No one is spending any money anywhere.  Why?  Gas prices certainly play a role, but an economy riddled with uncertanty looms large in people's psyche. People live in fear of losing their jobs.  They have no idea what new tax, or better yet, "fee" will be levied to cover the state's deficit, which is growing at an exponential rate.  Neither do businesses, so they don't hire or expand.  It doesn't take a degree in Economics to be able to predict today's announced shortfall in tax collections.  H*ll, I'm one of them that is behind in sales tax.  I can barely pay my rent, much less vendors and taxes.  My staff has been laid off except for one part timer; I work 6 days a week, 10 hours a day, and pick up other part-time jobs just to make ends meet, and I'm not the only one.  Look for a number of small, family-owned businesses to close as the state steps up its tax collection enforcement.  I'm waiting to hear the Governor's reaction to that.  Will it be a "punch in the gut"? Or will it simply be spun as what happens to greedy business owners that refuse to pay their fair share?  

The Governor, in her misguided attempt to "nail" the so-called "rich", will cause even more economic damage to those she so stridently claims to defend.  Her rationale is that people who can afford to play golf and get massages or pedicures or haircuts must have extra money and therefore should pay more.  After all, mothers have to pay sales tax on the coats they buy for their chidren, so we should also tax golf and pedicures and massages. (This is what she said on Frank Beckmann's show Wednesday morning.  Now you know why I beat the dashboard of my car with my fist.)  Once again she demonstrates her complete ignorance of the basic rules of economics and the law of unintended consequences.

Let's look at those who are massage therapists and pedicurists and hair stylists.  The training they have is generally through a high school vocational program and augmented by post-high school programs via trade schools or community colleges.  These are not rich people.  They do not hold advanced degrees; their skills are not easily transferrible.

Get a haircut lately?  Ask your barber or hairstylist how business is doing right now.  I asked mine, and she is doing no better than I am.  Instead of a full schedule, she has two or three apppointments per day, and fills about 70% of her schedule on saturdays.  If this service tax gets passed, here's what will really happen:  Those who can barely afford to get their hair cut or pedicures or go golfing will simply stop doing it.  Those who can still afford it will dial back because it costs more to get done.  We'll have more unemployed barbers, massage therapists and golf course workers.  Just like the sales tax, uncollected revenues will increase;  the projected service tax revenue stream will fail to materialize as more golf courses and salons close due to a lack of business; the unemployment rate will increase and the demand for Medicaid and food stamps will increase, further straining state funded programs that are already on the brink of collapse.  

If I, with my little bachelor's degree and a "C" average in economics can comprehend this, why can't a Berkley-educated, Harvard Law graduate wrap her brain around this?  Why is this so hard to understand?