Posted on 11/27/2002 7:23:35 AM PST by Sparta
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© 2002 Creators Syndicate, Inc.
That 70 percent fall in the NASDAQ and 25 percent decline in the Dow, and the recession and unemployment they produced, have begun to cause major collateral damage to municipal and state budgets.
The Empire State and the Big Apple are staring at a combined deficit of $15 billion, "a crisis of historic proportions," says the Washington Post. Rudy Guiliani's successor, Michael Bloomberg, has watched his popularity plummet to 41 percent, as he proposes raising property taxes 18 percent, piling $3 billion in income taxes on commuters, raising subway fares a third and putting tolls on the Brooklyn Bridge.
The salad days of the Clinton Decade, when the tough decision facing mayors and governors seemed to be whether to spend surpluses on raising teachers' pay or cutting taxes, are over.
The 2001 recession cost 2 million Americans their jobs. It has bitten into tax revenues nationwide and forced higher spending on social services. The bear market has killed the goose that laid those golden eggs called capital gains. And with the U.S. trade deficit over $450 billion, the U.S. manufacturing base – a cornucopia of tax revenue – continues to hollow out.
NAFTA and GATT, the trade deals beloved of the Beltway elite and the multinationals, continue to suck out of America the manufacturing jobs that were the on-ramp to the middle class. This is a central cause of the crisis of upstate New York, over which our pro-NAFTA politicians so copiously weep.
The fat years are over; the lean years are here. While congressmen may have managed to draw up districts so safe that only one in 20 House races is competitive, governors of both parties will spend this present decade on the endangered species list.
New York's crisis, however, pales beside that of the Golden State. Having spent California's cut of Big Tobacco's future profits – to close a $23 billion deficit in this election year – Gov. Gray Davis is now staring at deficits stretching to the end of his new four-year term.
"Hold onto your wallet," warns Nancy Sidhu of the Los Angeles Development Corp. LADC projects "a deficit of $6 billion this year, at least $21 billion in 2003-04 and between $12 billion and $16 billion annually for the next six years."
Adds the Financial Times, "The near-term deficit, approaching 25 percent of California's annual spending, is the most extreme example of the fiscal blight spreading through other states and down to local authorities." Davis' budget crisis can be traced to two causes: loss of 200,000 manufacturing jobs in two years and the devastation wrought to the software industry of Silicon Valley.
But something more ominous is happening to California, akin to what happened to New York after the war. Folks are simply packing up and pulling out. Middle-class Californians, uncomfortable with the radical ethnic changes reshaping the state and weary of the tax load, are leaving for good. In the 1990s, for the first time in history, there was a net out-migration of native-born Californians. Two million left. And as high-income Californians depart, to be replaced by low-wage Latins and Asians who consume more in services than they pay in taxes, California's deficits will explode. And as Gray Davis tries to salvage social programs by squeezing taxpayers even more, even more taxpayers will join the exodus.
California is inexorably headed for Third World status. Tax rates will have to be raised again and again, but immigrant folks picking fruit, working in kitchens and washing cars do not pay the same amount of taxes auto and aerospace workers did. Somebody has to make up the difference. And that somebody is packing up and heading east.
There is no end in sight to the substitution of a new and different California for the old California we all knew. California remains the first choice of final residence for one-third of the 1.5 million aliens who break into this country every year. In the counties of Los Angeles, San Bernardino, Riverside and Orange, poverty levels soared throughout the 1990s.
Meanwhile, the grandchildren of the Dust Bowl Okies who came west in the 1930s, and the grandkids of the veterans of World War II who came after 1945, are moving to Nevada, Colorado and Idaho. In the last decade, 225,000 left for Arizona. And as those states become more Republican, the Golden State becomes as reliably Democratic as Washington, D.C.
The 1990s were good years for Big Government. In Washington and state capitals, politicians bought popularity and re-election with their unanticipated windfalls of tax dollars. Now the spigot has been cut off. The coming budget wars in state capitals should make for some interesting politics.
That our economic prosperity and stability, along with our national sovereignty and security, is being obliterated by a mountain of debt.
More information here:
Remarks of Under Secretary of the Treasury Fisher to the Columbus Council on World Affairs
"And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."-- Thomas Jefferson to John Taylor, May 28, 1816
"I am not among those who fear the people. They, and not the rich, are our dependence for continued freedom. And to preserve their independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude."--Thomas Jefferson to Samuel Kercheval, July 12, 1816
And under the Republican Controlled House and Senate and White House, the 2000s seem to be even Better Years for even Bigger Government.
In the sense that Kalifornia has become Tiajuana-ized, your sister is right.
I expect to see the day within 10 to 15 yrs. when Calif. is the poorest state in the USA, behind Arkansas and Mississippi, and its famous automania giving way in some cases to donkey carts as in Mexico.
Banking "establishments" against which you rally has nothing to do with that.
American public loves debt -- in general. As a consequence, it load up on it in private, and elects officials that go into public debt. The current situation reflects fully the induring values and preferences of the American people.
Pat's books become best sellers and smart people are willing to pay for their great content. There is no better and honest writer anywhere - that is why people gladly pay him. Pat is only for American interests and that is why those with foreign trade or political interests want him silenced or marginalized.
As if such establishments don't engage in marketing disinformantion and "spin" regarding the financial condition of our nation.
It is the current level of being spoiled and ungrateful that is too high.
How do you think Bush is paying for this 42 billion dollar debacle known as Homeland Security? The Fed is printing money as fast at the presses will go. How do you think they are paying for that massive education bill, Farm bill? It will catch up, and it's will probably be called inflation.
We have a massive invasion of illegals over three million just since 2000 and no manufacturing jobs. All they are bringing with them is want and need for social services. I'm just so glad your portfolio is looking good, after all, this is all that matters right? This means you will have the resources to move to some safe country when the powder keg your sitting on ignites. Bush has ok'ed Mexican trucks coming into America, their main cargo will be illegal aliens.
The liberals in Cali and NY may not mind the invasion going on, living in their gated communites, but on the other side of those gates civil war, riots and revolution is on the horizon. They better have really strong gates. Bush has about as much chance of having me vote for him again as a snow ball has in Saudi Arabia. But of course if your portfolio is in good shape, you should vote for him again, for the children, everyone's but yours that is.
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