Tuesday, January 4, 2011

States Financial Crisis - #2531 - The Looming Crisis in the States - NY Times

For most of this year, the state of Illinois has lacked the money to pay its bills. Some of its employees have been evicted from their offices for nonpayment of rent, social service groups have laid off hundreds of workers while waiting for checks, pharmacies have closed for lack of Medicaid payments. Faced with $4.5 billion in overdue payments, Illinois has proposed a precarious plan to sell its delinquent bills to Wall Street investors in exchange for cash, calculating that the interest it must pay the investors will be less than the late fees it owes. It is no way to run the nation’s fifth largest state, and it is not even clear that investors will agree, but these kinds of shaky deals are likely to become increasingly common as the states try to cope with the greatest fiscal drought since the Great Depression.  Read more......... To avoid repeating mistakes, we must remember the consequences of our recommendations and actions, something the liberals refuse to do, particularly at the New York Times. Their constant economic prescription of draining taxpayers with higher taxes, used again and again only makes the patient(economy) worse off, like bloodletting which went out of vogue towards the end of the 19th century. At least, after over 2000 years and multiple deaths, we reached consensus that the bloodletting prescription called for by the academic surgeon weakened the patient, leaving him susceptible up to all sorts of other ills. When will the liberals and the New York Times accept the economic facts, and finally get it, that constantly raising taxes to try and increase revenues does the same exact thing to the economy? Maybe that's why they call them BLUE states, because their liberal policies are slowly draining the life out of their taxpayers.  Article and commentary provided by Steve Peters.

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