January 2011
7 posts
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State Bankruptcy Discussion Is Not Helpful.
by Jordan Eizenga
With large and immediate debt obligations weighing down states, some federal lawmakers have begun to consider passing legislation to allow states to declare bankruptcy. Without going into the details of bankruptcy law, at present, only municipalities can declare bankruptcy through a “Chapter 9” process. In a nutshell, the idea is to give states the ability to...
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WatchThe Wall Street Journal reports on the turmoil in the municipal bond market.
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Laura Tyson and others talk tax expenditures,...
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States, Debts, Defaults, and Derivatives
by Jordan Eizenga
35 states are predicted to have budget gaps for the 2012 state fiscal year, which starts this July. According to the National Governor’s Association, these budget gaps total $97 billion. The natural question that emerges from these facts is whether states will default on these debts and people do expect defaults to increase (though the default rate will probably stay...
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No, Tax Cuts Do Not Pay for Themselves
By Jordan Eizenga
Contrary to the article that appeared in last Wednesday’s edition of the Business Section of the Globe and Mail, cutting taxes does not uniformly increase tax revenue. Wednesday’s article by Neil Reynolds entitled ‘How tax cuts beat out tax hikes in the revenue-raising game’ asserts that “lower tax rates will produce more [tax revenue]” than higher tax rates. This view that tax...
