6/30/09

State Budget Deficits

Midnight tonight marks the end of fiscal 2009 for 46 states in the US


and various state constitutions require 45


…to have a final budget by tomorrow morning


 


10 states are facing a true blue crisis


California, Connecticut, Pennsylvania,


North Carolina


Delaware, Illinois, Ohio, Indiana, Mississippi and Arizona


do not have budgets in hand on the eve of the new fiscal year


 


Of those 10


California and Arizona are looking particularly dire


 


Arizona faces a $3 billion budget shortfall


or around 30% of its annual budget


 


California needs to fill a whopping $24 billion gap


roughly 26% of its annual tab


 


Gov Schwarzenegger says without a budget


he’ll be forced to start writing IOUs tomorrow


to the state’s creditors


 


“Whenever I talk about the Great Depression


and compare it with what is going on today


I get a lot of skepticism” says Chris Mayer


 


“What you have to remember, though


is the Great Depression unfolded like a train wreck in slow motion


 


It took awhile before it became the Great Depression


 


It wasn’t like someone flipped a switch and poof


bread lines, Hoovervilles and hobos


 


Another point to remember is that the Great Depression


was a global economic event


 


It wasn’t just confined to the U.S.


 


You have a take a wide-angle view of the global economy


to get a better sense of the breadth of the slump”


 


And so it is today


 


In terms of industrial output


we’re tracking the Great Depression’s path pretty closely


 


The State Budget Crisis Peaks Tonight


Ian Mathias


The Daily Reckoning, June 30, 2009

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