NY State could face its worst hardship since the Great Depression, warns NY Governor David Patterson
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NY Gov. David Patterson on the State’s Economic Emergency
August 21, 2008 3:00am by Barry Ritholtz
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Lose the
It isn’t called a budget for nothing. I know it’s terribly inconvenient but spending more than earnings is not catually sustainable. When will The US face up to this inconvenient truth and why can’t Washington rise above the next election. These times require some visionary leadership?
Sadly many governments at all levels are run myopically….massive spending/tax breaks/wage-pension increases/cronyism when times are flush, then projecting those economic times 10 years ahead.
When the inevitable recession arrives, massive fiscal deficits that exacerbate downturn when some Keynesian stimulus would be appreciated.
At least that’s the case in Illinois/Chicago, home of the corruption/nepotism/”donate-to-play” on a banana republic scale.
Maybe higher taxes during recessions will finally wake people up to the problems that were ignored when times were better.
Sigh, my morning rant.
Welcome to Michigan…er, New York.
Philipat,
This is the old saw that I have to voice on my soapbox…it is a budget…and one, if not really all, these problems can be traced to lack of a national budget.
What would a balanced budget amendment to the constitution do?
Immediately make U.S. credit more stable in the eyes of the world.
Immediately lower the cost of imports.
Immediately strengthen the value of the dollar.
Immediately make “nation building” harder to do, and therefore harder for us to be drawn into conflicts by wrong-headed thinking..
Immediately start lessening the massive debt burden on those who follow us and don’t deserve it.
Immediately make feeding at the federal trough probably a thing of the past.
etc.
you get the idea…and if not now, when?? When also will our elected officials quit overspending if not required by law to not do so??
Bruce in Tennessee
“Welcome to Michigan…er, New York.”
…and California.
hmm, $1B in cuts, now nys is only in the hole $7B for 2008. how do you think nys will make up the gap? legislative bake sales?
Want to change government… take away their money. Looks like the world is changing our government whether we like it or not. If only the people had a say in government.
I wonder if Governor Patterson is aware that it’s actually worse than he thinks.. with fraudulent shenanigans such as this. hat tip: Denninger. If he wants to make serious inroads and impress the public, start putting some people in jail. There will be a continued erosion of public confidence until this “stuff” (below) ceases.
……………………
An article in The Economist points out that a large percentage of the debt allegedly “sold” in recent auctions wasn’t sold at all – it was part of an elaborate scheme known as a “switch”:
“The banks that manage the agencies’ debt issues are pulling out all the stops to ensure their success—even to the point of artificially boosting demand through deals known as “switches”. In such an arrangement, an investor agrees to buy into a new issue in return for being able to sell back to the banks an equal amount of an old one, thus ensuring its net exposure does not rise. If enough of these deals are struck, large amounts of debt can be shifted even when demand is thin. A recent $3.5 billion issue by Fannie was helped along by “very significant” amounts of switching, says one banker involved in it. With a quarter of the agencies’ debt due to mature in less than a year, those charged with peddling it will have their work cut out—especially if the Asian investors continue to be put off by unkind headlines.”
http://www.economist.com/finance/displayStory.cfm?story_id=11958334&source=features_box_main
saw it live while reading my local paper … I thought it was dangerous pleading so close to national conventions
these are times to keep money circulating close to home – I think local banks (somebody) need to start think tanks and cartels to circ activity at home – seems there isn’t enough to go around and blow on others
and Bruce right on …
the Balanced Budget Amendment is tough love and entirely needed … but TOUGH LOVE for the addicted
OR how about another system ALL TOGETHER
and Gov David best wishes
and Elliot I don’t blame you one bit for the personal lingerie show to escape this mess … worked great
“When also will our elected officials quit overspending if not required by law to not do so??”
They ARE required to do so…if they want to get re-elected, that is.
Which brings the topic of those who elect said officials.
That would be…us!
We have expectations about the way we want to live. The last thing we want to hear is that our expectations are wrong and that we need to adjust to reality. We adamantly refuse to be denied, and that is that! And of course, there can’t be anything wrong with our way of life.
Every politician knows that, and act accordingly.
Remember GHW Bush? “The American Way of Life is not negotiable.”
Bottom Line: The problem is us, the people.
If NY didn’t absolutely, utterly, depend on the financial sector for its budget, the state might not do so poorly.
Oh well.
Outside of NYC, the state was already in the crapper when times were good. Anyone you talk to around here is either
(a) a teacher
(b) employed by the government in some way (construction, police, corrections officer, etc…)
(c) in retail to support (a) and (b)
Go to the downtown in Elmira, NY. Look at how many storefronts are boarded up.
This should be fun.