Apparently Governor Phil Murphy of New Jersey, a former Goldman Sachs investment banking executive, must have missed those classes in macroeconomics in business school, or he must have not been paying attention. Murphy operates in his own world, filled recently with his newfound power to control the lives of people. And he uses that power indiscriminately and seemingly without thought

THE DEMOCRATIC RESPONSE IN THE MIDDLE OF PANDEMIC: A HARBINGER FOR THE NATIONby E.P.UNUMAugust 14, 2020
         It is a cardinal rule of economics that in a period of inflation, the proper economic fiscal and monetary response of the government is to increase taxes, interest and borrowing rates and constrict the availability of money to offset the impact of ‘too many dollars chasing too few goods”, the very definition of inflation. 
In a period of recession, such as the one we find ourselves in now due wholly to the onslaught of COVID-19 and the shutdown of our economy, the proper economic and fiscal response of government is to reduce taxes, increase stimulus and free up the availability of money e.g. reduce interest rates and use the power of the Federal Reserve System to pump money into circulation to help businesses and consumers. 
This has been the steadfast policy of the Trump Administration and the results thus far have been working as evidenced by the reduction in unemployment and key indices such as housing, home-building, and the recovery of the stock market.
         But apparently Governor Phil Murphy of New Jersey, a former Goldman Sachs investment banking executive, must have missed those classes in macroeconomics in business school, or he must have not been paying attention. Murphy operates in his own world, filled recently with his newfound power to control the lives of people. And he uses that power indiscriminately and seemingly without thought.
         New Jerseyans (not this writer) voted for Murphy because they were angry at President Trump or they were angry at Chris Christie, the former governor and so felt there was a need to place their bets once again on democrats for leadership. The result has been a continued decline in the New Jersey economy that is $10+ billions in the red and heading south further into the abyss. 
Governor Murphy’s response has been baffling to anyone with a functioning brain. In a period of recession due to COVID-19, when there is significant unemployment, where businesses and schools have remained closed, when people are concerned about putting food on their tables, paying the rent or mortgage and other bills and taking care of their families, Murphy has raised taxes and more taxes are coming down the road. What are the taxes he has implemented in the teeth of this health crisis? Consider the following:
1.       Property Taxes: Residential and commercial property taxes have increased annually since Murphy became governor and he has blocked all efforts to reduce property taxes. Indeed, New Jersey is the first to implement an “exit tax” to homeowners. If a New Jersey homeowner sells their home in 2020 and relocates to another state, hey must pay a tax on the profit from that sale to New Jersey at the time the sale closes! Astounding.
2.       Property Taxes-First Surcharge: Murphy has unilaterally (not subject to the vote of the people) approved the borrowing of $10.0 billion to be used by the state for its general fund (to repay shortfalls from COVID-19 and the past sins of mismanagement). This borrowing will have to be repaid with annual surcharges on homeowner property taxes for the next 35 years and by an increase in sales taxes
3.       Property Taxes-Second Surcharge: Murphy already approved a law allowing towns to borrow even more than the $10.0 billion. This money would have to be paid back with a second surcharge on property taxes.
4.       State Sales Tax Rates: This has already gone up from 6% to 7% and will likely go to 8 % in the months ahead to help pay back the $10.0 billion the state can borrow.
5.       Gasoline and Heating Oil Taxes: This has already gone up in January and will increase again shortly as the State has approved that increase as well. But, in the vernacular of the times, “it’s only pennies on the gallon”. Sure it is. Just like a one cent transaction tax on stock trades is only a “penny”. Have you thought about what that one cent transaction tax means to billions of transactions a day?
6.        Tolls: This is a favorite of those in power in New Jersey. In September 2020, tolls on the Garden State Parkway will increase by 37% while tolls on the New Jersey Turnpike will increase 27%. The effect simply stated is that a GSP toll which previously was $0.75 will increase to $1.00 while a toll on the NJTPKE which was $2.25 will cost $2.85. The increase will be greater for trucks and commercial vehicles. The Garden State Parkway and New Jersey Turnpike are the most frequently traveled roads in N.J.
7.        N.J.Payroll Taxes: These have gone up since January 2020. Anyone making $34,000 a year is paying up to $600 more in payroll taxes each year.
8.        Tax on Health Insurance Premiums: To add insult to injury, Murphy just approved a 2.5% tax on individual health insurance premiums. Hard to believe, but it is true.
The lesson that Murphy and his cohorts are going to learn is that the people of New Jersey will not sit still for this kind of nonsense. Murphy will be a one and done governor, if he is not impeached. Already there has been an exodus of people and businesses from New Jersey to points south, North Carolina, South Carolina and Florida.
         But the lesson to be learned from all of this is far greater for the nation. New Jersey is a democratic state and it is in real financial trouble. The same can be said for states like California, Washington, Oregon, Illinois, New York, Massachusetts, and a few others, all led by democrats. How long do you think it will be before the so-called leaders of these states implement widespread increases in taxes on their populations and businesses? And what will be the response of the citizens and business owners who reside in these states?
         Already we have seen an exodus of individuals and businesses from states like California to states in the Midwest and Southwest to escape the ridiculous tax increases and gross mismanagement of mayors and governors. The exodus is already in full swing in New York where that city’s tax base is rapidly eroding due to the poor performance of Mayor DiBlasio who has abdicated control of the city to mobs and criminal behavior. Ditto for cities like Newark NJ,, Los Angeles, San Francisco, Portland, Seattle, Chicago, etc. 
Governor Cuomo, the darling of the New York Media is also in way over his head. His handling of the COVID-19 crisis was abysmal when you consider that instead of sending sick COVID-19 patients to the hospitals built by the Army Corps of Engineers in the Javits Center, Central Park or the U.S. Navy Ship Comfort, he sent them to Nursing Homes which led to unnecessary deaths in the thousands.
         But here in New Jersey we are faced with the continued ineptness of a governor who lacks practical hands-on business sense and private sector expertise.
         Now, think for a moment. What exactly is the hands on practical business expertise of the presumptive candidates for President and Vice President, Joe Biden and Kamala Harris? What business and economic experience do they have to lead our nation?
         The answer is none. But they have already announced that if elected, they intend to levy $4.0 trillion in tax increases, reverse all of Trump’s policies of eliminating regulations on businesses, cut military spending and tax transactions in the stock market. Is this the kind of economic climate you want for our country?
Email Link https://conta.cc/30U73Rs

About abyssum

I am a retired Roman Catholic Bishop, Bishop Emeritus of Corpus Christi, Texas
This entry was posted in Uncategorized. Bookmark the permalink.