberg, Cornell University

Jeff Madrick, The New School

Edward Wolff, New York University

James Parrott, Fiscal Policy Institute

(letter to Governor Paterson)

December 2008

Dear Governor Paterson:

New York State faces enormous challenges in closing a projected $12.5 billion gap in the 2009-2010 state budget. Wall Street is the epicenter of the global financial crisis and there likely will be no quick rebound from what could prove to be a severe recession.

We applaud the leadership you have shown in tackling the state’s budget crisis head on. We agree with you that the federal government has an obligation to New York and all the states in providing substantial fiscal relief to help state governments maintain essential public services during this crisis.

We are concerned, however, that steep state budget cuts will exacerbate the economic downturn and harm vulnerable low- and moderate-income New Yorkers. Constrained by a balanced budget imperative, states face only difficult choices in balancing their budgets during recessions. Economic theory and historical experience gives a clear and unambiguous answer: it is economically preferable to raise taxes on those with high incomes than to cut state expenditures.

The reasoning is straightforward: in a recession, you want to raise (or not decrease) the level of total spending-by households, businesses and government-in the economy. That keeps people employed and buying things, and makes it more likely that businesses will want to invest to serve that consumer demand. Budget cuts reduce the level of total spending. Raising taxes on high income households also will reduce spending, but by much less than the amount of the tax increase since those with plenty of income typically spend only a fraction of their income.

By contrast, almost every dollar of state and local government spending on transfer payments to the needy and for the salaries of public servants providing vital services to our communities enters the local economy right away, generating a greater economic impact. The New York local spending impact difference is even greater when you consider that much of the higher state income tax will be deductible against federal income taxes, and that non-residents who commute to high-paying jobs in New York will pay much of the increase.

Raising taxes and maintaining public expenditures and investments also helps New York and America in meeting its long run needs. America today faces two major problems-inadequate investments, especially in infrastructure, and growing inequality. The poor are particularly dependent on government expenditures, and cutbacks would hurt them the most.

Our nation is at an historic juncture. In both Washington and Albany, we need to move away from polarization and toward economic and fiscal policies that restore a better balance between the private and public sectors.

Sincerely,

William J. Baumol, New York University

Dimitri B. Papadimtriou, The Levy Economics Institute of Bard College

Ronald G. Ehrenberg, Cornell University

Jeff Madrick, The New School

Edward Wolff, New York University

James Parrott, Fiscal Policy Institute

2 Responses to “The Day the Music Died”

  1. unowned says:

    While the rest of the economic world seems intent to print money like its just another goddamn piece of paper, I thought you might be interested in checking this out…

    http://www.opencurrency.com
    http://www.freelakotabank.com

    I will actually be working with the American Open Currency Standard as a currency officer, doing my best to get people out of dollars and into REAL money. For anybody who would be interested in joining a bulk order for silver this Friday (12/12), I will be picking up 1oz rounds for $4.75 over spot price. For those that are interested, please feel free to contact me with any questions or comments.

    Gabe Sukenik
    AOCS New York
    gabriel.sukenik@gmail.com

  2. T. Pizback says:

    I thought Robin Hood used to reside in Sherwood Forest, I am glad to see he has upgraded to the Ivory Towers of New York’s institutes of higher learning. Common Sense would dictate a cutback on all but essential services, or maybe we should all work for the state, I hear communal living is coming back in vogue.

Leave a Reply

books on zlibrary official