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Global Economy Bursting?

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California use-tax program hits small businesses

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/08/01/BUBN1KGBHP.DTL&type=business

Many Californians ignore the "use tax" - the equivalent of sales tax but remitted by state residents for products bought from out-of-state retailers that did not collect sales tax. The state estimates that $1.1 billion in use tax goes uncollected every year.

Meanwhile, the state is pursuing other strategies to collect more use tax.

One that's prompted an outcry from small businesses is the "qualified purchaser program," enacted by legislators in 2009 and in effect since last year. It calls for California to contact service businesses that have more than $100,000 in annual gross revenue, registering them for a program in which they have to fill out a new form detailing their use-tax obligations. (Retailers already have a mechanism for paying use tax so were not contacted.)

About 500,000 businesses, from chiropractors to dental offices to tax preparers, got the notice. But some were actually pretty small concerns; a landscaper whose supply costs are part of that $100,000 in revenue might only net about $20,000, for instance. Many were confused by the new regulation, and dismayed by the costs of filling out the form.

The hunt for tax revenue causes small businesses huge cost increases to comply with this sort of regulation. The business is presumed to owe a tax and the Franchise Tax Board will estimate taxes owed and bill those who do not return the new form.
 
Update: Central Falls files for bankruptcy; all municipal workers & retirees contracts voided

http://newsblog.projo.com/2011/08/receiver-chafee-central-falls.html

All contracts with municipal workers and retirees, including the fire and police departments, are immediately voided. Retirees must begin to pay 20% of their medical coverage effective immediately. Services have been cut to the bone. Taxes have been raised to the maximum level allowable.
 
prasercat said:
The increasing price of gold is in effect the lengthening middle finger to US investment assets.
Click to expand...

It could be the reflecting this government's policies and leadership. We do print dollars, as much as the world can stand. The stock market is now getting use to the idea that there is no hope and no change; just borrow and spend as far as the eye can see. All those new laws and regulations are taking effect along with the certainty of a $3 trillion tax increase in the beginning of 2013 with the expiration of the Bush tax cuts. Businesses are in no mood to hire but they are in the mood to lay off people.


US Job Cuts Surge 60% In July On Month - Challenger Report

http://online.wsj.com/article/BT-CO-20110803-707866.html

U.S. employers announced plans to cut 66,414 positions from their payrolls during July, surging 60% from June, and hitting the highest level since March 20l0 amid a flurry of layoff plans by major employers.
 
Randolph Kinney said:
It could be the reflecting this government's policies and leadership. We do print dollars, as much as the world can stand. The stock market is now getting use to the idea that there is no hope and no change; just borrow and spend as far as the eye can see. All those new laws and regulations are taking effect along with the certainty of a $3 trillion tax increase in the beginning of 2013 with the expiration of the Bush tax cuts. Businesses are in no mood to hire but they are in the mood to lay off people.


US Job Cuts Surge 60% In July On Month - Challenger Report

http://online.wsj.com/article/BT-CO-20110803-707866.html

U.S. employers announced plans to cut 66,414 positions from their payrolls during July, surging 60% from June, and hitting the highest level since March 20l0 amid a flurry of layoff plans by major employers.
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All the focus is on the government, as though it has been the "spender" and problem all along. The problem was it didn't rein-in mortgage and qualification practices that eroded the home-equity underpinning of the US economy. The people of the US lived beyond their means, borrowed and leveraged heavily since the early 2000's.

When the domino's started to fall and it was determined that there was no more money in "blue sky", the homeowner refinance ATM machine was already greatly leveraged, not to mention over-leveraging of new bigger homes than could be afforded only with the expectation of additional income from a continued rise in the market and refinancing.

During mid-2007, the "margin calls" starting going out to homeowner's everywhere when the market no longer went up and when the layoffs began - They couldn't go to the homeowner ATM to get the money to continue to pay their standard of living. When values sank into negative equity- not hard to do with 0 or 5% down - many began to flee their homes and unaffordable lives.

We focus so much on the government right now due to media hype surrounding "bad behavior" by the current administration. It's marketing, that is all. They are trying to sell a change in administration.

The headlines today are the tea guys stuck to their guns and carry "big sticks" - Sounds like someone is worried about some negative comments and trying to put a bandaid on it. [You always bow and thank everyone for their adoration when there is booing and unhappiness in the crowd over your performance - this kind of marketing works].

I imagine we will be paying for this little debt ceiling standoff in ways we can't imagine - S. Korea buying gold, is a little hint of Asia's degree of being peeved and disenchanted with our "full faith and credit" - We don't even know how many decisions have already been made over the past few weeks overseas that are going to screw us down the road.

http://www.washingtonpost.com/wp-dyn/content/graphic/2010/01/01/GR2010010101478.html


Ditch the dollar, buy gold!

"Remember that the Chinese may have foreseen such an eventuality and have been encouraging the purchase of gold and silver in their neighborhood banks. We may soon witness the acceleration of gold and silver purchases by the nascent Chinese middle class. Notice the emergence of the Hong Kong Mercantile Exchange which will allow 3 billion people in China access to silver as a safe haven hedge. This may be a catalyst for silver prices to move into new record highs"

http://goldstocktrades.com/blog/2011/08/01/how-will-debt-ceiling-deal-impact-gold-and-silver-prices/
 
prasercat said:
All the focus is on the government, as though it has been the "spender" and problem all along.
Click to expand...

The government, the elected representatives and the elected presidents, have been the problem - all along as you say.

It is the policies of the government that enable abuse and fraud through lack of enforcement and enabled expansion of lending through loose mortgages backed securities by Fannie Mae, Freddie Mac and FHA guarantees. Wall Street piled on with new exotic securities, approved by the Treasury, SEC, and the credit rating agencies.

When the crash came, it was crony capitalism where the government bailed out Wall Street, the banks, and GSEs - their donors. That transferred the losses into U.S. Treasury debt.

You see, every default on a mortgage held by a bank or guaranteed by the GSEs or FHA is covered by the U.S. Treasury - the taxpayer.

The focus has to be on the government and its policies. The economy can't function the way it is. History dictates the outcome.
 
Randolph Kinney said:
The government, the elected representatives and the elected presidents, have been the problem - all along as you say.

It is the policies of the government that enable abuse and fraud through lack of enforcement and enabled expansion of lending through loose mortgages backed securities by Fannie Mae, Freddie Mac and FHA guarantees. Wall Street piled on with new exotic securities, approved by the Treasury, SEC, and the credit rating agencies.

When the crash came, it was crony capitalism where the government bailed out Wall Street, the banks, and GSEs - their donors. That transferred the losses into U.S. Treasury debt.

You see, every default on a mortgage held by a bank or guaranteed by the GSEs or FHA is covered by the U.S. Treasury - the taxpayer.

The focus has to be on the government and its policies. The economy can't function the way it is. History dictates the outcome.
Click to expand...

I agree with what you are say; however, can we really say that "The Government bailed out Wall Street, etc."
..... or would it be more correct to say the "Wall Street bailed itself out using the US Treasury (the future wealth of the masses)." I'm not really seeing a sharp distinction between the Fed and Wallstreet, since it appears the Fed is beholden to them.

It's like the US Government is essentially a wholly owned subsidiary of "Wall Street" and even though some of its employees are fighting this relationship, the majority have "sold out" and are too powerful to overcome in the long haul.
 
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