Somebody forgot to tell the Stock Market today that our State and Local Governments are facing a ENORMOUS fiscal emergency. Deficits are already HUGE and growing by the day.
California is wrestling with a deficit that seems to be so large that even firing all the state employees won't balance the budget. The city of Vallejo already went bankrupt.
Georgia tax receipts decreased by 11% in the last month of the fiscal year while only down 1% over the whole year.......clearly a sign the deterioration is accellerating.
Now another biggie......New York:
In a televised speech a few minutes ago, Gov. David Paterson announced that he would be calling back the legislature on Tuesday, August 19 for an “emergency economic session.”
When he came into office in March, this year’s projected deficit was $5 billion. Now, the estimate is $6.4 billion.
That is $1.4 billion higher in only four months. The combined budget deficit estimate for the next three years has gone up to $26.2 billion from $21.5 billion, a 22% increase in less than 90 days.
Last year, the top 16 banks paid $173 million in taxes last year; this year, its $5 million, a 97% decrease.
Paterson: “The fact is, we confront harsh times. Let me be honest. This situation will get worse before it gets better.
The above only addresses state issues. County and City issues are just as bad if not more dire.
Revenues are evaporating to our local governments. There is trillions in municipal bonds dependant on those revenues. Insurance backing those bonds are now suspect.
Non Federal governments can only use their taxing authority or borrowing capacity to meet its budget requirements......many many states are now facing HUGE budget shortfalls......and seemingly growing by the week. How are they going to pay their employees and make bond payment obligations? Should we simply screw the bondholders?
How far will services and jobs have to be cut back and what impact will that have on the economy. Businesses are already shutting down due to lack of revenues.....will governments be forced to shut down??????
And they are projecting the Federal deficit to be half a trillion???? Anyone want to buy a bridge in the Sahara?