No Chance of Second Half Recovery....Cities and States Running out of Money
June 06, 2009
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As a matter of fact....we will likely see a dramatic slowdown!!!!!!!
June 5 (Bloomberg) -- Alabama’s most populous county is preparing to stop road maintenance, close courthouses and shutter services for the elderly after a court struck down taxes that pay for about 35 percent of its budget.
Minnesota's top state finance official on Thursday formally notified Gov. Tim Pawlenty that the state will not take in enough money to pay its bills over the next two years, setting the stage for the governor to start using his executive power to unilaterally cut spending.
Declaring that "California's day of reckoning is here," Gov. Arnold Schwarzenegger said today the state should turn its dire budget straits into an opportunity to make government more efficient......"Our wallet is empty. Our bank is closed. Our credit is dried up."
"Every city is in trouble," said Marc A. Levinson, the lead insolvency lawyer on the Orrick Herrington & Sutcliffe team handling Vallejo's bankruptcy filing.
The Insitute of Alstrynomics was not sure what Charman Bernanke was smoking when he said subprime was contained last year or whether he is smoking the same stuff this year when forecasting a second half recovery.....
Consumers are 70% of the economy and consumers are getting cut and cutting way back....evidence is everywhere including rising unemployment, massive wage cuts, increasing foreclosures and delinquent mortgages, horrible May retail sales numbers, imploding consumer borrowing and rising bankruptcies.....other than the above and some other known headwinds, the consumer looks strong for the second half.........and I could use some of Benny B's tobacco.
Compounding a strained consumer is bloated nationwide State and Local government infastructure that is running out of money.....RAPIDLY RUNNING OUT OF MONEY.....Billions and Billions in deficits that simply can't be funded that will likely result in cuts of unprecedented proportions. The job losses could rise into the hundreds of thousands and the impact on the economy will be profound.....especially state and local funded healthcare and education facilities.
If the consumer is facing profound and increasing headwinds.....and now government is just starting with MASSIVE cuts assuring a negative effect on health care.......how can Benny B state anything but how difficult the future looks???..............if he wanted to maintain any strands of credibility that might remain.
Remember....Alstrynomics is about telling the truth and being right.....Economics tells you what they want you want to hear.
But if you want a happier perspective, may I respectfully recommend Deej or Donner's Blog....they both provide well articulated alternative perspectives.
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