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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Contrary to National Trend, Curve of Foreclosures in New Jersey Points Up

“New Jersey officials estimate 50,000 to 100,000 previous cases are still pending.”

NJ Spotlight | Foreclosures in New Jersey in a Troublesome State of Flux.

Of course there are a number of reasons for such a sorry condition. However, two causes that stand out are:

1. Our huge property taxes which in many instances amount to the equivalent of second mortgages and:

2: The New Jersey economy is more stagnant than the national economy – in spite of the “New Jersey Comeback” fairy tale.

The potential consequences of this housing trend in our state are to be measured in both human and fiscal terms. In the first, we will have more homeless families, more broken homes, more children living in poverty, etc.

In the fiscal area, as more homes are foreclosed, property values tend to decrease, bringing more homeowners to give up on their de-valued homes, when their pre-recession mortgages sink deeper under water.

To a degree, the approaching wave of foreclosures could have a snowball effect on the economy of New Jersey. That is foreclosures trigger more foreclosures and additional economic strains: Less consumption, more pressure on social services, less tax revenue, etc

With housing one of the main residual industries in the state, this phenomenon will stall any significant growth that other niches of the economy may achieve.

Abolishing property taxes for primary residences and some commercial property in New Jersey, as I propose (please refer to Pages for details) is almost a matter of survival for our state. Zero property tax would have a lifting effect on property values almost immediately.

I am not proposing such drastic reforms as I have been doing for 2 years because I want to make a mess of things: They are desperately needed. That is the only reason.

N.J. Property Taxes Are the Worst Enemy of Senior Citizens

NJ Spotlight | Assembly Bill Would Help Neighbors Grow Old Together.

The bill, although not bad in concept, is a miserable band-aid on the gaping wound that property taxes open on family budgets. And among the most vulnerable and often financially stressed households, those led by seniors are at the forefront.

The reality is that seniors in New Jersey are often forced from their homes by property taxes that surpass – and outlive – their mortgages. Unlike mortgages, which eventually are paid off, property taxes never go away and continue to increase year after year. If we add the actual direct increase in property taxes during the first two years of the Christie administration and the indirect increases caused by the elimination of the State property tax rebates, we arrive at the massive increase of 20% in 2 years. That is scandalous and it has had the effect of pushing numerous seniors out of their homes, or at the very least under the poverty line – in terms of disposable income.

Then governor Christie has the nerve to climb on a podium and claim that he has balanced two consecutive budgets without increasing taxes!

The most effective way of helping all New Jersey seniors to remain in their homes is by abolishing property taxes for the primary residence of all New Jersey taxpayers. I will be the only gubernatorial candidate who will propose such a reform of our tax system in 2013. The elimination of property taxes for most will also have the desirable effect of raising property values and increasing demand for homes. Property taxes are suffocating our economy,

Simultaneously, I offer a well thought and balanced alternative to fund education and municipal governments. Local services would not be touched. County governments would be abolished although many of their departments and their schools would remain. County governments account for over 20% of the total property tax levy in New Jersey. A large portion of that money goes toward consulting and brokerage firms which in turn are heavy contributors to election campaigns. That is one of the pillars of political control.

These changes I propose would involve one or more amendments to the State Constitution and would undoubtedly meet strong resistance in the New Jersey Legislature.

French Presidential Election Could Affect Ours – La Recette – Video

Presideo – La présidentielle à la sauce CNN.

The French presidential election takes place this summer and its results could influence the fate of the euro zone, the European and world economies including our own, and ultimately the election of the next president of the United States in November 2012.

There is so much at stake in the French election that for the first time in history, we see a German chancellor – Merkel – actively campaigning for a French president – Sarkozy. Bismarck and DeGaulle must be turning in their graves.

By comparison, here in the U.S. we have two onions – republicans and democrats – and one chili pepper – Paul – in onion batter.

For London Youth, Down and Out Is Way of Life – NYTimes.com.

The situation for the American youth mirrors that of Europe except that we are much more honest and open when we talk about the shortcomings and difficulties of everyone else. Blame jingoism and the U.S.A. number 1 thing. But actually the two parties have a vested interest in hiding the crude realities, as we can see here in New Jersey – just one example – with education reform and NCLB; there is a deliberate attempt to ignore the crude realities of poverty, broken families, the lack of the education “culture” – even the mainstream media continues to glorify the drop-outs who made it big while it should be emphasizing that those individuals were the exception to the rule.

The epilogue of this story today is this: New Jersey is lagging in almost every economic parameter with respect to the nation.

Legislature Can’t Wait to Spend Money that Just Came In

S1566.

At issue is dealing with the increasing number of foreclosed properties and the lack of affordable housing for the poor. Never mind that the crisis is brought about by the increasing number of the poor; not the decline in the number of housing units. New Jersey just got some money from the federal settlement with banks and the Legislature can’t wait to spend it as if the cash were hot coals burning through their pockets.

In this case, it is the democrats who lead the charge toward fiscal debacle. The approach sounds very logical at first glance but the devil is in the details and above all, the application. Will the new agency be managed by professionals or just serve as refuge for more political hacks who may bungle everything? Depending on the execution of the plan, this could be a success story or just another sorry show of government waste.

And once properties are bought and refurbished with public funds, who is going to purchase them? The fundamental problem we face is not lack of housing; it is that people can not afford the housing. That means that we have a deficiency in wages and jobs.

And then comes the issue of property taxes: Too high for all but particularly onerous for those on fixed or of low income. If property taxes are abolished – as I propose – that would change the picture. The quandary is that, to be in compliance with the Mont Laurel decision, as the standards of living of many New Jersians decline, we must lower housing costs as well. But as the standards of living continue to decline, how can we keep up with ever lowering housing costs? Of course it is an impossibility.

Housing costs, for the owner or renter, are a partial function of property taxes: The higher the tax the higher the cost of living in the house.

Enter then the public safety issue: If anyone thinks that by fixing houses, the security situation improves, think again. That is not how it works. Fresh paint does not deter crime.

The advantage of not having property taxes is that renovators/speculators/investors or whatever you want to call them can purchase foreclosed homes at today’s low cost and fix them up at a much lower risk because the property taxes won’t be draining them while they wait for a buyer or renter. So there would be much more activity in that market with the lower risk.

But the problem is urban areas is different. The security issue must be addressed before the housing renewal happens. Private capital is not attracted to crime-ridden areas and the government can not supplant the private sector. The State of New Jersey simply does not have enough money for that.

Senators Lesniak and Buono are counting on the bonding authority of NJ HMFA – that means more borrowing. Yes, we balance the state budget every year but the independent agencies are bonding the state’s future right and left. Every independent authority bond is backed by the good faith and credit of the State of New Jersey. I hope everyone knows that.

The Norm: Student Achievement Gap = Socio-Economic Gap in New Jersey

Students’ test scores divided by socio-economic gap in New Jersey – pressofAtlanticCity.com: Breaking News.

Regardless of the unquestionable parallel course run by achievement and socio-economic status, the governor, his education commissioner, and some democrats in the legislature continue to build a house of cards with all the proposed reforms of tenure, teacher performance tests, and bankrolling private schools with public funds.

Searching for the inefficient teacher for this crowd of “Reformers” has become the equivalent of the search for the Loch Ness Monster.

Then we have “No Child Left Behind” which essentially puts the classrooms in convoy mode, holding the pace to the slowest element. The classrooms should aim for the stars and instead they are forced to aim for the lowest common denominator.

As the “Reformers” want it, New Jersey classrooms will become centers dedicated to pass standardized tests and schools will become nests of fear, insecurity, snooping, suspicion, and political patronage. The joy of educating will become a thing of the past, like the model T.

I do not believe that social programs eradicate poverty. Social program are a palliative like I take aspirine when my head hurts. I believe that eradicating poverty is a long process which begins with abolishing entire  government layers, consolidating services, reforming our tax code to spur the economy, higher wages, and at the same time increasing the time students spend in school. The increase in schooling should probably be proportional to the level of deficiency encountered in a given group. But ultimately all students in New Jersey should study more – meaning longer time dedicated to education – every year.

There is no substitute for education but at the same time we should be able to discern which children should go on toward an academic and college education and which ones should move into technical and construction trades, apprenticeships, etc. Not being an educator, I hesitate to present a point of separation although some European countries do toward the end of the equivalent of our middle school.

Closing the achievement gap – and the economic gap – will be an almost generational process but I am willing to start setting up the foundations.

I want to end this article with a piece of good news. Let’s hope this continues:

Unemployment Drops to 8.3%; Payrolls in U.S. Jump 243,000 – Bloomberg.

New Jersey: The Myth Behind Christie’s Education Reform

NJ education chief: Be tougher on failing schools : page all – NorthJersey.com.

The responses of the New Jersey Acting Education Commissioner (AEC) in this interview with the Associated Press (AP) show the gap between policy and the reality it pretends to be attempting to correct: The only common denominators for all the failing school districts are predominant races and income. Likewise, the common denominators in the best districts are again predominant races and income. There is a correlation between income and school district success. The relationship is almost linear in the case of income.

However, the AEC squarely places the blame on the educators and omits the common denominators.

Can all the teachers in the failing school districts be below average and all the teachers in the successful school districts above average? Is that distribution of quality and professionalism logical? Certainly not. But the most notable dexterity shown by the Christie administration has not been in correcting problems but in tailoring data and argument to fit a preconceived ideological position.

Now, with all the tremendous injustice that such a distortion commits against the teaching profession at large, still the main problem for New Jersey is that such distortion takes us away from truly addressing and solving the real problems.

The AEC mentions Camden and Bergenfield in his responses. If we take the teaching staffs of the two cities and swap them, does anybody seriously believe that the scholastic results will reverse themselves as well? Would Bergenfield become a failing district and Camden a model in scholastic achievement? If teacher quality were the predominant factor – as Christie/Cerf argue – the answer to the latter question would be yes on both counts.

Does the AEC believe that? Does governor Christie believe that? Of course not; not for a moment. The entire approach of this administration to education reform, tenure, and merit pay is simply false. And it is damaging too.  There are no other ways to label it.