Wyoming Liberty Group
Never bark at the Big Dog. The Big Dog is always right.
On July 28 the Consensus Revenue Estimating Group (CREG) published its quarterly update on state government revenue. While CREG as usual takes a low profile approach to the state's revenue problems, the actual message in the report deserves some real attention.
In her big speech on economic policy on July 13, Democrat presidential candidate Hillary Clinton outline a vision for expanding the American welfare state. At 17:45 into the video, Mrs. Clinton summarizes her entitlement agenda:
Fair pay and fair scheduling, paid family leave and earned sick days, child care are essential to our competitiveness and our growth.
Ever since Colorado decided to legalize marijuana there has been an increasingly intense discussion in Wyoming over whether or not the Cowboy State should go the same way. Some people have (for unclear reasons) confidently, consistently, told us that it can never happen here. However, as I explained last year, whenever there is the prospect of a new tax, anything can happen, even in Wyoming. Alas, from KGAB:
This week's big news on the economic front is the fiscal crisis in Puerto Rico. With a debt at 70 percent of its GDP the U.S. territory has assumed debt payment obligations that go well beyond what its $28,500-per-year GDP per capita can pay for. Time is running out for San Juan to come up with a solution; if they don't, bankruptcy is a real possibility.
Earlier this week, in an outlook toward the federal government's budget problems over the next few years, I outlined a troubling but entirely realistic scenario:
It is the spring of 2020. The U.S. economy is humming along at an unimpressive growth rate of a bit more than two percent per year. The federal budget has been running growing deficits for the past few years, and the forecast for 2020 is a deficit of $554 billion. Congress is borrowing more than eleven percent of every dollar it spends. Interest rates on Treasury bonds are at four percent, with forecasts predicting an upward trend for the rest of the year. Total unemployment, six percent, is steady and shows no tendency of shrinking. Almost 9 percent of America's youth are unemployed, with no decline in sight. A recession begins. Normally, this would be not be much of a problem. Normally, the American economy could ride it out - much like the Millennium Recession - and get back to business in 18-24 months. This time, though, it is going to be different. Painfully different.
This is a serious matter that all Wyomingites need to pay attention to. From the Center for Freedom and Prosperity:
The Organization for Economic Cooperation and Development (OECD) is directing considerable resources toward development of a new framework for taxation of multinational enterprises. According to tax bureaucrats at the OECD, the G20, and finance ministers from large welfare states, base erosion and profit shifting (BEPS) is a serious problem that requires drastic action. Without input from the United States Congress and other elected national bodies, they are rushing to rewrite the rules of global commerce. Available data does not support the contention that BEPS is a serious concern. Nevertheless, the OECD’s sweeping proposals to combat BEPS would create a privacy nightmare and stifle economic growth. Even if there were a problem, better policy responses are available. The simplest and most powerful being adoption of pro-growth tax rates. To make sense of the sudden push for a massive, multinational undertaking where costs are likely to be significant and benefits small at best, if they exist at all, the OECD’s project on BEPS must be viewed in the context of the organization’s long-standing war on tax competition.