Nearly 25% of N.J. Residents Lived in Poverty in 2010

This report is more realistic than the federal standard for measuring poverty – which I believe is outright ridiculous no matter where you live in the U.S. – N.J. defines being poor as making less than $36,620 for a family of three — twice the federal poverty rate. New Jersey has a higher cost of living than most other states particularly because our exorbitant property taxes, which also reflect on rental costs.

Nearly a quarter of N.J. residents lived in poverty in 2010, study shows | NJ.com.

There are a number of factors which have contributed to this imbalance in one of the richest states in the nation. But all the factors, fundamentally, find their roots in the complicity of the two dominant political parties in holding wages stagnant and fleecing the public. In other words: A lot of people, even those not comprised in the low 25%, are making too little money and paying too much to the political octopus that rules New Jersey.

Note that the 2000 or so government entities of New Jersey devour more than 10% of the state GDP of about $650 billion. And we do not even have defense expending!

This reality has had two major consequences after two decades or so:

1. A lot of people borrowed beyond their means to maintain the illusion of prosperity.

2. Disposable income plummeted and with it went aggregate demand, thus pushing the economy into an endless period of anemic performance.

Since government – and all its local subdivisions –  also borrowed left and right, New Jersey has entered a period when the high degree of leverage has the effect of quasi paralyzing both the public and private sectors. There are budgetary problems and people are taxed out. Even if millionaires are taxed, as the democrats call for, that additional revenue would amount to considerably less than $1 billion.

The millionaire surtax has become more like a political football to keep the masses distracted and pretend that there is a major difference between the two dominant political parties. It is theatre.

The democrat-proposed increase in the minimum wage – possibly to blunt my message because I am the first who has mentioned minimum wage in the last decade – would be the first in I-don’t-know-how-many-years and it is clearly insufficient to have any economic impact.

Both parties have proposed tax reductions: Christie his ubiquitous income tax across-the-board cut, which of course favors his political base, and the democrats their property tax cut. Both plans are better than nothing; the democrat plan slightly better. But the grand problem is that the state is not in a sound enough fiscal position to – responsibly – adopt either plan.

If a tax cut – any of them – is implemented, it will amount to a tax deferment rather than a tax cut. When such tax becomes due, 10, 20 years from now, it will also come with accrued interest so we will end paying more for this meaningless relief today.

While both political parties endeavor in buttering up the voters in back-to-back election years, I am presenting  – in this website – my program of reforms, which I believe are the minimum essential to save New Jersey.

Citizens of New Jersey beware: Our problems are complex. Any politician that presents a simple solution to a complex problem is eminently dishonest.

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Newark’s Revival Hinges on Tax and Political Reforms in New Jersey

The GDP of New Jersey is about $650 billion. The total amount of taxes  – including property and sales, user fees, and tolls – that New Jersey residents pay to the government are roughly 10% of that: $65 billion annually. A middle class and a great city are not created by decree. It is highly unlikely that the middle class can grow in Newark and bring gentrification to the city when the same middle class is under pressure everywhere else in New Jersey. The income tax cut proposed by governor Christie – if implemented – would be just another blow to it.

Cory Booker on Newark creating ‘village’ for teachers: ‘This is how we reinvent a great American city’ : page all – NorthJersey.com.

Building a “Teachers Village” in downtown Newark obviously does not hurt the city but it does not address the root causes of the difficulties Newark faces nor will remedy the chronic shortage of qualified teachers in the Newark Public School System. When it comes to teaching staff, Newark is a revolving door. The education reform and weakening of tenure proposed by the Christie administration will also worsen this situation. The village is a band-aid on a hemorrhaging wound.

This administration has launched a frontal assault against teachers during the last two years. Without either a reasonable degree of job security or much higher pay, teachers may not commit themselves, with their families, to Newark. To add to the issues of job insecurity and pay, I understand that the crime statistics in Newark are not the best by any means. That is a consideration that any teacher will take into account when looking at the perspective of teaching in or moving to Newark.

The administration is also dedicating public funds to the construction of 3 charter schools in the complex. Diverting public funds to build private schools is wrong but if being done through the NJ Schools Development Authority, NJSDA, one of the many authorities  that allegedly serves as a nest of political patronage and I believe should be abolished, it eliminates the legislative oversight.

But in any case, the New Jersey Legislature has opted to cooperate with the administration in many of these questionable plans.

We can not solve the serious problems affecting our urban centers without addressing the structural problems in the entire state. The main issues are: property taxes and the redundant layers of government which must be reduced although reforms must go well beyond those two points to turn the state around.

Note: Although I have written numerous articles that apply to Newark and other cities, this is the first which belongs exclusively to Newark. Accordingly, I have created a distinct category: Newark.