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Almost Half Of US States Are Officially Broke

Tyler Durden's picture




 

Last month, we documented the case of Louisiana State University, the large, well-known public institution whose 2014 enrollment totaled nearly 31,000 students. LSU, it turns out, is facing funding cuts of as much as 82% which, if realized, would likely force the school into financial exigency, the college equivalent of bankruptcy. The reason for the cuts: the sharp decline in oil prices and fiscal mismanagement have conspired to blow a $1.6 billion hole in the state’s budget. 

Bloomberg has more:

With tax revenue from the oil industry falling short of projections, the deficit has swelled to $1.6 billion for the fiscal year that starts July 1. Moody’s Investors Service and Standard & Poor’s say they may lower Louisiana’s credit rating if officials don’t come up with sustainable budget solutions.

 

Louisiana paid the price when it sold $335 million of general obligations Wednesday, its first deal this year. Borrowing costs jumped compared with an issue in November, with the yield spread more than doubling on some maturities.

 

“They have to make significant cuts across the board -- it’s almost a foregone conclusion they’ll be downgraded,” said Tom Metzold, co-director of municipal investments in Boston at Eaton Vance Management, which oversees $25 billion in local debt.

 

Lawmakers are grappling with the state’s finances in part as the price of crude oil, which along with natural gas generates 13 percent of its revenue, is down about 40 percent from mid-2014. The mounting fiscal strains threaten to pinch funding for programs such as higher education, contributing to a buyers’ revolt last month against a bond sale from the state’s flagship university…

 

Steve Hlavin, who runs a Louisiana fund for Nuveen Asset Management in Chicago, said he hasn’t bought state general obligations since 2010 and probably won’t dive back in Wednesday.

 

“For a state that’s exhibited chronic structural budget imbalance, you aren’t being compensated with a lot of credit spread,” Hlavin said. “They’re being forced to come to terms with the fact that one-shot solutions are no longer available.”

The real problem however is that large budget shortfalls aren’t confined to Louisiana. In fact, a new study from AP shows that big gaps are becoming more the rule than the exception across the US. 

Via AP:

An Associated Press analysis of statehouse finances around the country shows that at least 22 states project shortfalls for the coming fiscal year. The deficits recall recession-era anxiety about plunging tax revenue and deep cuts to education, social services and other government-funded programs.

 

The sheer number of states facing budget gaps prompted Standard & Poor's Ratings Service to call the trend a sort of "early warning."

 

"After all, if a state is grappling with a budget deficit now, with the economic expansion approaching its sixth anniversary, what will be its condition when the next slowdown strikes?" credit analyst Gabriel Petek wrote in a recent report.

The forces at work today are somewhat different than when the recession took hold in 2008. In some states, revenue growth has been stagnant, missing projections and making it difficult to keep pace with expanding populations and rising costs for health care and education. Other states have been hurt by a steep decline in oil prices or seen their efforts to promote growth through tax cuts fail to work as anticipated...


A majority of states have failed to climb back to their pre-recession status, in terms of tax revenue, financial reserves and employment rates, said Barb Rosewicz, who tracks the fiscal health of states for The Pew Charitable Trusts.

 

Alabama, for example, faces a $290 million shortfall after a voter-approved bailout expires at the end of the current fiscal year. If nothing is done, the courts will not have the staff to send jury notices, monitor juvenile delinquents, process protection orders and collect and distribute child support payments, he said.

 

"This is an insane proposition," Hobson said. "The public would suffer."

 

Nationally, total tax revenue coming to the states has been rising, but the pace has been slow as employment continues to lag pre-recession levels in more than half the states, according to the Pew Charitable Trusts. Pew also found that 30 states are collecting less revenue than at their peak.

 

The Census Bureau recently reported that total state government tax collections in fiscal year 2014, which in most states ended last June, increased 2.2 percent over the previous fiscal year. That represented the fourth consecutive overall increase, but 17 states reported declines in tax revenue from the previous fiscal year, according to the report. Alaska saw the biggest drop, of $1.7 billion.

 

In Illinois, lawmakers are trying to figure out how to close a $6 billion projected shortfall for the next fiscal year, due largely to the expiration of a temporary tax increase [and] in Kansas, the Republican governor and GOP-dominated Legislature now confront budget deficits after aggressive tax cutting that prompted them to reduce school funding this spring.

Kansas' troubles emanate from a income tax cuts implemented at the behest of Gov. Sam Brownback and have created what one public school superintendent calls the worst situation he's ever seen in terms of the degree to which the education system is being squeezed. More color, from Bloomberg:

Income-tax cuts in Kansas championed by Governor Sam Brownback have led to credit downgrades, political turmoil and deepening budget deficits. This week, they'll start forcing schools to close early.

 

As lawmakers work to erase a projected $800 million budget gap for the fiscal year starting July 1, at least eight school districts that saw their funding cut this year because of a greater-than-projected slide in state tax collections will begin shutting down before the scheduled end of classes. Dozens of others have eliminated or cut programs.

 

Early school closings and program reductions are signs of a budget sinkhole in Kansas, where Brownback and the Republican-controlled legislature approved large income tax reductions in 2012 and 2013. They said reduced levies would spur economic activity that would compensate for lost state revenue. The governor called his move to gradually end the income tax "an experiment.''

 

It hasn't delivered the promised benefits, producing instead bigger revenue losses and, at least in the short-term, a cautionary tale of the effectiveness of using large tax cuts to spark economic growth...

 

"There have been times when things were tight, but this is the absolute worst I've ever seen it,'' said Mike Sanders, superintendent of Skyline Public Schools, which will end the school year two days early on May 12.

 

Skyline, about 75 miles west of Wichita, has petitioned the state for emergency cash so it can meet its June payroll.

 

"It's crazy times,'' Sanders said. "The ideology in this tax experiment has gone too far. It's almost as if they're hell-bent on proving their point, no matter the damage it causes.''

 


Meanwhile, Brownback recently got a rather amusing wake up call at dinner when his waitress, one Chloe Hough, advised the Governor to take the tip he presumably would have left and give it "to the schools." 

 

All of the above will of course be exacerbated in an environment where the macroeconomy takes a sudden dive (as it did in Q1) and any sustained economic slowdown could serve to inflict further pain on the public sector, which leads us to wonder if the anti-austerity movement is about to take to take root in America just as it has in the euro periphery. We'll close with the following from Morgan Stanley's bear case scenario:

The economic rebound stalls, which increases budget gaps alongside fewer available policy solutions. Political support for austerity begins to wane, impeding further progress in addressing long-term liability problems. Falling oil prices hurt the sector where the market does not expect it, in highly rated but energy industry focused states. 

*  *  *

Bonus chart: tax revenue growth, while still positive, has slowed markedly over the past three years

 

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Tue, 05/12/2015 - 00:16 | 6083748 neilhorn
neilhorn's picture

Agree. Give me all your money, and I swear you won't have to worry. I'll take care of you.

Mon, 05/11/2015 - 17:11 | 6082528 TheFourthStoog-ing
TheFourthStoog-ing's picture

What we need at this point is genuine fiscal stimulus to get our people back to work again.

C'mon folks, this isn't that difficult!

Mon, 05/11/2015 - 17:32 | 6082613 Kprime
Kprime's picture

right, I think they should just print a trillion dollars and hand it out through the banking system.  They could call it quiet economics.

Tue, 05/12/2015 - 00:17 | 6083751 neilhorn
neilhorn's picture

Stimulate this!

Mon, 05/11/2015 - 17:12 | 6082532 Sudden Debt
Sudden Debt's picture

About Oil.
The Saudi King refuses to meet with Obama.
This thus shows even bigger tensions and is another threath to the petro dollar.
I wonder if the petrodollar will survive another idiot as president...

Mon, 05/11/2015 - 17:20 | 6082566 new game
new game's picture

interesting info. the king disses o. will merica survive hitlery? or be bush wacked to wwIII?

interesting tymes. moar is less...

Mon, 05/11/2015 - 18:07 | 6082746 DutchBoy2015
DutchBoy2015's picture

Can't wait to see Killary in a Burka to meet the Saudi King. and kiss his hand.

Mon, 05/11/2015 - 22:34 | 6083533 tarabel
tarabel's picture

 

 

I'm not sure "refuses to meet" is a totally accurate description.

Try "refuses to meet in a venue where Obama is not obligated to bow."

Mon, 05/11/2015 - 17:13 | 6082537 wmbz
wmbz's picture

Il-a-noise sure is looking sweet with that $6 billion. They are the champions! Way to lead boyz.

Simple fix...just raise taxes!

Mon, 05/11/2015 - 17:38 | 6082629 negative rates
negative rates's picture

Just sell your assets, roads, bridges, parking meters and such, problem solved.

Mon, 05/11/2015 - 21:37 | 6083374 847328_3527
847328_3527's picture

Guvnor Perry sold several of the Toll Ways to bankers in Spain.

Mon, 05/11/2015 - 22:32 | 6083528 tarabel
tarabel's picture

 

 

Didn't Chicago already sell its parking meters?

But hey, sell them twice. It's Chicago.

You wanna complain, we'll rip up the road in front of your store for the next decade.

Tue, 05/12/2015 - 00:21 | 6083755 neilhorn
neilhorn's picture

That should take care of it. Sell everything that the state is supposed to provide. Keep the rest for yourselves and your posterity. Your kids are special and need a lot of money to survive, you leeching political trash with knee joint distopia.

Mon, 05/11/2015 - 17:13 | 6082540 heisenberg991
heisenberg991's picture

The end is near. The govt will seize your assets including your home to pay off their debts. 

Tue, 05/12/2015 - 00:24 | 6083758 neilhorn
neilhorn's picture

Well, at least they have enough ammo and body armor to survive the fight. I don't, but I am not surrendering.

Mon, 05/11/2015 - 17:16 | 6082552 XqWretch
XqWretch's picture

Illinois #1! I'm sure Krugman will be giving you guys an award soon!

Mon, 05/11/2015 - 17:18 | 6082555 Never One Roach
Never One Roach's picture

The Middle Class Donkeys need to work harder to pull the overloaded, debt ridden public wagon.

Mon, 05/11/2015 - 17:18 | 6082558 Klemens
Klemens's picture

all western countries are broke! The date will come when the debt money system come down! Than we will have got the SHTF Situation. So get get prepered for the worst case.

And do not forget to get "The Miraculous Medal" for your protection (for each family member one)!  https://americaneedsfatima.org/forms/WEB120

You can google also for this medal, than you find out it will help you.

 

Mon, 05/11/2015 - 17:19 | 6082561 Thirtyseven
Thirtyseven's picture

Maine has more debt than Michigan?

Tue, 05/12/2015 - 02:16 | 6083879 Ex-MislTech
Ex-MislTech's picture

All stats are true, no one ever lies, trust all stats put forth by ppl

even if they have been repeat liars in the past, or maybe not...

 

I think some states debts are so bad that ppl can't really grasp it

such as Kalifornia.

Mon, 05/11/2015 - 17:23 | 6082580 venturen
venturen's picture

odd you focus on the states run by the GOP when the real basket cases are the ultra liberal spend it all democrats. 

Mon, 05/11/2015 - 17:25 | 6082584 Kirk2NCC1701
Kirk2NCC1701's picture

Better tax Bill Gates and his MS billionaire pals, Amazon and Starbucks, to make WA balanced again. ;-)

Mon, 05/11/2015 - 17:29 | 6082604 falak pema
falak pema's picture

In a neo feudality the bottom 99% don't count. Its the aristocrats that run the world.

Welcome to the US aristocracy age.

Mon, 05/11/2015 - 18:30 | 6082819 FreeShitter
FreeShitter's picture

Pink Floyd sang about our times now, over 30 years ago....

Tue, 05/12/2015 - 02:19 | 6083881 Ex-MislTech
Ex-MislTech's picture

Due to all the rampant outright stealing thru creative means,

I call this a Kleptocracy. 

 

Government for thieves by thieves, and they are addicted to it

and cannot stop stealing.

 

In the documentary Fishead - Are our leaders Psychopaths they

hooked up wall street scammers to brain scans and saw they

had the same addictive brain triggers as cocaine addicts when

the did a trade that screwed someone.

 

So thus.... Kleptocracy, government by kleptomaniacs.

 

Google "32 trillion offshore needs IRS attention" and you will

see its true.

 

 

Mon, 05/11/2015 - 17:49 | 6082674 rickv404
rickv404's picture

And more than half think Obamacare is a good deal for them.

Mon, 05/11/2015 - 18:09 | 6082752 Chuck Knoblauch
Chuck Knoblauch's picture

WS crooks will float some munis for you.

Mon, 05/11/2015 - 18:30 | 6082820 TeethVillage88s
TeethVillage88s's picture

"At least 22 states are facing budget shortfalls thanks to a combination of fiscal mismanagement and falling oil prices."

Wouldn't lose of Property Taxes, Vacant Homes, Mortgages in Arears, Homes in Foreclosure, and Homes owned by Banks... Also BE A Cause of Budget Problems From 2007 -2015.

And Education has become more Expensive even with additional Federal Funding... Bilingual Teaching, After School programs, Special Education Programs, Expanding Bus Routes... Expensive Standardized Testing with Federal Contractors... New Security measures, New ID Card Systems with Biometrics or other High Tech, Surveillance Cameras, additional security personnel to open doors in a real fire or other emergency.

Just saying the Costs have gone up partly due to Federal War on Terror and partly Due to Sub-Prime and other Housing Bubble which raised banking fees, property taxes, property insurance, and which cost Tax Revenue Streams used for schools.

Inflating Housing Prices and causing Housing Bubble has real costs to real people on Main Street.

Mon, 05/11/2015 - 21:40 | 6083388 847328_3527
847328_3527's picture

My former co-worker moved to Telfair an area outside of Houston where he says property taxes are about 3.5% That's a big cost on a $700k house not including all the maintenance, home owners insurance, HOA fees, and on and on. It's no wonder the Middle Class if broke.

Mon, 05/11/2015 - 18:15 | 6082770 Holy Roller Empire
Holy Roller Empire's picture

Meh, Kansas. Wake me when their schools get only enough money to teach evolution.

Mon, 05/11/2015 - 19:32 | 6082989 WillyGroper
WillyGroper's picture

Till they come for you.

In October 1838, that is, fifteen months after I had begun my systematic enquiry, I happened to read for amusement Malthus on Population, and being well prepared to appreciate the struggle for existence which everywhere goes on from long-continued observation of the habits of animals and plants, it at once struck me that under these circumstances favourable variations would tend to be preserved, and unfavourable ones to be destroyed. The result of this would be the formation of new species. Here, then, I had at last got a theory by which to work...

https://en.wikipedia.org/wiki/Charles_Darwin

Tue, 05/12/2015 - 00:30 | 6083764 neilhorn
neilhorn's picture

Ah, yes. Survival of the fittest. And ever it shall be unto the everlasting. For there is no other way that I came to be.

Mon, 05/11/2015 - 18:22 | 6082800 WTFUD
WTFUD's picture

We can ALL thank FUCK that the ADMINISTRATORS are doing a Grand Jobby. For every Administrator you can hire 3/4 auxiliaries OR put another way get rid of these over-hyped pencil pushing bureaucrats ( whose main purpose was balancing budgets, while promoting healthy government checks; spies ).

That's at least a direct 20% saving and indirectly ( for certain there's another 3 tiers of administrators checking on administrators ) probably another 20% saving.

Some bastards are not doing their Job and probably like O'turd are doing the bankers bidding on the golf circuit and in plush government policy dontthinktank offices.

Mon, 05/11/2015 - 18:23 | 6082802 Falconsixone
Falconsixone's picture

RBN is shutting down if  they don't get 10k this week. Anybody want a favorite charity whipout your wallet and save Republic Broadcasting Network  please. http://republicbroadcasting.org/

Mon, 05/11/2015 - 18:27 | 6082814 hardmedicine
hardmedicine's picture

Alabama, for example face a $290 million shortfall after a voter-approved bailout expires at the end of the current fiscal year. If nothing is done, the courts will not have the staff to send jury notices, monitor juvenile delinquents, process protection orders and collect and distribute child support payments, he said.

 

"This is an insane proposition," Hobson said. "The public would suffer."

 

LOL, 

That would be just horrible to have the illegitimate children, baby mamas have to figure out how they are going to be responsible for their behavior now, wouldn't it.

 

I say let it all burn.

 

Mon, 05/11/2015 - 20:32 | 6083155 Niall Of The Ni...
Niall Of The Nine Hostages's picture

Don't worry. It will.

First time around Sherman took months to burn Dixie down and show uppity southerners who was boss. Today it'd take minutes.

Mon, 05/11/2015 - 18:40 | 6082855 Silverhog
Silverhog's picture

Massachusetts is my proud welfare state finishing off the Roman decline. Please come here to live, my home is for sale. 

Mon, 05/11/2015 - 18:45 | 6082871 Monetas
Monetas's picture

I have a novel fucking idea .... how about lowering salaries of state employees .... just like a mom and pop business has to do .... when times are tough ? Fucking sacred socialist cows !

Mon, 05/11/2015 - 20:29 | 6083147 gwar5
gwar5's picture

'Zactly right. They're killin' us with their lavish pensions, health care, and salaries twice the average of the private sector. There's no way to get them to take less or outsource their parasitic jobs, and they deign to 'rule' over us even though we are their employers.

 

Mon, 05/11/2015 - 20:37 | 6083180 Crocodile
Crocodile's picture

How about imprisoning all politicians, lawyers, and bankers, then start over?

Tue, 05/12/2015 - 02:28 | 6083888 Ex-MislTech
Ex-MislTech's picture

I don't think prison solves the problem, but if we seized their offshore party fund it might.

 

http://www.marketoracle.co.uk/Article40250.html

 

Besides I like a traveling road show where ppl get to punch them in the face,

much cheaper then the therapy bill the millions of ripped off shitizens will need.

Tue, 05/12/2015 - 02:27 | 6083889 Ex-MislTech
Ex-MislTech's picture

dupe

Mon, 05/11/2015 - 22:49 | 6083562 FredFlintstone
FredFlintstone's picture

Ha! When the "recession" hit, our municipality raised the income tax rate from 2 to 2.5% to keep revenues up. Not that things are "fine", there is no discussion of lowering them back down. One little example of the ratcheting up. Chinese handcuffs keep working to strangle us all.

Tue, 05/12/2015 - 00:35 | 6083768 neilhorn
neilhorn's picture

You have a municipal income tax? Who decided that was a good idea. Surely you didn't vote for that? Well, at least it is at the local level of taxation. If the locals want their government they should get it.

Mon, 05/11/2015 - 18:51 | 6082894 Monetas
Monetas's picture

.... and the water buffalo .... must never do without .... ANYTHING !

Mon, 05/11/2015 - 19:02 | 6082921 indaknow
indaknow's picture

...........and the other half are unofficially broke.

 

Mon, 05/11/2015 - 23:00 | 6083590 forwardho
forwardho's picture

Or they sub-out the number crunching to the trusted BLS

Mon, 05/11/2015 - 19:13 | 6082946 logicalman
logicalman's picture

Here's a challenge....

Can anyone name a government that is not morally and finacially bankrupt?

 

 

Mon, 05/11/2015 - 19:17 | 6082955 pashley1411
pashley1411's picture

Iceland   Botswana     Antartica

Mon, 05/11/2015 - 20:35 | 6083171 Crocodile
Crocodile's picture

Who is the leader of the "country" of Antarctica?

Mon, 05/11/2015 - 20:57 | 6083264 Anusocracy
Anusocracy's picture

The self-government of Anusocracy.

Mon, 05/11/2015 - 20:05 | 6083070 moratar
moratar's picture

sparta!

Mon, 05/11/2015 - 20:34 | 6083160 Crocodile
Crocodile's picture

Since a government is not a person; it cannot be equated with morality; only people can and all people are immoral when the fixed moral law is applied.  As far as a financially bankrupt country; I do not pretend to know the answer.  Saudi Arabia is likely not bankrupt.

Mon, 05/11/2015 - 20:34 | 6083162 Niall Of The Ni...
Niall Of The Nine Hostages's picture

Russia and Israel. 

Tue, 05/12/2015 - 02:32 | 6083901 Ex-MislTech
Ex-MislTech's picture

Israel exists only because of their extortion racket in DC, and

their MK Ultra op in Hollyweird.

 

Ask Chapelle why he left again....

Tue, 05/12/2015 - 02:40 | 6083914 Seek_Truth
Seek_Truth's picture

How could you forget the Rothschild family?

And the Balfour Declaration?

And the British Empire?

Mon, 05/11/2015 - 19:16 | 6082951 Stlouiemike
Stlouiemike's picture

I live in southern IL. know a guy who showed up from 9-5 to f off all day, totally useless.  He paid in about 9% of his 35k salary a year for pension, about 63k total paid in.  He "retired" in 1995 and has collected 26k a year in pension, about 520k! so far he's still kickin.  Wife too so they are living the life of reilly while I struggle to surive.  a micro example of why this country is screwed.

Mon, 05/11/2015 - 19:30 | 6082983 johnberesfordti...
johnberesfordtiptonjr's picture

The Koch brothers benefited mightily from their investment in Sam Brownback (the Governor of Kansas). Koch Industries is headquartered in Wichita. Brownback even hired Art Laffler (the premier supply side con artist) to tell him what he wanted to hear about taxes and growth… Kansas now has low taxes (particularly on the uber rich) and a severe economic decline accompanied by a decay in infrastructure, education, policing, etc.   Brown of California RAISED taxes and the economy is growing nicely and the state has a budget surplus.  Wait, wait, how could this be?

Of course, moronic ZHers still believe in supply side fairy tales contrived by plutocrats to dupe the gullible.  Much of the lack of growth and budget deficits are a consequence of Tea Party goofballs gaining control of state legislatures (see Arizona, AKA “Desert Alabama” for example).  

The most developed and desirable places to live in the world have relatively high tax rates (when all forms of tax are included). Simply lowering a tax rate doesn’t guarantee growth and, in fact, can worsen an already bad fiscal situation.  It makes matters worse. 

 

Mon, 05/11/2015 - 19:59 | 6083049 seminal1
seminal1's picture

"Much of the lack of growth and budget deficits are a consequence of Tea Party goofballs."

Only a dumb libtard living on the bankrupt big government welfare plantation would spout this nonsense. 

The reality is that one-third of the country is supporting the rest financially.

http://www.mybudget360.com/not-in-labor-force-one-third-americans-carry-...


 

Mon, 05/11/2015 - 22:54 | 6083577 neilhorn
neilhorn's picture

Those who decide to live in a high tax rate locale have already robbed the system and have enough dough to pay the confiscators and still live on an acceptable income.

Mon, 05/11/2015 - 20:16 | 6083106 Vendetta
Vendetta's picture

Another couple massive free trade agreements with europe and asia and the subsequent loss of another 10 million decent paying jobs in the US should fix it all.

Mon, 05/11/2015 - 20:29 | 6083148 Crocodile
Crocodile's picture

But Obama said it will create jobs for Americans; just another lie from the "Liar in Chief"...thumbs up to you!

Mon, 05/11/2015 - 20:23 | 6083128 kchrisc
kchrisc's picture

Uncle Scam: "Well, we can relieve you of your debt problem, but you will have to relinquish the rest of your sovereignty to us, the DC US, and our masters, Zion."

Liberty is a demand. Tyranny is submission.

 

 

Mon, 05/11/2015 - 20:54 | 6083196 22winmag
22winmag's picture

State-level political scum are much closer to their angry citizens (and closer to the big razor and the firing squad) than the FEDS are.

 

For now.

Mon, 05/11/2015 - 22:58 | 6083585 neilhorn
neilhorn's picture

Repeal the 17th amendment. Make your senator responsible to your corrupt state govt. At least there are grass roots in the state senate.

Mon, 05/11/2015 - 20:32 | 6083157 debunker
debunker's picture

Brownback suckered Kansas voters into the typical republiCON mantra of reduced taxes, smaller gov't, yada yada, job creators will hire everyone BS and look where it got him.  When will these morons ever learn?

Tue, 05/12/2015 - 00:06 | 6083737 Clowns on Acid
Clowns on Acid's picture

You are a dumb and dishonest fuckwit.

Mon, 05/11/2015 - 20:39 | 6083178 22winmag
22winmag's picture

If you thiink the FEDS are kicking down doors, seizing assets, and taking everything that isn't nailed down (and getting away with it), let's see what happens when individual states really begin butt raping their citizens for cash beyond the pale.

 

Revolution... yes even in the admittedly flabby, somewhat slobby, supposedly docile US of A.

Mon, 05/11/2015 - 20:40 | 6083191 yogibear
yogibear's picture

"Let's see what happens when individual states really begin butt raping their citizens for cash beyond the pale."

People need to flee those states.


 


Mon, 05/11/2015 - 21:56 | 6083434 harleyjohn45
harleyjohn45's picture

Travelers on I-10 and I-20 will be geting lots of traffic tickets, they have always been bad, but now the cops have to eat.  Those budget cuts really hurt.

Mon, 05/11/2015 - 20:38 | 6083185 yogibear
yogibear's picture

Good! Let's shoot for 26 states. Misery loves company.

Leave those states that are in trouble because they'll tax the remaining people to death.

 

Mon, 05/11/2015 - 21:24 | 6083232 RaceToTheBottom
RaceToTheBottom's picture

Just fire up the printer, no problems

While you are at it, just print up a few more trillion to remove the need for taxes...

Mon, 05/11/2015 - 20:52 | 6083244 Baby Eating Dingo22
Baby Eating Dingo22's picture

They will prop up oil like they did with stocks and housing

Next...

Mon, 05/11/2015 - 20:55 | 6083252 me or you
me or you's picture

They are welcome to join the BRICS and the AIIB banks.

Mon, 05/11/2015 - 20:56 | 6083254 Arthur Schopenhauer
Arthur Schopenhauer's picture

People are being shut out, and shouted down because of their critical thoughts. That is the objective, after all.

Mon, 05/11/2015 - 21:17 | 6083318 TeethVillage88s
TeethVillage88s's picture

You saw the Bloomberg Story today on Frontrunning that 7 Largest US Banks Predict large buying of US Treasuries just as FED switches to strategy of selling more long Term US Treasuries. FED Predicts selling $1.4 Trillion in coming year, but one bank wants $900 Billion (JPM I think). And we know that all Countries in the Developed World have been adding to their Holdings of US LT Treasuries each year.

So it is like Households are competing with the whole world and our TBTF Banks for an Interest Rate for Savings Accounts, CDs, Money Market Accounts.

Anyway looks like NIRP for USA. High Demand for US Treasuries.

I mean what hasn't Federal Govt, TBTF, and the FED done to US Savers, US Workers, US Taxpayers, US Health Patients, US Home Owners, US Fixed Income Dependents, US Retirees, Aging US Workers who Lost Savings & Retirements in the Housing Bubble...

The list of what has slammed the US Citizen since 1999 or even the Savings & Loan Crisis or Passing of NAFTA is HUGE.

Now is there a List of things that have helped US Citizens?? Well Illegals help with the Demographics problem, but it is too mixed to actually call that a good thing (Mainly I see Budget Explosions).

Question: Are we supposed to Thank VICHY DC for the TARP Bailout, LIRP/ZIRP, and QE??

It was the Failure of Clinton Admin, Robert Rubin, Larry Summers, Alan Greenspan, Phil Graham, Leech, Bliley, DOJ, FBI, SEC, OCC, FINRA, Treasury, and then George W. Bush that we had a TARP in the First Place.

There is like 25 bad things that VICHY DC, FED, and VICHY Wall Street Did to us.

----------------------------------------------------------
- and we can't find one thing to Thank them for!! -
----------------------------------------------------------

WHERE the hell is the MSM or Public TV or Public Radio even!

It is a God Damned Counter Intelligence Operation!

Tue, 05/12/2015 - 00:39 | 6083779 Arthur Schopenhauer
Arthur Schopenhauer's picture

There's plenty of people raising hell about it.

I just saw in the past few days why some 52 percent of the American public is not invested in the stock markets.

The poop says it is because they don't have to the money to invest in the stock markets, or they are stupid, or too poor, or they are scared... or whatever.

Sir - I humbly submit to you that a large proportion of this 52 percent are NOT contributing to these markets for the reasons above...

The reason is because THEY FIND IT MORALLY WRONG TO CONTRIBUTE TO THIS CRIMINAL SCHEME AND THEY HAVE MORAL VALUES AND THEY REFUSE TO PARTCIPATE IN IT!!!

How's that for covering up the FUCKING TRUTH???

Tue, 05/12/2015 - 00:58 | 6083800 neilhorn
neilhorn's picture

So I believe. Why give my savings over to a criminal syndicate that is waiting for the opportunity to take it all away from me?

Tue, 05/12/2015 - 01:19 | 6083818 Arthur Schopenhauer
Arthur Schopenhauer's picture

I'm tired of this doomer shit. Do we not have any faith our fellow man?

I do. I have faith in myself. I have faith in YOU. People will eventually wake up, and they will revolt, and they will make the change when the time comes. Fuck this goddamn doomer shit. Have you ever heard the phrase - "It is always the darkest before the dawn?"

Get with it. People are listening and they are learning.

It takes time... slowly but surely we are learning.

A revolution is occuring...

Get involved and contribute to it. Don't drag it down.

Tue, 05/12/2015 - 03:58 | 6083982 2bit Hoarder
2bit Hoarder's picture

what makes you think this is the dark times?  2008 was just the fat lady clearing her throat.  The dark times will look something like this:  some black swan will crater the market.  this will cause pension funds from even the most stable states to immediately go blood red.  The states that are in trouble now will flatline, halting, or at least drastically cutting social programs statewide.  The "trouble" seen in ferguson and baltimore was mostly the result of some people having an excuse to burn and loot, not actual outrage.  What do you think will happen when something that actually affects them personally gets thrown into the mix?  Two words my friend .. Zombie Apocalypse.  And how many pensionless cops do you think are going to be willing to go out and die to try and deal with a truly angry mob of not just hundreds, but tens of thousands?  Zombie Apocalypse.  After that it gets really interesting.

Tue, 05/12/2015 - 03:01 | 6083933 Ex-MislTech
Ex-MislTech's picture

93 million working age adults in the US are not working.

 

Close to 50 million qualify for food stamps.

 

The government has been lying about many things and

been caught at it several times.

 

Anything they say is suspect.

 

Tent cities remind me of hoovervilles...

 

https://www.google.com/search?safe=off&hl=en&site=imghp&tbm=isch&source=...

Tue, 05/12/2015 - 02:42 | 6083915 Ex-MislTech
Ex-MislTech's picture

Google "Operation Mockingbird"

Mon, 05/11/2015 - 21:00 | 6083276 fremannx
fremannx's picture

The largest credit bubble in global history has imploded and the inward collapse is just beginning to be felt. State bankruptcies will increase rapidly and, globally, country after country will go the way of Iceland, Greece and Cyprus.

 http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...

Mon, 05/11/2015 - 21:38 | 6083376 Jtrillian
Jtrillian's picture

Many states have been on the verge of bankruptcy for several years.  Like the federal government, they too have managed to kick the can.  They have been unable to manage their fiscal shortcomings and by refusing to deal with the problem, they have only made it worse. 

Get ready for the worst financial collapse in history.  It is not going to be pretty. 

Mon, 05/11/2015 - 21:46 | 6083404 Rossypooh
Rossypooh's picture

Tax the heal out of the stock market. 50% on all gains. Long, short, up down. Kill 2 birds and flatten out a puffin all in one.

Mon, 05/11/2015 - 21:55 | 6083428 q99x2
q99x2's picture

All the States have to do is allow the NWO to turn their weapons on the citizens and the FED will print them up some money no problem. This ain't rocket science you know.

Mon, 05/11/2015 - 22:15 | 6083462 Dickweed Wang
Dickweed Wang's picture

All of these states need to start digging into their numerous financial "investments" that can only be found by the public if you review their FULL comprehensive annual financial reports (CAFR) - not the summarized versions that are typically sent to the media and available to the public.

Virtually every state has billions of dollars in special accounts that never see the light of day as far as the public is concerned.   When this money is considered, not one state in the union is broke or has a monetary shortfall at all! 

The problem is the politicians use these accounts to maintain their power within government - i.e. they treat the money like their own little slush funds - and then plead poverty while they raise taxes and do really smart things like cutting funding for schools! No wonder our educational system in this country is so screwed up on the financial side . . . .

Go to http://cafr1.com/ for more info on the CAFR scam. Here's a title for one of the videos on the CAFR1 web site that is a perfect example of what is going on in every state:

University of Wisconsin - Hides 1-billion dollars

Mon, 05/11/2015 - 22:10 | 6083463 JMT
JMT's picture

Massachusetts is included in the 'officially broke' list but NY isn't?? NY has highest medicaid costs in the nation and in the NYC metropolitan area -- cops, teachers & firefighters all make close to $200,000 a year with overtime....  Both states are booming economically while rents, home prices & property taxes continue to go up & up...  

Mon, 05/11/2015 - 22:15 | 6083478 HalinCA
HalinCA's picture

Yawn ... why does an old man like me have to point out the simple, obvoius answer:  Legalize and tax ALL drugs.

 

Problem fixed.

 

Time for my nap.

 

Mon, 05/11/2015 - 22:48 | 6083563 forwardho
forwardho's picture

Never happen.

How on earth would they pay for all the black ops currently paid for with drug earnings?

Operation Condor;Mexico, increase heroin sales.

Operation Red mist;Columbia, increase cocaine sales. 

It's no accident or failure of planning that 40.000 hectacres of poppy cultivation has bloomed into 500.000 hectacres since the invasion of Afganistan. 

 

 

Mon, 05/11/2015 - 23:40 | 6083686 IridiumRebel
IridiumRebel's picture

Not to mention the periphery of drug bust monies and other cash ops from it being illegal. They want no solution. There is money in chaos.

Mon, 05/11/2015 - 22:27 | 6083487 peanuts
peanuts's picture

The Defense budget has exceeded insanity at 750 billion plus per year.  Just doing an audit of that budget would probably find enough money to help all the states that need help.  Beyond an audit, isn't it high time that budget was slashed down to reflect the utter failure of foreign policy and war making our country has perpetrated around the globe.  How many more bridges have to fall down before infrastructure gets funded?

Tue, 05/12/2015 - 00:00 | 6083727 Kprime
Kprime's picture

we've only failed at foreign policy and war because we have not allocated enough resources to the job.  I propose that congress double the defense budget starting this year.

the first 10 politicians that repeat this owe me royalties.

Tue, 05/12/2015 - 01:02 | 6083802 neilhorn
neilhorn's picture

Why only double when the money printers can quadruple, quintuple, sextupel, or decuple to infinity the war allocation?

Tue, 05/12/2015 - 04:11 | 6083996 dreadnaught
dreadnaught's picture

Good idea we'll open YOUR wallet first!

Tue, 05/12/2015 - 04:10 | 6083993 dreadnaught
dreadnaught's picture

...and thats only the Budget that they make available to Congress. They have so many huge off-budget and black budget programs going that The Department of War probably spends TRILLIONS in a given year-and they cry about 'budget cuts' BULLSHIT!

And then there is the story of the craptacular F-35 fighter, which are near 1 Billion each AND THEY HAD TO REPLACE ALL ENGINES in all 125 of them! and they wont be ready until 2020 IF THEN, instead of 2015!

They might just have to kill this turkey when the program starts hitting the Trillion dollar mark

Mon, 05/11/2015 - 22:24 | 6083504 runswithscissors
runswithscissors's picture

how's the District of Criminals doing?

Mon, 05/11/2015 - 22:43 | 6083553 Super Hans
Super Hans's picture

My property assement here in GA just went from 132K to 172K in one year!  I just got the assesment today; that said I paid 177K for the property in 2001! 

Fuck them!  

Tue, 05/12/2015 - 01:27 | 6083831 Weaponized Innocense
Weaponized Innocense's picture

Now if that is true they said u paid that in 2001 and ur property value has not gone up since u can protest their figures with ur home mortgage and have it changed.
Protesting the value going up usually gets nothing done. But if they are basing the increase of ur home value based on wrong figures which u paid for the home then u can use the proof u have to get that figure corrected.
But they are going to come back and say the value went up since 01 and thus it is the higher amount anyway. Thus if they have that u paid that higher price for ur home and intend to sell it at some point....... Going with that higher purchase price for the taxes in the sell to be less might be cheaper than the higher taxes paid on the home. Though for it to have gained nada since '01 which seems off. I'm not sure if the first time home seller still gets a total break on the taxes to sell or not so that too should be a consideration.

Mon, 05/11/2015 - 22:47 | 6083561 neilhorn
neilhorn's picture

Let me assure me all the states are broke. They went broke when the gave up their sovreignity. Now they all depend on the government in the sky.

Mon, 05/11/2015 - 23:15 | 6083634 TeethVillage88s
TeethVillage88s's picture

A lot of graphs, charts, or tables show a crash in 2008 from which there is no recovery yet.

Annual Data complete in 2014...

Looking at 2009 Employed Percent of Population low of 58.4% in 2011 we are still sitting on 59% in 2014 as per BLS.

- The High in 2007 was 63%
- So a Recovery of Tax Revenue would look like 4% of Population Increase in Employment

http://www.bls.gov/cps/cpsaat01.htm

High in the Housing Bubble was October 2005, plenty of time to Plan the Tarp, plan which banks would go Bankrupt, Plan bonuses after TARP management turned over to Goldman Sachs, Plan for QE, Plan out secret Loans to Europe and GE and Bank Managers.

And guess what New Home Sales and Existing Home Sales have not Recovered even to year 2000 levels.

Mon, 05/11/2015 - 23:24 | 6083654 jonjon831983
jonjon831983's picture

I was half joking about something like this before... "Apple Could Make Money by Bailing Out Greece"

http://www.bloombergview.com/articles/2015-05-11/apple-could-make-money-...

 

 http://www.zerohedge.com/news/2015-02-10/tomorrow-greece-decides-europe-...

 

"... One better, MSFT could provide a bridge loan.  Greece shall henceforth be called Microsoft land and only use MSFT products, locking in a client base forever and kicking out competitors.

The hoard of cash from AAPL or GOOG could probably buy out the entire debt and their cashflow to buy the rest of the country."

Tue, 05/12/2015 - 00:02 | 6083730 TeethVillage88s
TeethVillage88s's picture

Viable I think.

How many Apple Employees want to live in the Greek Islands??

Maybe a lot of them if they are Asian, East Indian, Aging Computer Techis looking for Retirement some place...

I met some Silicon Valley Retirees 2 years ago, they seemed to like the work and even had good experiences with the young transplants from Asia in a friendship kind of way.

But maybe California has some draw for Techis?

Tue, 05/12/2015 - 02:50 | 6083923 Ex-MislTech
Ex-MislTech's picture

Buying any government is a losing proposition long term,

unless you get to puppet the politicians, rent out the military

to corporations to act as mercs, and have CPS sell kids to

richie riches in other nations.

 

Oh wait...

Mon, 05/11/2015 - 23:57 | 6083720 Kprime
Kprime's picture

Almost half of us state we are officially broke.

Tue, 05/12/2015 - 00:52 | 6083793 lasvegaspersona
lasvegaspersona's picture

Greece make 23....At least they can default and then print drachma. The States are about to be completely prostate to the Feds as if they weren't already.

Tue, 05/12/2015 - 01:32 | 6083836 Oswald did it
Oswald did it's picture

This is what happens when politicians run things.  Get used to it

Tue, 05/12/2015 - 01:41 | 6083849 Shitgum Suicide
Shitgum Suicide's picture

OT- haven't seen teevee in a few years. I'm traveling and Staying at a hotel. I'm watching bloomberg and lmfao at the pathetic "analysis" that has gotten even worse then when I shut it off.

Think I'll read some Tragedy and Hope by Carroll Quigley.

Oh fuck hank Paulson is opening his yap and just said Mario draghi was a hero. That's a good one. Think I'll save that for the next since Lehman moment.

Tue, 05/12/2015 - 01:43 | 6083852 Shitgum Suicide
Shitgum Suicide's picture

Btw what the fuck is up with paul sons left pinkie finger? Looks like he used it to jam it up the asses of the American people.

Tue, 05/12/2015 - 03:28 | 6083960 williambanzai7
williambanzai7's picture

Collectively these States are worth less than Uber.

Tue, 05/12/2015 - 04:21 | 6084007 dogismycopilot
dogismycopilot's picture

I think Brownback's timing was off. Had this been 1960 or 1970 or even part of 1980 it would have worked. The problems with kansas now is there is no industry outside of aviation and farming. Both of which have had all of the efficiencies wrung out of them like a wet towel at this point. Who the hell wants to start a small business in Kansas at this point? And doing what? kansas is as middle class as it gets and the middle class is tapped out. Kansas is dying on the vine and only war

The scary part is now everyone will use this as an example of why not to cu taxes.

Tue, 05/12/2015 - 04:33 | 6084020 Scott on the Spot
Scott on the Spot's picture

How strange, considering that "America is Not Broke!"  Perhaps they should read my book....  https://tayen-lane.squarespace.com/america-is-not-broke  I bet there's trillions in their CAFRs alone.  The article makes the classic mistake made by all mainstream media and by lazy pundits everywhere, in only looking at the budget, not the assets.  The budget is for the current year.  The assets are for ALL TIME and include everything the state owns, including whopping amounts in pension funds and so-called rainy day funds.  Often, these are billions, even hundreds of billions, more than the state needs to pay pensions or agency needs (e.g. California has about $400B in its two pension funds - CalPers and CalStrs and Ellen Brown once found some $70B in a Treasurer's Rainy Day fund, which I think is now about $50B, but still more than enough to pay off California's debt, with plenty to spare, and thereby make all future borrowing available at lower interest rates, saving the state billions.  May I suggest using the rest of the funds to create a State Bank?).
In short, the piece is bogus fear-mongering, but that's how the elites stay in power, by robbing ordinary folks with lies and threats of default.

Tue, 05/12/2015 - 04:40 | 6084025 DutchBoy2015
DutchBoy2015's picture

As the blonde American bimbo exclaimed ''How can I be broke?. I still have over 50 checks in my checkbook''!!

Tue, 05/12/2015 - 04:42 | 6084028 SystemOfaDrown
SystemOfaDrown's picture

Another fine smoke-and-mirrors article. A lot of numbers thrown around but no "bonus" chart on how they really all come together. That's because if our writer did provide such a chart it would have to show dollar amount of Federal Tax Funds being cut off to each state, thus exposing austerity [Save the banks! Save wall street!] measures.

Let us not fan the flames of any potential anti-austerity movement.

Tue, 05/12/2015 - 05:24 | 6084052 Wahooo
Wahooo's picture

And here's what happens to their carcasses when they do go broke.

 

Global Bankers Look Ready to Mob Up Greece on the Cheap

Tue, 05/12/2015 - 06:19 | 6084104 SmallerGovNow2
SmallerGovNow2's picture

"A majority of states have failed to climb back to their pre-recession status, in terms of tax revenue, financial reserves and employment rates, said Barb Rosewicz, who tracks the fiscal health of states for The Pew Charitable Trusts."

HELLO! WHEN YOUR INCOME IS REDUCED YOU MUST REDUCE EXPENDATURES!  WOW THAT IS FUCKING HARD...

Alabama, for example, faces a $290 million shortfall after a voter-approved bailout expires at the end of the current fiscal year. If nothing is done, the courts will not have the staff to send jury notices, monitor juvenile delinquents, process protection orders and collect and distribute child support payments, he said.

 "This is an insane proposition," Hobson said. "The public would suffer." 

WHEN FACED WITH THE PROSPECT OF HAVING TO REDUCE EXPENDATURES GO TELL THE MSM AND PUBLIC THAT THE PUBLIC AND MOSTLY "THE CHILDREN" WILL SUFFER WITHOUT ALMIGHTY GOVERNMENT BEING ABLE TO CONTINUE UNMITIGATED GROWTH...

Tue, 05/12/2015 - 06:36 | 6084122 Jstanley011
Jstanley011's picture

Maybe so, but this year, "California budget surplus soars to new heights." And, "The state’s public schools will receive the bulk of that windfall under Proposition 98, and Assembly Democrats hope it’s used to increase average per-pupil spending and expand access to quality child care and preschool programs."

See? Socialist paradises do work.

http://www.santacruzsentinel.com/government-and-politics/20150505/califo...

 

Tue, 05/12/2015 - 08:47 | 6084459 bourbondave
bourbondave's picture

This makes me happy.  Seeing universities lose funding is the best outcome of this economic downturn.

 

what we are seeing is the result of what government has created which is a a dependent population with most at some level bellying up to the trough.  Now that the trough is running empty, the hogs are angry.

Tue, 05/12/2015 - 12:28 | 6085273 BI2
BI2's picture

Dude it's The American Curse >>> http://wp.me/p4OZ4v-3z

Wed, 05/13/2015 - 01:16 | 6088295 onmail
onmail's picture

Enuff is enuff

Americans 

Admit that u r a 3rd world nation 

now

give up

orrrrrrrrrrrrrrrrr

Wed, 05/13/2015 - 09:45 | 6089092 sharonsj
sharonsj's picture

Why are so many states broke?  Obviously because most of the people have no money.  I'm still trying to pay off last year's taxes and don't know how I'll pay off this year's.

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