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STATE TAX RECEIPTS LAG TRUE GDP. IS THE RECOVERY ON OR NOT?


“...Look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own...If you’ve got a business — you didn’t build that. Somebody else made that happen.” ~ Barack H. Obama, II, 44th President of the United States of America



When politicians give speeches, never is it that they say something stupid because they are stupid themselves. Rather, politicians repeat what their speechwriters have written.

So are speechwriters stupid? Speechwriters write persuasion geared to appeal the majority. Speechwriters rely on the majority having easily bamboozled intellects and defective characters by appealing to their instincts of greed, envy and sloth.

It's not likely that Obama is daft about all things America and economics. It's that Obama expects most who listen to him to be daft. So, in truth, Obama's deceitful way reveals his true character.

All of those roads and bridges of the past were not built by ghosts. Men built them. But before taxes could be ripped from men to pay for those things, all of this had to happen in sequence:

production → surplus → sales > outlays = profit

For if there is no profit, in short order, any firm gets put to ruin. There is no way to pay for needed capital — products that yield goods in production of something else.

If firms can't break even first, there can be no taxes collected. Firms would go to ruin in short order if taxes could be levied below break even.

Without profit there can be no taxes. All taxes are an unearned share of profits. If no profits arise, there can be no taxes. Politicians are sharing the profits by the force of taxation  without having invested any cash or credit into the capital of anyone.

That means there can be no roads, bridges, government bureaucrats, government freebie welfare for layabouts, none of that without first there being surplus and profit. That is how reality works.

Obama ought to have said the truth. That today's businesswomen and men can sell more because of roads and bridges built and paid for by their ancestors with income ripped from their hands by politicians like Obama.

In THE USA ECONOMY ADVANCE LIKELY HAS BEGUN AT LONG LAST, I revealed the upwelling of private sector True GDP compared to public sector True GDP along with the general advance of True GDP. Yet, as you can see from the following graphs, taxes are lagging behind GDP.

States' legislators are having a hard time collecting taxes using their extant tax laws. Why is this so? Profits growth for firms and workers has yet to match the latest True GDP growth. Sales are advancing though.

However, unless those curves at least flatten and then swing up within the next few quarters,  it is hard to see how the two quarter positive turn in True GDP can sustain.