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The
Business Insider reports that 22 Painful Signs
That Austerity Has Arrived In America.
(emphasis mine)
22 Painful Signs That
Austerity Has Arrived In America
Michael Snyder, The Economic Collapse
Jan. 18, 2011, 4:23 PM
Over the past couple of years, most Americans have shown little concern as
austerity measures were imposed on financially troubled nations across
Europe. Even as austerity riots erupted in nations such as Greece and
Spain, most Americans were still convinced that nothing like that could ever
happen here.
Well, guess what? Austerity has arrived in America.
At this point, it is not a formal, mandated austerity like we have seen in Europe, but the results are just the same. Taxes are going up, services are
being slashed dramatically, thousands of state and city employees are being
laid off, and politicians seem to be endlessly talking about ways to make
even deeper budget cuts. Unfortunately, even with the incredibly severe
budget cuts that we have seen already, many state and local governments across
the United States are still facing a sea of red ink as far as the eye can
see.
Most Americans tend to think of "government debt" as only a problem
of the federal government. But that is simply not accurate. The
truth is that there are thousands of "government debt problems" from coast to
coast.
Today, state and local government debt has reached at an all-time high of 22 percent of U.S. GDP. It is a crisis of catastrophic
proportions
that is not going away any time soon.
A recent article in the New York Times did a good job of
summarizing the financial pain that many state governments are feeling right
now. Unfortunately, as bad as the budget shortfalls are for this year,
they are projected to be even worse in 2012....
While state revenues — shrunken as a result of the recession —
are finally starting to improve somewhat, federal stimulus money that had
propped up state budgets is vanishing and costs are rising, all of which has
left state leaders bracing for what is next. For now, states have budget gaps
of $26 billion, by some estimates, and foresee shortfalls of at least $82
billion as they look to next year's budgets.
So what is the solution? Well, for state and local politicians from coast to coast, the answer to these financial problems is to impose austerity measures. Of course they never, ever use the
term "austerity measures," but that is exactly what they are.
1) The financial manager of Detroit Public Schools wants to close half of all city schools, leading to class sizes of up to 62
students.
2) Detroit Mayor Dave Bing wants to cut 20 percent of the city off from
police and trash services.
3) California Gov. Jerry Brown is requiring 48,000 state workers to
turn in their government cell phones by June 1st.
4) N.Y. Gov. Andrew Cuomo is proposing to completely eliminate 20 percent of
state agencies.
5) NYC Mayor Michael Bloomberg has closed 20 fire departments at night
and is proposing layoffs in every single city agency.
6) Illinois lawmakers recently pushed through a 66% increase in the state's personal
income tax rate.
7) The town of Prichard, Ala., recently stopped sending pension checks to
retirees
in violation of state law.
8) N.J. Gov. Chris Christie purposely skipped a scheduled $3.1 billion
payment to the state's pension system.
9) New Jersey still faces a $10 billion budget deficit this year even
after cutting $1 billion from the education budget and laying
off thousands of teachers.
10) Major cuts to Newark's police force have led to a substantial spike
in the city's crime rate.
11) Camden, N.J., the second-most dangerous city in America, recently laid off half of its police force due to a huge budget shortfall.
12) Philly, Baltimore and Sacramento have started "rolling
brownouts," shutting down city fire stations on a rotating basis.
13) In Georgia, Clayton County eliminated its public bus system to save
$8 million.
14) Due to budget cuts, OAKLAND POLICE WILL STOP RESPONDING TO
SEVERAL CRIMES, INCLUDING CAR WRECKS, GRAND THEFT AND BURGLARY.
15) In Connecticut, the governor wants state legislators to pass the biggest tax increase the state has
seen in two decades.
16) State parks and historic sites are deteriorating due to widespread budget shortfalls.
17) Arizona has decided to stop paying for many types of organ
transplants
for people enrolled in the state's Medicaid program.
18) Arizona is so desperate for money they have sold off the state capitol building,
the supreme court and the legislative chambers.
19) All over the nation, asphalt roads are being ground up and
replaced with gravel because it is cheaper to maintain.
20) Illinois is such a financial disaster zone,
it is difficult for even the state Comptroller to describe.
21) Chicago's budget is in such dire straits, officials are toying with
the idea of setting up a city-owned casino to raise cash.
22) Mich. Gov. Rick Snyder is desperately looking for ways to cut the
budget and says that "hundreds of jurisdictions" in the state could go bankrupt
in the next few years.
But everything you just read is only the beginning.
Budget shortfalls for our state and local governments are projected to be
much worse in the years ahead.
So what is the answer? Well, our state and local governments are going
to have to spend less money. That means that we are likely to see even more
savage budget cutting.
In addition, our state and local politicians are going to feel intense
pressure to find ways to "raise revenue". In fact, we are already starting to see
this happen.
According to the National Association of State Budget Officers, over the past
couple of years a total of 36 out of the 50 U.S. states have raised taxes or
fees of some sort.
So hold on to your wallets, because the politicians are going to be
coming after them.
We are entering a time of extreme financial stress in America. The federal government is broke.
Most of our state and local governments are broke. Record numbers of
Americans are going bankrupt. Record numbers of Americans are being
kicked out of their homes. Record numbers of Americans are now living in
poverty.
The debt-fueled prosperity of the last several decades came at a cost. We literally mortgaged the
future. Now nothing will ever be the same again.
My
reaction:
Great article. I have nothing to add.
…
Eric de Carbonnel
Market Skeptics
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