Friday, May 27, 2011
The Hidden State Financial Crisis - WSJ.com
My experience tells me that when recovery truly begins, it will likely fix a lot of things.
Unfortunately, until that happens, we must deal with what we have.
Even more unfortunate is the fact that our elected officials don't feel the proprietorship that is necessary to run governments like a business, spending prudently, and actually preparing for times like this...
Unfortunately, until that happens, we must deal with what we have.
Even more unfortunate is the fact that our elected officials don't feel the proprietorship that is necessary to run governments like a business, spending prudently, and actually preparing for times like this...
Meredith Whitney is giving a warning in the Wall Street Journal:
"The condition of state finances threatens the economic recovery. States employ over 19 million Americans, or 15% of the U.S. work force, and state spending accounts for 12% of U.S. gross domestic product. The process of reining in state finances will be painful for us all.
The rapid deterioration of state finances must be addressed immediately. Some dismiss these concerns, because they believe states will be able to grow their way out of these challenges. The reality is that while state revenues have improved, they have done so in part from tax hikes. However, state tax revenues still remain at roughly 2006 levels.
Expenses are near the highest they have ever been due to built-in annual cost escalators that have no correlation to revenue growth (or decline, as has been the case recently)."
