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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: EL KABONG!!! who wrote (28021)	1/27/2003 10:28:22 PM
From: Muthusamy SELVARAJU	Read Replies (1) \| Respond to of 74559

Kerry, It seems such a shock that the 'less government, less taxes wave' that Reagan started in the US so quickly has come to a stage of 'now it is time to pay the piper'. Having lived in both Europe (Switzerland/UK) and Asia (Singapore/Malaysia), and travelled to most of the countries in these regions, I feel safe to say that most countries in these regions, however difficult their economic circumstances, did not go down this path of reducing income taxes by substantial amounts at all levels, on this 'hard-to-measure' promise of less government. Can this problem be 'fixed' soon, if not, how long will it take? And in the meantime, what are the social, economic, political implications for the US?

To: EL KABONG!!! who wrote (28021)	1/27/2003 11:26:37 PM
From: energyplay	Respond to of 74559

Kerry's summary is correct. Not every state is in deep trouble, but some of the big states, like California, are really is bad shape. Revenue in states with heavy sales taxes and/or progressive income taxes soared during the boom years. Many states do have room to cut services and raise taxes. The States affected will issue new bonds to cover the short fall, and banks and others will buy them with money supplied by the Fed at 1.75%. Monetizes the debt. Lots of noise in the meantime. May let one or more of the states flirt with BK, or at least have massive cut backs. Inflation later. Possible opportunity for buying state bonds near the bottom, or on the way up. Just need to call the bottom...;-)