Sunday, April 4, 2010

Whither Pennsylvania

We tax all the others and pass the revenue on to you

Repubs in Pennsylvania say their state could face a $1 bil deficit this year.  The Dem gov, Ed Rendell, says its too early to say... nine months into their fiscal year.  It's only $700 mil to date.  (Thanks, Business Week)

That's alarming on several levels.  If you can't forecast a state's deficit for a current year that is 3/4 over, how can we believe the 10-year cost projections for national health care that doesn't really ramp up for four more years?  The answer is, we can't.  No one really knows although some must profess to for the sake of politics.  

Penn budget negotiators made a deal last Oct to wipe out a projected 2-year deficit of $6 bil, with federal aid taking up some of the slack.  They promised no new taxes and predicted a rosy 3.2% growth rate next year.  Now they're telling their creditors not to count on that promise.  Turns out that deal ain't gonna happen.  Then they planned for a $525 mil deficit but they're already at $700 mil and growing.

Rendell's budget adviser says "If it doesn't deteriorate any further, and we have a shortfall of approximately $750 million, we can manage within that."  Well, maybe, but even that is with the feds forgiving a $275 mil state debt.  Has anyone forgiven $275 mil of your debt lately?

Just last week Penn legislators passed next year's budget based on that 3.2% growth figure.  Their senate appropriations committee chairman already says "Maybe 3.2 is higher than what we can reasonably expect."  One week.  That forecast was good for one week.

In California, no one has any idea what to do about their $21 bil (and growing)deficit.  State employees have been asked to take furlough days... but work anyway!  ArnieS promised several bil of spending reductions in Medi-Cal and prison spending but it didn't happen.  There is no relief on the horizon in CA.  The world's eighth-largest economy is in free fall.

It's no better here in Oregon.  Our state treasurer is taking away local property tax money and replacing it with promises to pay.  

Oregon is broke.  Oregon Gov Kulongoski proposed re-naming a bad stretch of road after a late friend of his, Randy Pape.  Cost of new signs?  $250K.  When the poop hit the paddle it was reduced to two signs for  $1,500.  Why not, say... NOTHING? 

This is the theater of gummint indifference and it plays near you 24/7/365.  Maybe Randy Pape was a great guy.  The ostensible reason for the re-naming is that he worked hard on gummint commissions.  WAIT A MINUTE!  He's working for US and he's supposed to work hard and effectively.  Now GovK says it wasn't him that proposed the re-naming after his old friend.  Well, yeah, he did write the letter proposing the re-naming but only because the highway commission asked him to.  Nice spin, Gov.

Government doesn't know how to run things.  (Hello, Health Care)  They only know how to keep spending to cover their tracks.  This is entirely independent of party politics, both are guilty.  When they run out of money they just take more of yours and tell you it's patriotic to pay taxes.  No, really.  And they pee it away on renaming roads after their friends and every other sort of self-aggrandizing crap you can think of... and health care.

California, New York, Oregon, Mass and several other states are already bankrupt measured by any conventional tests: assets v. liabilities, current liabilities v. current income, choose one, ability to meet current obligations.  So is the USA, which survives only on the full faith and credit of its pledge to lenders.

It's up to you to tell your representatives at every level, from city council to the prez, STOP SPENDING, WE'RE OUT OF MONEY!  Even if national health care is the best idea in the world (we could argue), we can't afford it (no argument). 

* * * * *

Congress can raise taxes because it can persuade a sizable fraction of the population that somebody else will pay.

Milton Friedman, Nobel Laureate in Economics

No comments:

Post a Comment