insolvency

[Neotrotsky]

Another failed Democrat-machine-run state government or Illinois on the brink of insolvency


CCB Embed Player

 

[Truthmatters]

The fact that the entire world is in a deep recession has nothing to do with it huh?

 

[Neubarth]

The fact that the entire world is in a deep recession has nothing to do with it huh?

Recession????

Actually Depression is the operative word.

 

[Neotrotsky]

The fact that the entire world is in a deep recession has nothing to do with it huh?

The whole world? Like China?

China's growth accelerates to 10.7 percent in 4Q



So these problems are facing every state in our Union?

 

[Neubarth]

The fact that the entire world is in a deep recession has nothing to do with it huh?

The whole world? Like China?

China's growth accelerates to 10.7 percent in 4Q



So these problems are facing every state in our Union?

China's growth is totally bogus, just like our GDP numbers. Yes, with their spending the Chinese have put people to work. They are working producing product that they can not sell. When they run out of storage capacity then what happens? Remember the biggest part of the Chinese economy is producing products for export. To see what is happening to International Shipping of product, all you have to do is look at the Baltic Dry Index, or look at DRYS. The reality will scare the shit out of you.

 

[Neotrotsky]

The fact that the entire world is in a deep recession has nothing to do with it huh?

The whole world? Like China?

China's growth accelerates to 10.7 percent in 4Q



So these problems are facing every state in our Union?

China's growth is totally bogus, just like our GDP numbers. Yes, with their spending the Chinese have put people to work. They are working producing product that they can not sell. When they run out of storage capacity then what happens? Remember the biggest part of the Chinese economy is producing products for export. To see what is happening to International Shipping of product, all you have to do is look at the Baltic Dry Index, or look at DRYS. The reality will scare the shit out of you.

Overstated- most likely but not all bogus

The op question is of the state of Illinois. While the economic slowdown may have exacerbated their problems, it is not the main cause of their problems.

 

[ihopehefails]

The fact that the entire world is in a deep recession has nothing to do with it huh?

A little but most of it is that most blue states can't stop spending and I say let them die. Honestly it is survival of the fittest and if your genes don't mandate survival then do what God's natural selection process wanted to be done.

 

[The Rabbi]

The whole world? Like China?

China's growth accelerates to 10.7 percent in 4Q



So these problems are facing every state in our Union?

China's growth is totally bogus, just like our GDP numbers. Yes, with their spending the Chinese have put people to work. They are working producing product that they can not sell. When they run out of storage capacity then what happens? Remember the biggest part of the Chinese economy is producing products for export. To see what is happening to International Shipping of product, all you have to do is look at the Baltic Dry Index, or look at DRYS. The reality will scare the shit out of you.

Overstated- most likely but not all bogus

The op question is of the state of Illinois. While the economic slowdown may have exacerbated their problems, it is not the main cause of their problems.

Zackly. So Carolina and Texas seem to be doing just fine. States that have prudent budgets are having tough going but making it. States that over spent are going to be begging.

 

[RetiredGySgt]

China's growth is totally bogus, just like our GDP numbers. Yes, with their spending the Chinese have put people to work. They are working producing product that they can not sell. When they run out of storage capacity then what happens? Remember the biggest part of the Chinese economy is producing products for export. To see what is happening to International Shipping of product, all you have to do is look at the Baltic Dry Index, or look at DRYS. The reality will scare the shit out of you.

Overstated- most likely but not all bogus

The op question is of the state of Illinois. While the economic slowdown may have exacerbated their problems, it is not the main cause of their problems.

Zackly. So Carolina and Texas seem to be doing just fine. States that have prudent budgets are having tough going but making it. States that over spent are going to be begging.

I am not so sure North Carolina is doing so good.

 

[editec]

It takes a particualrly blinding case of political partisanship to try to cast this mess as something limited to mistake of the State goverments, regardless of what party you're seeking to denigrate by ignoring most of the facts.

Forty-eight states faced or are facing budget shortfalls.

• 
• At least 48 states addressed or are facing shortfalls in their budgets for the new fiscal year totaling $190 billion or 28 percent of state budgets. This includes $34 billion in shortfalls that have opened up in at least 39 states in just the few months since they passed their 2010 budgets, forcing these states — all of which took major steps to balance their budgets — to consider further action to address the additional gaps. (Some states have already addressed these new shortfalls.)
• At least 41 states have looked ahead and anticipate deficits for fiscal year 2011. Initial estimates of these shortfalls total some $97 billion for the 39 states that have estimated the size of their projected gaps. As the full extent of 2011 deficits becomes known, shortfalls are likely to equal at least $180 billion.

Combined budget gaps for fiscal years 2010 and 2011 are estimated to total over $350 billion.

States are using fiscal relief to balance their budgets.

• The $787 billion American Recovery and Reinvestment Act (ARRA) included approximately $135 billion to $140 billion for states to maintain current programs, which are being squeezed between rising demand for services and sharply declining tax revenues. The federal aid is enough to close, on average, roughly 30 to 40 percent of state budget shortfalls.
• These ARRA dollars closed 31 percent of New York’s budget gap and 37 percent of Virginia’s. Other states, such as Georgia, Maryland, Utah, Washington, and West Virginia report similar outcomes. States are closing the remaining gaps with a mix of spending cuts, revenue increases, withdrawals from reserve funds, and other measures.
• Despite these changes, most or all of these states are making other cuts in their budgets, which the federal legislation will be insufficient to reverse.

At least 43 states have cut a range of services, including those aimed at some of their most vulnerable residents. Also, more than 30 states have raised taxes and several are considering similar measures.

• At least 28 states have enacted or implemented cuts that will affect low-income families’ eligibility for health insurance or reduce their access to health care; at least 24 states and Washington, D.C. are cutting medical, rehabilitative, home care, or other services needed by low-income people who are elderly or have disabilities; at least 27 states are cutting K-12 and early education; and at least 36 states have implemented cuts to public colleges and universities. Also, at least 42 states and Washington, D.C. have proposed or implemented cuts to their state workforce. Since August 2008, state and local governments have eliminated 132,000 jobs.
• At least 30 states already have enacted tax increases, closed loopholes, restricted tax credits, increased tobacco taxes, raised tuitions, or implemented other revenue-raising measures.

The state revenue situation is rapidly worsening.

• To keep pace with the cost of services, state revenues must grow. But overall revenues last year were essentially flat and have weakened dramatically this year. The U.S. Census Bureau reports state tax collections fell 17 percent in the second quarter of 2009 compared with last year — the worst decline ever.
• Sales taxes are the largest source of state tax revenue, and they are declining due to the fall in both personal consumption and business purchases. Income taxes and other taxes are also falling as wages and investment income decline. According to the U.S. Census Bureau, income tax collections during the second quarter of this year fell by 28 percent compared to the same period last year. Continued job losses will depress revenues further.

States face other problems from the weakening economy.

• Employers are reducing jobs and cutting back on employer-provided health coverage. As a result, more families are turning to programs like Medicaid, which provides health coverage to low- and moderate-income families and is jointly funded by Washington and the states.
• State spending levels were relatively low even before this crisis. Aggregate state spending fell sharply relative to the economy during the 2001 recession, and it has remained below the 2001 level ever since. The funding cuts that states will likely make in the coming months will reduce overall spending further below 2001 levels.
• States have already substantially used budget reserves to address funding gaps, but these reserves are limited. States ended fiscal 2006 and 2007 with $69 billion in reserves each year, equal to about 11 percent of their budgets. Those are the largest reserves states have ever accumulated. But now states have used a significant portion of those reserves, and the remaining amount will not be enough to solve state budget problems.

source

 

[Toro]

Certainly, the spend spend spend crowd are at risk, however, I was reading an analysis the other day that generally, if you rank the states which had the biggest gains in home prices, that ranking corresponds with the states that have the biggest budgetary problems.

 

[code1211]

Certainly, the spend spend spend crowd are at risk, however, I was reading an analysis the other day that generally, if you rank the states which had the biggest gains in home prices, that ranking corresponds with the states that have the biggest budgetary problems.

That would figure as property taxes rise, the budgets to spend them would also rise. Once a program or wage grade level is in place, it's hard to back it off.

It's interesting that when a private business finds income shrinking, people are laid off and everyone left has to do more at the same or reduced wage rate. In the pulbic sector, it is assumed that each person is already 100% busy so to reduce the budget, programs must be cut. God forbid that public sector employees do more for less.

Anyway, when the housing values fall, the tax base once agin shrinks and the football fields that were just built are suddenly an unneeded expense instead of a project that we can finally afford. We do, however, have some beautiful new football fields at High Schools around the country.

 

[Neubarth]

Certainly, the spend spend spend crowd are at risk, however, I was reading an analysis the other day that generally, if you rank the states which had the biggest gains in home prices, that ranking corresponds with the states that have the biggest budgetary problems.

American growth in our states and cities is all about where the people go. In the states with the largest percentage of population growth, the states had to spend money to build infrastructure to support the population.This was usually done with income taxes and property taxes.

The populations shifts and rapidly expanding cities has been a strong reality in the past half century especially in the Southwest (Arizona, California, Nevada) and southern states (like Florida). Unfortunately, now, many of those states are seeing jobs fly away both to Southern lands and Never land.

Obama has refused to do anything about the evaporation of jobs other than hire a few more Federal Employees. His puny efforts have managed to save a few jobs, but there are no substantive job creations in the US that are a direct result of his efforts other than increased government inefficiency and bureaucracy due to limited foolish hiring.

We are so screwed

 

[The Rabbi]

It takes a particualrly blinding case of political partisanship to try to cast this mess as something limited to mistake of the State goverments, regardless of what party you're seeking to denigrate by ignoring most of the facts.

You can't lump all states together. States with strong Democratic majorities, like CA, NY, and MI, are in the worst shape--virtually bankrupt. States with strong GOP majoriies might have shortfalls but are generally in much better financial condition.

 

[AllieBaba]

Oregon is in bad shape, too. Thanks to the fact that our radically liberal government refuses to cut back despite the fact that they aren't bringing in as much money.

And get this...we are expanding health care and other programs to the poor...while our front-line state workers (welfare workers) have to take forced, non-paid furlough days, hiring freezes, and salary freezes.

Perfect logic. Our elected government workers, however, continue to get their raises and salaries for life.

 

[Neubarth]

It takes a particualrly blinding case of political partisanship to try to cast this mess as something limited to mistake of the State goverments, regardless of what party you're seeking to denigrate by ignoring most of the facts.

You can't lump all states together. States with strong Democratic majorities, like CA, NY, and MI, are in the worst shape--virtually bankrupt. States with strong GOP majoriies might have shortfalls but are generally in much better financial condition.

States with large minority populations are usually Democratic, so your analysis has some validity. Democrats are quite frankly the easy spenders while the Republicans are usually seen as less liberal in that regard. (we have to forget about Reagan and his 600 ship Navy).

Liberals have to become more conservative if we are going to stop the sucking at the government teat. I wonder if that is even possible. Can Liberals become more conservative, or will they become even more liberal???? (i.e. the Solution to everything is more government spending?)

 

[Toro]

I know here in Florida, the government has a $3 billion hole in a $70 billion budget. They papered over a $5 billion hole last year by raiding trust funds and accounting gimmicks, but the trust funds are empty now and I'm not sure if the accounting gimmicks will work.

The state is dominated by the Republican party BTW, but the problems in the state have to do with the housing bubble and unrealistic expectations for economic growth a few years ago, not the party in power.