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Wednesday, November 11, 2009
5:22 PM TweetThis
  • If you thought California was a mess, Pew Research has a table of the nine other states (who, remember, can't run a deficit as easily as the federal government can and must slash services) "barreling toward an economic disaster" as tax revenues take a dive.
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This news story has 14 comments:

  •  
    Print more money & done...
    Nov 11 05:28 PM | Link | Reply
  •  
    Illinois speeding toward budget disaster, study says bit.ly/16mTfM , ETFDesk users see this as a potential opportunity to: sell $MUB $NUV
    Nov 11 05:43 PM | Link | Reply
  •  
    I have this sick feeling that the Government will somehow bail out the states..they are Democrat states...they want to keep the votes...but this will be the camel back breaker with the rest of the world who will finally realize they will soon own squat in their treasuries...
    Nov 11 05:57 PM | Link | Reply
  •  
    Quick throw a flight suit on Bernanke and have him run up and down the hallways screaming "Recession's over!!!"

    yeah, that should work..
    Nov 11 06:29 PM | Link | Reply
  •  
    Nasty picture, that's for sure. Note that Florida gets a B-, best of a bad lot of grades. SInce they are the only state in the list that has no State income tax, does this give them an advantage (relatively speaking)?

    I wonder what effect transfering the other 9 to a system similar to Florida's would do to that chart? Sure, Florida is in deep because of their real estate bubble popping, and so are all the others to one degree or another, but I would be curious to see that sort of analysis.
    Nov 11 06:37 PM | Link | Reply
  •  
    There is no problem here, move along people.

    The "stimulus plan" of spring 2010 will "fix it". You see the states CAN run deficit, they have the federal government to bail them out as long as they need. We have full pensions to pay to those who retire at 54 in the public sector... cmon what is fair is fair.

    More money Ben.!
    Nov 11 06:43 PM | Link | Reply
  •  
    After years of lavish spending, California is the worst. Business move out of state. CA citizens suffering. Service is lousy with many fees (taxes) and tickets.
    Nov 11 07:18 PM | Link | Reply
  •  
    On Nov 11 05:57 PM youngman442002 wrote:

    "I have this sick feeling that the Government will somehow bail out the states..they are Democrat states...they want to keep the votes...but this will be the camel back breaker with the rest of the world who will finally realize they will soon own squat in their treasuries..."

    Tons of treasuries are held by the banks purchased with 0% interest money from the government. So when the bubble pops, we'll wind up paying $100 for a loaf of bread (if we can find one).
    Nov 11 07:21 PM | Link | Reply
  •  
    As usual, you guys here at SA are clinging to your lagging indicators, hoping and wishing that the economy collapses, while the stock market keeps yelling at all of you, "NO! You are all morons!"

    And now for some logical analysis of the situation:

    So, I know all of you are thinking that all these states have these horrible deficits because of their huge spending, especially California, right? WRONG! Over the past few years all states have cut spending drastically, including California. It is the tax revenues that are falling. California's problem is so acute because its tax base is so heavily tilted towards the rich. When times are good their coffers are overflowing with money, but when times are bad, they REALLY become bad. And so it is not the spending that California must reform, but their tax revenue base.

    Second, yes the states and local governments need a bailout. Unless you are OK with them pulling cops off the street and stuffing 100 kids into a classroom? The fact of the matter is that "bailing out" states would be one of the most effective forms of stimulus because it wouldn't require any jobs to be created but would literally save existing jobs. And this state "bailout" was in the original stimulus package actually. It would have avoided what is going on with states right now. But unfortunately, that is the piece of flesh that Olympia Snowe wanted so she could vote for the stimulus.

    Oh and yes we can afford it and no youngman that won't cause any of our lenders to stop lending to us because they all depend on us.

    THE END

    P.S. Stop making economics a morality play!!!
    Nov 11 07:34 PM | Link | Reply
  •  
    "Tons of treasuries are held by the banks purchased with 0% interest money from the government. So when the bubble pops, we'll wind up paying $100 for a loaf of bread (if we can find one). "

    Nope, this won't happen. I wish economics was like sports. One team wins, and the loser must shut up and go away.

    Your prediction will never come true, but you will continue to make it. It could be 2050 and you will still be saying, "Hyperinflation is coming any day now"
    Nov 11 07:35 PM | Link | Reply
  •  
    Why do people always pull up the examples of cops and kids, when those are only a small part overall of the state deficit problems? One problem in most states is unfunded federal mandates - ie, "social programs" for the most part.

    Unfortunately, those cannot be cut without enraging the feds, so what does get cut is that 10-20% of the budget that is not locked in stone. Also, a large part of the deficit in many states is the massive increase - usually union driven - in expensive perks. Just one example is why are most law enforcement personnel allowed to fully retire after only 20 years in many states?

    My own state of AZ unfortunately is plagued by it's proximity to California, and much of the "let's do all things for all people" mantra has taken over in the past decade or two. At one time Arizona was very fiscally conservative, but since the mid 90's it has shifted much more to just throwing money at every problem - after all, state revenue went up 12% in 2006, so let's just figure it will go on forever and plan for doubling the budget in 2012 type of thinking.


    On Nov 11 07:34 PM Machiavelli999 wrote:

    > ...Unless
    > you are OK with them pulling cops off the street and stuffing 100
    > kids into a classroom? The fact of the matter is that "bailing out"
    > states would be one of the most effective forms of stimulus because
    > it wouldn't require any jobs to be created but would literally save
    > existing jobs.
    Nov 11 10:01 PM | Link | Reply
  •  
    Looking at 3 different states of those listed at random, the single biggest drop in revenue was the loss of corporate taxes, ranging from 17% to 26% from 2007 vs 2009. In the three states I could find data on, losses from income taxes were less than half of that.
    Nov 11 10:27 PM | Link | Reply
  •  
    welcome to free market. companies moving industries offshore and jobs, no money to spend
    Nov 12 12:56 AM | Link | Reply
  •  
    On Nov 11 07:34 PM Machiavelli999 wrote:

    > right? WRONG! Over the past few years all states have cut spending
    > drastically, including California.

    What source do you cite for this statement?


    > Second, yes the states and local governments need a bailout. Unless
    > you are OK with them pulling cops off the street and stuffing 100
    > kids into a classroom?

    Again, what sources do you cite for claiming that cops will be pulled off the street and 100 kids will be placed in a classroom? Alternatively, perhaps local government workers can do what we Johnson County employees did: take a pay cut.
    Nov 12 05:58 AM | Link | Reply
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