How to Find the Real Recovery

Look to sales tax numbers. If there’s more sales tax being paid, then consumer demand – anywhere from 60 to 65% of total GDP – is on the way up. If not, then it’s on the way down. Simple enough, right? Well, let’s look at those numbers… (goes to look at numbers)

Oh dear. They’re not good at all.

Sales taxes in Texas are down 12.8% compared to this month last year, and this month makes five double-digit drops in sales taxes in a row for the Lone Star State. California’s even worse, and all states are in the negative in terms of comparing this year to last year. Ouch ouch ouch ouch ouch.

So where do the rosy estimates about national recovery come from? Surveys that ignore small businesses and favor weighting to major retailers who, after closing many stores, are seeing some loyal customers coming back to remaining outlets. But they’re not at all the whole story, as the sales tax receipts show.

9 thoughts on “How to Find the Real Recovery

  1. Diane Stout

    So if Texas is having such a steep decrease in sale taxes, how come we don’t feel the effects, as much as California? I know California is much “worse” but still it seems that Texas has gotten off pretty easy, relatively considering.

  2. Sagar Patel

    I think that California has always been going through rough times. Texas is just in the starting process of that… I’m thinking that the prices in about 6-7 years in Texas will be very similar to the prices and rates in California

  3. deanwebb Post author

    We’re just starting, that’s the truth. It won’t be as bad here as it is in California, as Texas has far less mandatory outlays in its budget. Also, our legislature isn’t as polarized as California’s. We will see some tough decisions in the years ahead, though, as sales tax revenues fail to provide sufficient funds for government programs.

  4. Ali Aenehzodaee

    Well California has also had double digit growth for the past 20 years, haven’t they? And with a decline in sales of everything luxurious, they’ve been bound to fall.

    So you’re saying that large business are pretty-ing up the numbers?

  5. David Truong

    I don’t think we are in recovery yet. We are just getting less and less worse, which is in turn announced to the public as a recovery to boost consumer confidence.

  6. David Liou

    Wouldn’t the consumer confidence caused by the false recovery just rack up more debt, since consumers don’t have money?

  7. David Truong

    I’m sure some do have it and decide to spend less. Then confidence goes up and they spend.

  8. chanel wan

    Like David said, consumers are not fully behind the economy and are looking out for themselves in the long run, because if they spend now they would get hurt more now due to the recession we are in. And in order for consumers to spend more the economy has to at least raise a little at a steady pace so people like us say oh the economy is getting better yay!!! there goes our confidence boost and we spend the money we have cause we have faith that the economy won’t bottom on us so we spend. which means a boost in GDP cause we are increasing the demand of goods.

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