Category / debt

by Hoosier Econ

Total Cost of Ferguson Riots

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Costs of the Ferguson, Missouri riots still trickle in. The variance of it is still hard to track down due to costs outside the known figures government officials have tallied. The business and personal side still have to be studied. I have tracked down some articles dealing with both the August and December riots.

The Gateway Pundit reported in October the total August costs of the first riot to taxpayers was around $5.7 Million.

The massive police response to Ferguson in the wake of the shooting death of Michael Brown on Aug. 9 will take nearly $1.5M from the Missouri state budget.

According to the Missouri Department of Public Safety, the Missouri State Highway Patrol costs total $1.1M while activating the National Guard will cost the state roughly $384,000.

This estimate is solely for the initial response: from the time protests erupted right after Brown died to the last few weekdays of August.

St. Louis County officials estimated the county’s initial cost will be $4.2M. That’s a combination of money going to police overtime, fixing damaged cop cars and food and supplies for first responders.


Channel 4 KMOV/St. Louis reported part of the costs in the August riot was overtime paid to law enforcement and civilians which totaled $855,000.

The December Ferguson riots cost $20 Million according to Garry Earls, St. Louis CFO.

The grand total from both riots cost local/state government around $26 Million. Now the unknown costs will take time to calculate. Insurance companies at some point will release damage to business and what they paid out. Property Casuality 360 did give a sobering fact of when disaster happens and the amount of businesses that do not reopen:

Roughly 40-60% of small businesses never reopen their doors following a disaster.


Businesses in Ferguson face additional challenges. Property Casuality 360 pointed out those who do reopen face higher insurance costs which ulimately mean they get passed along to the consumer. Another obstacle is lack of business which KMOX CBS in St. Louis reported on in October. Quoting one business owner stating his sales were down 40%.

In the end, Ferguson will probably never get back to what it was before the riot.

by Hoosier Econ

U.S. Government Hits Debt Limit on March 16th

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United States Government spends so much money these days that the debt is reaching its ceiling again. Do not expect Republicans put much of a fight up in stopping any raises as they usually join Democrats in governments spending addiction.

Via CNBC –

Unless Congress takes action, the U.S. will hit its debt limit on Mar. 16, but would begin taking “extraordinary measures” to finance the government on a temporary basis, according to the U.S. Treasury.
In a Friday morning letter to House Speaker John Boehner and other House and Senate leaders, Treasury Secretary Jack Lew said that his office will be forced to suspend the issuance of State and Local Government Series securities on Mar. 13 unless the debt limit is raised.

“Accordingly, I respectfully ask Congress to raise the debt limit as soon as possible,” Lew wrote in his letter.

The Congressional Budget Office said this week that if Congress does not raise the federal debt limit, the Treasury Department will exhaust all of its borrowing capacity and run out of cash in October or November, slightly later than a previous forecast.

by Hoosier Econ

City of Chicago Downgraded by Moody’s

RahmEmanuel

Via Economic Policy Journal:

Moody’s Investors Service has downgraded Chicago’s debt rating, citing its overwhelming pension burden. Moody’s dropped the city’s rating to Baa2.

A rating of Baa2 is eight notches below the highest debt rating of Aaa.

Moody’s said in its statement its outlook for the city remains negative. A drop of two more notches would make mean the city’s bonds would become“junk” bonds.

“We strongly disagree with Moody’s decision to reduce the city’s credit rating and would note that Moody’s has been consistently and substantially out of step with the other rating agencies, ignoring the progress that has been achieved,” a spokeswoman for Mayor Rahm Emanuel, Kelley Quinn, said in a statement.

Chicago has more than $8 billion in taxpayer-backed general obligation debt, as well as roughly $800 million in additional bonds backed by sales tax and motor fuel tax revenues.

by Hoosier Econ

Canada Investing in Indiana’s I-69 Project

Indiana currently is in the middle of the I-69 Highway project. Much of the financing for “Phase 5” made history but many didn’t take notice of why.

The I-69 Section 5 project will upgrade 21 miles of SR 37 (an existing four-lane divided highway) between Bloomington and Martinsville, Indiana to full Interstate standards. The $325 million project includes four new interchanges and four new overpasses, in addition to improvements at existing interchanges and additional travel lanes in urban areas along the corridor.

In April 2014 Canada’s Public Sector Pension Investment Board (which also holds a minority equity stake in Isolux Infrastructure) took a 49 percent equity stake in the concession company through its affiliate Infra-PSP Canada; this represents the first upfront direct investment in a U.S. P3 project by an international public pension fund. The partners reached financial close in July 2014, and construction is scheduled to take 28 months, with the project slated to open by the end of 2016.


JD Supra Advisor noted foreign investment in U.S. infrastructure projects like Indiana is a test run and stability is key for any future investments.

Given the long term nature of a P3 investment, political and regulatory stability is essential to encouraging investment. For overseas investors in the US market, this will require confidence that there is political and public acceptance of private sector investment in infrastructure.

by Hoosier Econ

Lots of Erections at the Pentagon

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The unfortunate part of government spending is taxpayers don’t get to know what is being spent until it gets spent. CBS News uncovered some “dysfunctional” spending from the pentagon in a recent report:

According to the Military Times, data from the Defense Health Agency indicate the U.S. Department of Defense spent $41.6 million on Viagra and $84.24 million total on drugs for erectile dysfunction in 2014.

Since 2011, the bill for covering drugs like Viagra, Cialis and Levitra for active and retired military personnel and eligible family members totalled $294 million — nearly as much as four U.S. Air Force F-35 Joint Strike Fighters, says the Military Times.

The DoD first began covering the cost of Viagra prescriptions in 2012, and currently another seven types of erectile dysfunction medications are paid for under the federal agency’s health plan. Of the 1.18 million prescriptions filled in 2014, 905,083 were for Viagra, at a cost of $41.6 million. Cialis was the second most commonly prescribed ED drug, with 185,841 prescriptions totaling $22.82 million. Revatio, the priciest ED drug, was prescribed the least with 1,699 prescriptions in 2014 for a total cost of $2.24 million.

You can read the rest of the article here.

by Hoosier Econ

New Name for Obamacare Tax

I filed my taxes this past weekend online through H&R Block and stumbled upon the Obamacare tax. The sly government gurus have gave it a warm fuzzy college theory name of “Shared Responsibility Payment”.

Remember, under collectivism, shared responsibility also involves shared misery.

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by Hoosier Econ

Illinois Facing Debt Payments

Illinois is starting to get hit with rising interest payments on debt borrowed. Illinois Policy points out how compound interest is a vicious beast once it takes hold:

According to the fiscal year 2015 budget summary from the Commission on Government Forecasting and Accountability the cost of debt service in fiscal year 2015 is nearly $4 billion on outstanding bond debt of nearly $32 billion. The debt service amounts to more than 11 percent of the state’s anticipated revenues for the fiscal year – 11 percent that can’t be used for essential programs.

Illinois will not be the only heavy spending state to start getting hammered on debt payments. But here is how a debt situation gets out of control:

Primarily as a result of these nontraditional uses of bond debt, the state began fiscal year 2015 saddled with $32 billion in bond debt requiring $4 billion, or 11 percent of its general funds budget, to pay the annual debt service. This represents nearly a 400 percent growth in debt service, more than 300 percent growth in outstanding bond debt, and more than 200 percent growth in debt service as a percentage of general revenues since 2002.

by Hoosier Econ

Federal Government Spending For the Next 10 Years

Economics 21 had an interesting graph in their article titled “How to Fix the $960 Billion Budget Deficit”.

Here is how federal government spending will be broken up the next ten years.

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Almost two-thirds of additional spending will be driven by entitlements, primarily Social Security, Medicaid, and Medicare. America’s aging population is the primary contributor to the growth of Social Security and Medicare, while the Affordable Care Act substantially expanded the scope of Medicaid.

Adding interest payments to the budget brings the total increase in the debt from mandatory spending to 85 percent. Spending is projected to grow by $2.3 trillion annually by 2024.

by Hoosier Econ

Indiana in Top 10 for Tax Climate

Via The Payroll Blog

10 best business tax climates can be found in:

Wyoming
South Dakota
Nevada
Alaska
Florida
Washington
Montana
New Hampshire
Utah
Indiana

The worst tax climate states for small business, according to the report, are:

New York
California
Minnnesota
Wisconsin
North Carolina
Maryland
Rhode Island
Connecticut
New Jersey
Vermont

by Hoosier Econ

How Federal Tax Dollars Were Spent in 2014

The Tax Foundation put together a chart showing how federal tax dollars were spent.
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Compare that to 1962 federal spending
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