Posted on 12/20/2010 7:22:17 AM PST by SeekAndFind
While you’re watching this excellent 60 Minutes story on the coming implosion in state governments, remember one key statement about halfway through this from Steve Kroft: the Great Recession didn’t cause this budget insanity, it merely exposed it. The overspending has been going on for decades, especially in places like Illinois, California, and New Jersey, as well as ridiculous union contracts that have California spending more on its public employees than it does on the entire state-owned public university systems it operates. Illinois has gotten so bad that landlords are evicting legislators from their business offices and police officers attempting to put gas in the tanks of their patrol cars have their state credit cards declined at the pump.
Chris Christie makes it clear when discussing the rail project he had to cancel. “We don’t have the money,” Christie explains, “we literally don’t have the money.” He’s not the only one, either (via The Right Scoop):
The “ride to the rescue” in Porkulus didn’t produce any improvement in behavior. Instead of either facing the music and making cuts in expenditures — especially in reducing bureaucracies — the states used the Porkulus bloc-grant funding to paper over their budget gaps and punt on the hard decisions. The federal government shouldn’t have borrowed money to provide that fig leaf the first time, and they won’t get an opportunity for Round 2 fig-leafism with a GOP House.
That leaves the states on their own to do what they should have done years ago — cut spending and press for pension reform in the public-union contracts. Will the states finally take control of their budgets? If they don’t, prepare for another collapse in the banking sector.
CLICK ABOVE LINK FOR THE CBS NEWS VIDEO...
Great video.
I really wish he would run for President.
Obviously true, no more time for borrowing, and spending, it is now time for cutting and tough decisions or what will come certainly will be a more bitter pill...The commies will say its the fault of the republic and free eenterprise, but they have spent like drunken sailers trying to buy power..
Time to starve the beast and leave their money grubbing hands bloody at the nubs..
Granholm has left bombs all over the place and the idiot we elected is letting her help him deal with financial issues.
Seemed to be an odd piece for a leftist news organization to run — pointing out how the Dem entitlement mode/unions have run states and cities into the ground.
“Socialism works great until you run out of other people’s money.”
Margaret Thatcher
I watched this on 60 Minutes. This is why you need to be VERY careful in the Market. It’s a good time for quick gains, but be ready to sell at a moments notice because the stuff is coming home and soon.
God I am glad I live in Texas. I know the Prerry-haters on the board will be all over me, but for all his shortcomings he has kept Texas away from this trap.
For states, there is no way out except to, for one thing, eliminate pensions for new hires (give them 401K plans instead). Also do massive cutbacks and layoffs in state welfare programs.
I almost barfed when the 60 Minutes “reporter” mentioned that Christie and his predecessors were to blame for the pension shortfall because they had not made the contributions necessary to keep them in the black (where does the $$ to do that come from????). They also made mention of how he had cancelled the rail project that would have provided 6,000 jobs. While Christie was given the chance to say that he didn’t have the money to pay for the jobs they did mention the massive cost overruns on the project that would have saddled NJ with billions more that they simply cannot pay for.
NJ’s spending has increased 70% in less than 10 years which is about 7% a year growth. Tax revenues have to grow at that rate to sustain it which is indicative of a hyper inflated economy.
Greed is alive & well and lives in the public sector.
So the California GOP was very smart after all. Give the Dems total ownership of the State government at exactly the moment that the State implodes. GOP in Washington; Tea Party in the GOP - Good Luck with a bailout.
The government had better get the illegals out of the country NOW. There will be riots enough as it is, adding the illegal factor will make it much worse. It’s dangerous, seriously dangerous.
There are two choices. Either repudiate the debt or seize all that cash sitting in 401K and 403B plans.
Which one do you think they'll pick?
Harry Reid is planning to bring the inappropriately named, 9/11 Health care bill to a vote today. The bill is not really about health care of first responders. It is about union contracts and spreading the costs of those big city contracts across rural America.
Public debt... The Opium of the masses©
http://www.cbsnews.com/video/watch/?id=7166293n&tag=topnews
When 60 Minutes runs a piece that portrays Gov Christie as a prophet and a hero, you know things are about to collapse.
If you hold Municipal Bonds (anywhere) - sell them immediately.
My office mate told me the "solution" to avoid collapse would be for NJ to "triple" its property taxes. We already pay 5 figures for property taxes.
There is no way they can increase them to cover the pensions for public employees. If they were to "triple" them - there would be a revolt, and I mean it.
I saw it last night and I couldn’t believe I was watching 60 Minutes. They actually let Christie speak. Great story from an unlikely source.
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