Any one looking for a V shaped recovery better think again.
States Are in a Quandary as Taxes Evaporate and Virus Spending Soars
April 15, 2020
The ballooning costs of the coronavirus pandemic have put an unexpected strain on the finances of states, which are hurriedly diverting funds from elsewhere to fight the outbreak even as the economic shutdown squeezes their main source of revenue — taxes.
States provide most of America’s public health, education and policing services, and a lot of its highways, mass transit systems and waterworks. Now, sales taxes — the biggest source of revenue for most states — have fallen off a cliff as business activity grinds to a halt and consumers stay home.
Personal income taxes, usually states’ second-biggest revenue source, started falling in March, when millions lost their paychecks and tax withholdings stopped. April usually brings a big slug of income-tax money, but this year the filing deadlines have been postponed until July.
We have entered uncharted territory.
2019 to 2032.
Oil Price Collapse Delivers a Loud Warning
April 21, 2020
“Biggest” or “fastest” declines in history are becoming routine characterizations in business media of everything from stocks to unemployment claims to U.S. Treasury yields and now to commodity prices. You’d have to go back to the 1930s and the Great Depression to find as many similar references.
And there was one other key characteristic that defined the early 1930s and now: unprecedented wealth inequality that had been manufactured by Wall Street running an institutionalized wealth transfer system that culminated in a stock market crash that erased 90 percent of the stock market’s value from 1929 to 1932.
The late MIT economist, Lester Thurow, explained some three decades ago what happens when wealth is concentrated in too few hands:
“Depression is seen as a product of systematic tendencies for the distribution of wealth to become concentrated among a few. When this happens, demand eventually sags relative to supply and long cyclical downturns commence…