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Obama’s Head of Council of Economic Advisors Says Tax Increases are Highly Contractionary

The Chairwoman of President Obama’s Council of Economic Advisers and Christina D. Romer and economics Professor David H. Romer of the UC-Berkeley published The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks, 100 Am. Econ. Rev. 763 (2010). Here is the abstract:

“This paper investigates the impact of tax changes on economic activity. We use the narrative record, such as presidential speeches and Congressional reports, to identify the size, timing, and principal motivation for all major postwar tax policy actions. This analysis allows us to separate legislated changes into those taken for reasons related to prospective economic conditions and those taken for more exogenous reasons. The behavior of output following these more exogenous changes indicates that tax increases are highly contractionary. The effects are strongly significant, highly robust, and much larger than those obtained using broader measures of tax changes.”

“Our estimates suggest that a tax increase of 1 percent of GDP reduces output over the next three years by nearly three percent.”

Government Insanity – Small California City Pays Three Employees $1.6 Annual Salary

More proof that the taxpayers exist to pay for the ruling class.  Orange County Register:  “the city manager of Bell [California], Robert Rizzo, receives a salary of $787,637 as the top bureaucrat in a city of about 38,000 residents, mostly Latinos. Bell’s Police Chief Randy Adams makes $457,000 a year while Assistant City Manager Angela Spaccia gets $376,288. This might not sound like a lot to you but Bell is one of the poorest cities in L.A. County.”  That’s a combined salary of $1,620,925 for the three imperial city workers.  The police chief makes more than the head of the Los Angeles (population 3.8 miillion) Police Department.  Four of the five members of the part time city council make almost $100,000 a year.  When Rizzo retires, he will become the highest paid retired California employee at over $650,000 a year.

See “California Official’s $800,000 Salary in City of 38,000 Triggers Protests.”

Damn Dam Burst Empties Tempe’s Fake Lake

The City of Tempe, Arizona, must be asking “how much does it cost to replace a billion gallons of water?” after one of the rubber dam units burst allowing the water in the lake behind the dam to leave the fake lake high and not so dry.  Arizona Republic:  “Tempe Town Lake overnight became a bog after one of the four inflatable bladders at the west end of the lake exploded around 9:44 p.m., sending a wall of water into the Salt River bed.  On Wednesday morning swampy patches of earth could be seen in many parts of the lake bed, with standing water in the center.”

See the photos and”Sides trade blame over collapse“

“Bridgestone Industrial Products, which built the dam, said it warned Tempe for more than a decade that the inflatable-rubber bladders needed to be kept cool and moist to compensate for the Valley’s severe heat and sunlight.”

See also “Tempe Mayor: Tempe Town Lake to reopen by fall” and “Officials detail response to Tempe Town Lake dam breach.”

The unspoken and unanswered questions are how much money will cash-strapped Tempe have to spend to fix the dams and restore the lake and should it do so in light of its budget crisis?

Obama Awards $1.45 Billion Loan Guarantee to Company Promising 85 Jobs

Daily Caller reports from the “it’s not our money that the US doesn’t have so we can spend as much as we like, especially if we say its for green energy” department:  “Abengoa Solar, which received $1.45 billion from the Department of Energy, admits on its website that it will use the money to build a plant in Arizona that will create only 85 permanent jobs.”

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