Posted on 03/29/2009 12:13:51 PM PDT by Lorianne
It is simply stunning that 44 states are facing shortfalls either for this fiscal year, or will come up short in 2010 or 2011. This puts virtually the entire country in a difficult financial situation. It is hard to understand how the media feels that the federal government is somehow better able to get money from people than states. The federal government’s largest income source is the federal income tax; yet this is income from employees in those same states were fiscal problems are running deep. The government is also going to have a challenging time taxing someone with no job right?
The combined budget gaps for the remainder of this fiscal year and then those of 2010 and 2011 are a stunning $350 billion. This number is simply jaw dropping and Wednesday’s horrific retail sales numbers tell us that this recession is already going to be the worst since World War II and possibly since the Great Depression. First, let us take a look at the situation on a map: [see map at source]
You’ll notice that the only state with a sizable population without a budget shortfall is Texas. The rest of the country is virtually in the same predicament. You also need to remember that many states project these figures. That is, many are probably too optimistic in their assessments. The retail numbers that came out today tell us that many states are going to be dealing with a horrible budget situation. That is why in the upcoming fiscal stimulus package there is a large portion dedicated to state relief.
Looking at the data, it looks like many states are just too optimistic and are betting on the 2nd half recovery which will not happen. This crisis runs deep and the actions taken by the Federal Reserve and U.S. Treasury put our U.S. dollar at risk. If there is a run on the dollar, it will leave us as a nation with very few options. State and local governments stand to receive $160 billion in federal aid with the new stimulus plan. But you have to ask where is this money coming from? Printing money.
I’ve combined the state data into a list to make it more viewable. Let us break down the problems by state for the 2009 fiscal year: [see chart at source]
First, 4 states with the most dire housing markets those of California, Arizona, Nevada, and Florida made the top 12 on the list. In fact, the number one state and most populace state in our nation California has the most troubling housing market in the nation that won’t see a bottom for many more years. Florida has a similar makeup to California in that it went down the path of toxic mortgages that are now going to be setting on new terms at the most dire time in our fragile economy.
Even should the states receive $160 billion from the historical stimulus plan, that will only address this current fiscal year. As analyst estimate, we are expecting additional fiscal shortfalls in 2010 and 2011 which will be on par or even worse than the current situation. Is the federal government prepared to do another major fiscal program when this occurs?
States with Highest GDP and Largest Population in Worst Shape
In a previous article I discussed that 40 percent of our country’s GDP comes from 5 states. Most of the population lives in these states as well but the important thing to note is that most of these states are also running with the deepest budget problems including California and Florida. Here is a look at employment situation in these states: [see map at source]
What people tend to forget is that these states have large consumers. So with retail sales falling off a cliff, how is this going to impact workers across state lines that ship merchandise to these locations? We are all connected. In fact, that is why $50 trillion in global wealth has evaporated since this financial crisis started.
Here are more estimates put out with the assumption that the economy improves in the second half of 2009: [see chart at source]
.... more at source
Hmmm...states with natural resources. WY, ND and MT have had coal and gas energy booms. WY has gas boom I think methane and nat gas?
Utah’s clean coal was made off limits when Clinton made it all a natl park for the Riady’s in Indonesia because they have that type of coal.
So bottom line why are the other states broke besides liberals:
1. Lack of natural resources or inability to get to them due to liberalism. no offshore drilling in FL or CA to name a few. $800 billion of our wealth goes off shore for energy. Probably $400 billion or more to the Saudis.
2. ILLEGAL ALIENS and the cost of illegal aliens.
Where did all the money go? Ouch.
Forgot to say AK has oil, nat gas, hydrate gas (if they can develop it), water and other natural resources. Gold?
Texas has offshore energy, creates wealth by value added to oil (refineries) wind power plus lots of power plants that export electricity to NIMBY states.
Where did the money go? A major place is: Endless freebies to illegal aliens.
Why can not the states just print ‘Special Emergency Currency’?
Seems like everyone else is doing it.
(By the way, if anyone wants Special First Edition Leisler Dollars, suitable for framing, and accepted for purchases at Lumbogo Mercantile and Auto Care, San Cristobal, Guatemala, and other fine retailers (most) everywhere, email me.)
Texas is full of illegals, probably more so than any other state.
But I think our illegals are different than everyone elses, because we’ve always had a large indigenous Hispanic population -— who work hard and love America. Makes all the difference.
I think Texas energy industry has paid for the endless benefits for illegals. BTW - what is the racial composition of the prison population in Texas?
Maybe.
But being in the oil business, our taxes generally don’t go for hospitals/schools — those are property tax driven. So I don’t think the oil helps us.
My drilling hands are overwhelmingly Hispanic (legal, or at least with good fake ID), and overwhelmingly great workers.
Blue colar whites can’t pass the drug tests.
I have no idea what the prison populations are, nor is it relevant to my point.
“Alaska, Montana, North Dakota, Texas, West Virginia and Wyoming”
Remind me, who did those states vote for in the last Presidential election?
“Alaska, Montana, North Dakota, Texas, West Virginia and Wyoming”
Remind me, who did those states vote for in the last Presidential election?
Texas and Wyoming have two Republican Senators but West Virginia, Wyoming and Montana have Democrat governors.
Simply looking at the votes for President is not the whole picture.
They make good tacos too.
Remind me, who did those states vote for in the last Presidential election?
All were Red States.
The Texas battle for Governor in 2010 will have major implications for the entire country. We cannot allow socialist-leaning Kay Bailey to unseat Good Hair.
Perry is certainly not perfect but he doesn’t have problems with the budget and he has handled the Stimulus well. KBH has stated that she would take the Stimulus money.
Kansas is in the hole for $1 billion. Our governor (soon to be your Secretary of HHS) appointed people to the state supreme court (I’m sure their campaign donations had nothing to do with it) who backed her on her demand to bankrupt the state to reward the teachers’ union.
Her confirmation can’t some soon enough...then she’ll be 0bama’s problem.
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