Is your State Insolvent?

Reblogger Rob Arnold
Real Estate Agent with Sand Dollar Realty Group, Inc. BK627826

Florida is pretty much in the same boat as many of the other states. Out of money and scrambling to raise fees on everything to fill in whatever gaps the federal government can't pay for.

Original content by Ron Brown NMLS #270845

 

I ran across a rather disturbing report today.  The CBO released "Policies for Increasing Economic Growth and Employment in 2010 and 2011."  

According to one of the charts, we are looking at many more States than just California with severe budget shortfalls.  When you take these kind of numbers together with declining tax revenues resulting from decreasing consumption and increasing unemployment it is hard to see just how we will pull off any kind of real recovery.

Chart of the day

For the last 40 years, our government has been borrowing money to "invest in our economy," but we have had to borrow more than $1 for every $1 of growth in our GDP.  This kind of economic behavior is unsustainable, and we cannot tax, or grow our way out of this under the current debt load.  Simply slashing the budget would probably result in an economic depression that would be magnitudes greater than the "Great Depression" of the 1930's.

Unfortunately, most of the policy options from the report have a marginal effect at best.  So, do you think this will be enough for our "Representatives" to take the issues seriously, and come up with a more comprehensive plan that does not involve going ever deeper into debt?

 

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Rainmaker
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Sandy Shores FL RealtorĀ®, Melbourne Real Estate
M & M Realty of Brevard Inc. - Melbourne, FL
Brevard County Real Estate, Florida's Space Coast

Rob, We are seeing some scary reports coming out.  We can't just keep borrowing and borrowing - some day we have to pay the Piper and that day is here.

Jan 24, 2010 03:30 AM #1
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Rainmaker
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Rob Arnold

Metro Orlando Full Service - Investor Friendly & F
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