In a devastating report on the fiscal condition of states across America, a report from the Pew Center on the States found that, along with California, nine other states are approaching similar crises.
This of course raises the question of if there is an economic recovery, how come these states are declining in economic and fiscal performance, rather than the other way around. The answer is of course they can’t be.
The other nine states included among the worst in the nation are Wisconsin, Arizona, Rhode Island, Florida, Illinois, Michigan, Nevada, New Jersey and Oregon.
California is obviously in the poorest economic condition of all the states, with poor money-management attributed as the major reason for its fiscal woes. Estimates by California Governor Arnold Schwarzenegger have the state running at a deficit of around $12.4 billion and $14.4 billion by January 2010. Schwarzenegger has also said the worst cuts for the state are still ahead.
For the states heading for economic disaster similar to California, there are several reasons given: historically persistent shortfalls with their budgets, rising unemployment, high foreclosure rates, legal constraints and heavy reliance on one industry.
Data was compiled based upon unemployment, changes in revenue, budget requirements and foreclosure rates as of July 31.
With over 30 percent of economic output represented by these ten states, and the inability to take care of their own needs, who is then leading the phantom recovery espoused by the Obama administration?
The industries in these states are contracting based on the analysis and data, as taxes are decreasing at a huge rate, confirming that reality. So if major states aren’t generating revenue, what states are in a way that could be identified as a recovery?
It’s not the auto industry in Michigan, which is unbelievably still afforded huge tax incentives to continue operating in the state, even though their radical unions and profits are a joke, as they operate at above-market wages which continue to decimate the state and it fellow citizens at the expense of this Detroit racket. The Pew study said that Michigan allowed $6.3 billion more in tax exemptions to the auto industry in 2009 than in 2008. As the study reveals, states like Michigan and their artificial propping up of an industry that creates what is similar to mono-agriculture, is not able to sustain itself when any type of economic crisis arises, as they don’t operate under market forces, so are susceptible to downward economic pressure when difficult times arrive.
Concerning why this reveals the need for limited government, it’s the making of promises by politicians which they can in no way fulfill over a long period of time, but which they hope doesn’t come due on their watch, as they usually suffer the consequences of having to compete in the real market through being booted out of office.
In other words, the only way they can fulfill the promises they make is if there was never a difficult economic time that comes about. Since that’s not possible under the current monetary policy in the country, this will be the way of life for a long time to come, and so promises made are empty over the long term, as many states are finding out now.
How are the majority of states dealing with the problem? Wrongly of course. They look at gimmicks and raising taxes as the usual they usually do when dealing with the inability to fulfill their promises. While they obviously must cut down on employees and services offered, they will go to the utmost to run on deficits until forced to deal with it like they are now.
A number of state legislatures were gutless in making decisions which would help in the long term, and rather than make tough decisions, now looked to the voters or through it on their governors in order to keep their political careers going forward. What a bunch of gutless cowards. Now they’re looking for the people to make decisions, when they should have recognized it was the people they on behalf of in the first place, and where they jammed social programs and other spending down the throats of their constituents. Now that the bills have come due, they’ve passed them on to those they can use as scapegoats like the governors, or to the people themselves who, for the most part, don’t understand the reasons behind it.
So now the job losses continue to grow, with some estimates at true unemployment (including the underemployed or those who have stopped looking for jobs) at around 22 percent. Promises made for government health care and social programs supposedly enacted for safety of citizens are now underfunded or operating a losses. That can’t go on forever.
Oh, but I forgot, we’re in a recovery so it really doesn’t matter.
