Colorado government tax revenue prediction was off for the first six months of legalized pot sales. They were only off by about 70%.
When voters approved recreational marijuana sales the state predicted it would pull in more than $33 million in new taxes in the first six months. The actual revenue came up more than $21 million short.
Illinois is a broke state and their teacher pension fund does not make things any easier on how it is contractually written. Yes, it is a contract and the state is honoring the pension as of right now. In the spirit of “States Rights” the voters of Illinois find their financial situation very pallable no matter the current conditions or what they will be facing as the physics of economics plays out. This blog is not making fun of Illinois but it also will not give pity to the residents when debt hell hits.
The Washington Times had a long article showing the ramifacations of this current penson plan that they operate on. I will post the key financial highlights of it while you can read the rest in the embedded link.
About 6,000 retired educators collecting more than $100,000
More than 100,000 retired Illinois educators had been paid back what they invested into the system just 20 months after leaving work
The pension is about $54 billion underfunded
The teacher pension’s 3 percent annual increases aren’t tied to inflation — meaning they cannot fluctuate up or down depending on the economy or budget pressures.
Illinois public sector workers will receive, on average, a $1,906 annual cost of living adjustment this year — nine times more than the average Social Security beneficiary
Two things about the U.S. government, they are broke and their tax collection agency the IRS will do anything for revenue. This piece of legal news comes via TaxProf Blog:
The Tax Court yesterday required the taxpayer to include $668 in income as reported by Citibank on Form 1099-MISC as the value of an airline ticket received by the taxpayer upon redemption of 50,000 “Thank You Points” from opening a Citibank account. Shankar v. Commissioner, 143 T.C. No. 5 (Aug. 26, 2014).
I’ve been seeing some house sales numbers popping up as of late but haven’t really dug into them. This post I’m writing is because I stumbled upon a claim, looked it up and found a trend that maybe reversing……How long Americans stay in their homes they buy. While reading an article from Dave Ramsey on “Homebuyer Mistakes” he had this in the article:
Homeowners stay in their homes an average of just four years, according to the National Association of Realtors.
I found this to be very intriguing and wanted to dig more into this number. First article I found (Longtime Homeowners a Relative Rarity in U. S., Census Shows) dated November 21, 2003. Seems to back up the claim of short ownership of a home.
Although a relative rarity in the United States, where homeowners stay in their homes an average of six years, according to the National Association of Realtors
Now a more recent article I found (Downside of low US mortgage rates? Less selling) written in July of this year shows homeownership economic factors pertaining to the effects of low interest rates caused by in fashion by the Federal Reserve. Shows why the housing market will be very slow the next decade.
More than one-third of homes with a mortgage now have rates below 4 percent, real estate data provider CoreLogic estimates….. As a result, many homeowners with low rates are staying put. Others are moving and buying new homes, but keeping their old ones and renting them. The number of available homes last year was the equivalent of just 4.9 months’ worth of sales, according to the National Association of Realtors.
The big problem of people not being be able to sell is equity issues…..
Another factor is that almost 40 percent of homeowners still don’t have enough equity to enable them to sell. Some are “underwater,” with a mortgage higher than the home’s value. Others may have so little equity that they can’t afford to pay off the sales costs and put a down payment on their next property.
One final note on top of this, many investors and Americans expect interest rates to rise significantly over the next few years. This will be a big pressure on home sales along with the above mentioned.
The Census Bureau released their fourth quarter 2012 results and found 35.4% of all Americans to be receiving welfare. Here is more from a lengthy CNSNews Report.
109,631,000 Americans lived in households that received benefits from one or more federally funded “means-tested programs” — also known as welfare
The number jumps when other programs are added in:
When those receiving benefits from non-means-tested federal programs — such as Social Security, Medicare, unemployment and veterans benefits — were added to those taking welfare benefits, it turned out that 153,323,000 people were getting federal benefits of some type at the end of 2012.
Here is a breakdown of what welfare program is received by Americans and how many on it:
82,679,000 Medicaid
51,471,000 Food stamps
22,526,000 Women, Infants and Children program
20,355,000 Supplemental Security Income
13,267,000 lived in public housing or got housing subsidies
5,442,000 got Temporary Assistance to Needy Families
4,517,000 received other forms of federal cash assistance.
Charles Blahous of the Manhattan Institutue recently reported on some findings from the July 28th Social Security Trustees annual report. Social Security and Medicare are two government programs that have been long embedded in government spending. These programs are political hot topics whenever they are suggested to be “reformed” or made more efficient, political dogma ensues. Changes for the most part of these programs are made to give MORE benefits to people and not a regression. I will take some information from Mr. Blahous write up which he did testify in front of Congress about and then turn to two other sources for completion of this summary.
The public must understand the breakdown of how Social Security functions when pertaining to funds
Social Security has two trust funds. Payments for retired workers as well as spouses, children and survivors are made from the Old-Age and Survivors (OASI) trust fund. Payments for disabled workers and their dependents are made from the Disability Insurance (DI) trust fund. It has become commonplace to refer to the two trust funds’ combined operations as though they were one fund. This nomenclature is convenient but not truly accurate. By law each of the two trust funds must separately have a positive balance to allow them to make benefit payments.
Here is big point for people to grasp about this trust fund. Many people who support Social Security at any cost claim the program has too by “law” go on forever no matter what funding issues arise. That is true to a point and here is that BIG point. Once funding for the SS Disability Insurance fund starts going in the red, payments can be greatly reduced “BY LAW”.
The trustees have been warning for several years (long before I became one) that Social Security is on an unsustainable financial trajectory. We have now moved from a long-term problem to an immediate one. The DI trust fund is currently projected to be depleted in two years, in the fourth quarter of 2016. At that point, unless the law is changed disability payments will drop suddenly by 19 percent.
I would suggest reading Charles Blahous article (A Guide to the 2014 Social Security Trustees Report) a few times and even take some time to ponder it. It is a very nice write up and one to keep on file for further events.
Social Security and Medicare produce reports and the federal government then puts together a summary(Status of the Social Security and Medicare Programs) of these two reports. Here are some highlights of the summary pertaining to just Social Security.
Neither Medicare nor Social Security can sustain projected long-run pro- gram costs in full under currently scheduled financing
Social Security and Medicare together accounted for 41 percent of Federal expenditures in fiscal year 2013
The Trustees project that this annual cash-flow deficit will average about $77 billion between 2014 and 2018 before rising steeply as income growth slows to its sustainable trend rate after the economic recovery is complete while the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.
In October 2013, “60 Minutes” reporter Steve Kroft did a segment called “Disability, USA”. If you have not seen it, I suggest you take a look at the SS disability situation happening in America.
Final summation: For years many Austrian Economic students have talked about the Social Security situation. They are usually met with resistance by economic pundits who produce wild and complicated graphs that say everything is o.k. Problem with this belief is it defies reality. Real money is being given to real people. This program has real issues that cannot be delayed as the physics of debt take over.
The United States Treasury just released up to date tax revenue collection relating to 2014 fiscal government budget. 2014 government budget ends in September.
CSN News provides a more detailed analysis:
Inflation-adjusted federal tax revenues hit a record $2,469,178,000,000 for the first 10 months of the fiscal year this July, but the federal government still ran a $460,450,000,000 deficit during that time, according to the Monthly Treasury Statement.
After the current fiscal year, the second highest federal tax intake in the first 10 months of a fiscal year occurred in the first 10 months of fiscal 2007, when the government collected $2,432,115,460,000 in 2014 dollars – or $37,062,540,000 less than in the first 10 months of this fiscal year.
The total dollar amount already spent by the government stands at $2,929,628,000,000.
You can read the rest of the article here.
Indiana public schools are swinging into full gear and with that, their financial books are starting to get published in the back pages of your local newspaper. Most of their financial information from a broad spectrum is posted on the state website and can be found in the Department of Education “School Financial Reports” portal.
The debt held by public education has swelled in recent years in municipalities. For numerous years, Indiana school boards were able to pass tax increases and spending agendas without much say from the public. Since 2008 school boards must get these items on a ballot for voters to decide.
Here are some listings of a handful of school corporations around the state and how much “total principal” they owe. Time period covered is July 1, 2012 to June 30, 2013:
Brownsburg $188 Million
Avon $236 Million
Indianapolis Public Schools $642 Million
South Madison Schools $69 Million
Greenwood Community $20 Million
Plainfield Community $127 Million
Greenfield-Central Com Schools $96 Million
Carmel Clay Schools $153 Million
Zionsville Community Schools $200 Million
Fort Wayne Community Schools $133 Million
Rochester Community $13 Million
Seymour Community Schools $22 Million
Vincennes Community $31 Million
Lake Station Community Schools $15 Million
Tell City-Troy Twp School Corp $24 Million
Fremont Community Schools $5 Million
Vigo County School $58 Million
Per Associated Press:
One of the largest ranches in the U.S. and an icon for Texas horse and cattlemen has been listed for $725 million, marking the end of a decades-long courtroom battle among the heirs of cattle baron W.T. Waggoner, who established the estate in 1923.
The estate includes the 510,000-acre ranch spread over six North Texas counties, with two main compounds, hundreds of homes, about 20 cowboy camps, hundreds of quarter-horses, thousands of heads of cattle, 1,200 oil wells and 30,000 acres of cultivated land, according to Dallas-based broker Bernie Uechtritz, who is handling the sale along with broker Sam Middleton of Lubbock.
I did a little calculating on what a 30 Year Mortgage would be on this property if you put a $30 Million dollar downpayment on it and secured a loan for 4.25%. Your monthly payments would be just a shade over $3.4 Million a month.
John Maxfield from theThe Motley Fool penned an article in the USA Today that shows an enticing graph of potentially the next big crash in the markets.
Austrians economic disciples have been screaming the last decade about the Federal Reserve’s printing or now digitizing of money to the banks through borrowing. On top of that, the federal government has needed massive amounts of money to fund welfare/social programs that are by law “mandatory”.
Maxfield and Austrians part ways with his explanation in the article. There really is no more denying inflation is happening. Pricing is exploding across many sectors.
Personally, I have followed the Feds printing and done well. But the money supply is drying up and a downturn is very real down the road
Hoosier Econ 