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alstry (35.09)

Fiddling While Rome Is Burning

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November 21, 2009 – Comments (5)

"We are in dire circumstances," Paterson told reporters.

The governor said he thinks both parties in the Assembly recognize the seriousness of the crisis and suggested Senate Republicans are reluctant to go public with budget cuts they would make for fear of facing reprisals from voters.

"They estimate revenues that don't exist and they ovestimate what we could receive from areas such as Medicaid fraud recovery - I think it's irresponsible," Paterson said. As for the Senate Democrats, the governor says his guess is they "hesitate in putting out a plan because they don't want to be attacked for even addressing a dime of school aid cuts, so this is the - basically fiddling while Rome is burning, this is what's actually happening here."

http://www.cbs6albany.com/news/governor-1268665-state-republicans.html

If New York is in dire circumstances......America is in the ICU on life support.

A $2 trillion dollar deficit and our Congress is debating how much more they are going to spend on health care tonight?

It is absolutely amazing at this juncture in the crisis that this is not the central issue of CAPs.  Actually, one might posit that it should be the only issue on CAPs until the condition is stabilized.  If government imposed a 100% marginal tax rate, it would not be enough to come close to bridging the deficit.

There  is little doubt what is coming next...........................

5 Comments – Post Your Own

#1) On November 21, 2009 at 11:38 PM, jesusfreakinco (28.78) wrote:

Alstry - you are right that the situation in our states is very very serious.  Thanks for continuing to blog about it.

JFC

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#2) On November 22, 2009 at 2:48 AM, foolishdoog (< 20) wrote:

i somewhat agree. the next leg down will not be soon though. 2010 or 2011 i believe

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#3) On November 22, 2009 at 7:14 AM, alstry (35.09) wrote:

JFC,

Yes, the situation for the states is serious....very serious, but the situation for the Federal Government is much worse.

The Federal Government is simply a collection of states.  We are tracking a $2 Trillion ANNUAL deficit....and it is widening.  That deficit is what is driving our economy and much of the spending and earnings.

This behavior simply can't be sustained much longer.  The banks and the world will not permit it.....at that point, the President will be forced to make a very difficult choice.....

Let's leave it at that for now.

FWIW....the problems confronting America right now are not too much different than problems facing  many industrialized nations around the world.

 

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#4) On November 22, 2009 at 3:01 PM, alstry (35.09) wrote:

FORGET 50% UNEMPLOYMENT...HOW ABOUT 75%

For nearly 12 decades, the presence of the California Portland Cement plant in Colton has been as dependable as the rock it was built on.

For 118 years, the company mined limestone and used 3,000-degree kilns to turn it into clinker bricks, then ground the clinker into cement powder.

Mayor Kelly Chastain said the plant and its workers were part of the fabric of Colton's civic life.

So the layoffs Friday of three-quarters of the plant's work force rocked the area like of one of the dynamite blasts used to dislodge rocks from Mount Slover.

"It was a tough day," said James A. Repman, president and CEO of the Glendora-based firm.

Like any business driven by the construction industry, Cal Portland has had cyclical layoffs, Repman said. But he never has had to lay off this many people in one location before.

Ninety-four workers at the Colton plant lost their jobs. The mining of limestone stopped. The kilns were shut down.

Only 37 workers remain. They will continue grinding existing clinker into powder. But Repman said he doesn't expect mining and clinker production to resume at the Colton plant for years.

The economic slowdown has brought construction nearly to a halt. Demand for cement has dropped from 25 million tons a year to 10 million tons, he said.

"Projects aren't getting built," he said, calling on state legislators to use federal stimulus money to put people back to work building highways, bridges and other infrastructure, as Gov. Pat Brown and President Dwight D. Eisenhower did in the 1950s.

"During those years, the state of California allocated nearly 20 percent of its budget (on) infrastructure for roads and water," he said in a statement. "Today we allocate less than 3 percent."

State Sen. Bob Dutton, R-Rancho Cucamonga, however, blamed environmental regulations for the job losses, particularly AB 32, which calls for measures to reduce the state's greenhouse gas emissions.

"We keep piling on more and more requirements that no other state is doing ... Then you wonder why companies are having to pull back and lay off," Dutton said.

Repman told a Senate committee earlier in the week that modernizing the Colton plant to meet the greenhouse-gas requirements of AB 32 would cost $250 million or more.

But even if AB 32 had been suspended, it wouldn't have prevented the layoffs, Repman told me by phone. The construction slowdown killed the jobs.

Regulations aren't the straw that broke the camel's back, he said. The economy is.

Repman said the state has been slow to spend stimulus money: It received $2.6 billion but had spent only $90 million as of Oct. 31.

That's a disgrace. Dutton told me he will look into it.

He and Repman both say regulations are driving companies out of the state. But I hope the environment isn't sacrificed to keep jobs. Both deserve to be saved.

CEMENT DEMAND DOWN 60%!!!!!!  WHILE RUNNING A $2 TRILLION DOLLAR DEFICIT

THIS IS NOT YOUR ORDINARY DEPRESSION.....WE HAVE ENOUGH BUILDINGS FOR THE NEXT 20 YEARS!!!!!

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#5) On November 22, 2009 at 10:33 PM, jesusfreakinco (28.78) wrote:

Al,

The only difference between the Fed and states is the Fed can print money - states cannot.

I agree that the Fed situtation is bad.  If our creditors still allow us to print money, the Fed situation can be prolonged, but am not sure how much longer this is likely.

States, counties, and cities are hurtin for certain and have some tough choices ahead.  The riots by the students in California are the tip of the iceberg about what lays ahead throughout the nation

JFC

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