Published on TheHill.com on June 22, 2010
Many say that the situation in Greece is a harbinger of what is coming to the United States. They are right. But first it will come to states like New York, California and Michigan that are stretched way beyond their means and deeply in debt.
Until now, the problems in these states have been papered over by federal aid. Essentially, Washington has relieved these states (and the local governments they fund) of their constitutional obligations to balance their budgets by giving them welfare checks in the nick of time. Obama now seeks to pass $50 billion in additional welfare to the states.
But since these federal funds are not necessarily recurring — and the jobs and obligations they fund are — they simply enlarge each year’s deficit hole and enable the states to go more deeply into the red.
As these deficits mount — particularly if a newly elected Republican House and/or Senate refuse to fund them — bondholders will get more and more nervous. Eventually, they will realize that the less solvent states are bankrupt and will refuse to buy their debt. Eyes in Sacramento, Lansing and Albany will turn helplessly to Washington to guarantee their debt, just as Athens turns to Berlin.
Republicans, if they control either or both Houses, should stand firm and insist that these states sink or swim on their own. America’s taxpayers will not take kindly to having to bail out other states — or even their own — to pay for years of reckless spending. Americans will swarm to the GOP and will hail its stand.
The time is long past when a local newspaper can generate sympathy — even from its own readers and the state’s own citizens — with a headline like “Ford to New York: Drop Dead.” Now people in other states (and even in the affected state) would stand up and cheer should the Republicans take so strong a position.
There is currently no legal procedure for a state government to go bankrupt. Congress, especially if it is Republican in 2011, should pass a mechanism that permits states to discharge in bankruptcy their collective bargaining agreements and contracts with municipal unions. Of course, this procedure would have to let school boards and local governments do likewise.
Obama will veto this bill and a stalemate will ensue.
On the left will stand Obama, the unions and the Democrats demanding bailouts for the states and, truly, an end to our federal system of government. Once Washington guarantees state debt and spending, there will be no more state governance, only national rule.
On the right will stand a Republican Congress refusing to do so unless the states declare bankruptcy and cleanse themselves of the union agreements that got them into trouble in the first place. The GOP will point out that state funding is leaking as surely as the Deepwater Horizon oil well and polluting our nation’s balance sheet as badly in the process.
The money will run out. States, school boards and localities will stop sending out checks. Emergency state funding may keep schools open, prisons locked and police and fire services running, but otherwise all hell will break loose.
Something will give in this national game of chicken. If it is the states and Obama that blink first, we will free our local governments of the grip of municipal unions, their rigid work rules and their unaffordable pensions. If the Republicans blink first, they will forfeit their right to represent the American people, having backed down from the challenge of our times.
This Armageddon looms in 2011, presenting us with either an opportunity to reform our government in fundamental ways or to set in stone our path to an Athens-esque meltdown.
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[...] – Dick Morris [...]
I live in New York and though I am not a fan of our governor, David Paterson, I believe that it is quite possible that he will actually do the right thing before leaving office.
David Paterson stepped in when Eliot Spitzer stepped down. With Paterson’s decision not to run in the next election to keep his position, comes an element of freedom for him. If for no other reason than the sake of pride, it is possible that Paterson will do the right thing in the time he has left as governor of New York. It is possible that he will stand up to the teachers union, the state employees and even his own party, and make the cuts that need to be made.
However, his latest move to over tax cigarettes, is going to just stand to further hurt the poor. If he thinks that addicts are going to go without their cigarettes, he better think again. Smokers will let their children go without good food, shoes that fit, winter coats, etc., before they themselves go without their cigarettes. –That’s just the fact of it. In the end, children will hurt and more families will be seeking assistance.
There are better ways to generate state revenue, without taxing the heck out of people. Have you looked at your phone bill taxes lately and your cell too? Did you know that the average family of four, with health insurance, pays $1,000.00 a year in surcharges? Your gas in your car is heavily taxed. Your gas to heat your home is taxed, as is your electric. And the list goes on and on and on. Where is all of this money going to? And where will it stop?
It’s breaking us all, causing more and more people to seek government assistance, which only causes higher taxes for the rest of the people. Enough already! It has to stop somewhere. I really hope that Paterson wants to be the one governor of New York, who is remembered for having the courage to do the right thing.
Just a note: I spoke with my state senator about my idea to increase state revenue and at the same, decrease state crime. Fines, create and enforce heavy fines for true crimes.
July fourth alone, would generate hundreds of thousands, if not millions of dollars in fines for illegally shooting off fireworks here in New York, where it is a felony to do such. Make a zero-tolerance law for drinking and driving, and issue major fines for anyone caught drinking with any alcohol in them. Set up radar points, all over the place, where people’s speed shows on those lit up signs; and fine everyone going more than five miles over a speed limit. Set up a way to get license info, with the speed stamped right on it, and then mail the ticket. (This way a cop does not have spend all that time on the side of the road with one person, while hundreds of people speed right by him).
Yes, there are plenty of good ways to get revenue for the state. If only there were people in the government, willing to step out on a limb and truly fix the financial problem. Yes, Uncle Sam, truly does need a few good men and women too.
Debra J.M. Smith
Journalist at
http://www.InformingChristians.com
(DebraJMSmith.com)
[...] The Next Big Economic Crisis [...]
Kind of interesting that Obama runs around trying to bully people (e.g., companies not to criticize Obamacare for increasing costs) and acting and sounding like a president with high approval numbers. His numbers are in the low 40s and if not for the near 100% approval by blacks that number would be in the middle 30s. He has no political clout left and the wagons are circling.
I would also submit that he appears to be a man that does not want to be president anymore and is the reason he is spending more time on the golf course. In another article Dick Morris indicated President Clinton would study the issues enough to ask the correct/relevant questions to make an informed decision. Obama does not seem to have the inclination or desire to do either.
If he starts bailing out states and mismanaged union pension funds as Dick Morris points out that may trigger a fractionization of America. He will go down as the worst president ever and if his spending policies are not contained, I am afraid this country will never recover. The upcoming midterm elections are the most critical in the history of this country.
[...] Dick Morris [...]
[...] Are you worried about what the looming economic crisis will mean for you? Are you worried about the huge tax hike coming in 2011 to pay for the exploding national debt and President Obama’s health care plan. Perhaps you have one of those “Cadillac” insurance plans, where your companies’ contribution will now be taxed as income. Dick Morris says America is facing the same financial disaster that is now occurring in Greece. [...]
[...] It’s Now or Never! June 23, 2010, 9:24 pm Many say that the situation in Greece is a harbinger of what is coming to the United States. They are right. But first it will come to states like New York, California and Michigan that are stretched way beyond their means and deeply in debt. – Dick Morris [...]
[...] a day-to-day basis, a lot of times where there’s big breaking news, we just sort of roll along. But what’s the role of an anchor during huge breaking news? You remember growing up? You [...]
[...] The Next Big Economic Crisis from Dick Morris. You are invited to become a fan of this page on Facebook and/or subscribe to this site – it's free and you can opt out at any time. Thank you for your interest in guarding America. Please consider supporting Wolves of Liberty. We are in the process of expanding our staff and moving to a private server. We are also applying for non-profit status. You can make a single donation, a recurring donation, or purchase some of our merchandise. We invite you to check out our t-shirts. Not only great quality, but the images and quotes from Thomas Jefferson or Ronald Reagan tell everyone you stand for liberty. Liberatas! Share Cap-and-Trade, Civilization, Economy, Medicare, Nullification, Obama, Social Security, Socialism, Strategies, Supreme Court Budget, Cap-and-Trade, Congress, Debt, Economy, GDP, Nullification, Obama, ObamaCare, Socialism, Supreme Court, VAT Nullification – The Only Way Forward Trackback URL [...]
[...] on TheHill on June 22, 2010. Post sent to me by Glynn on June 24, 2010 by Dick Morris Many say that the situation in Greece is a harbinger of what is coming to the United States. They [...]
[...] The right’s need for enemies is coded in its political DNA. Without enemies to defeat, vanquish and even destroy, the right would suffer an existential crisis. For Goldwater it was the Communist menace; for Wallace, integrationists and intellectuals; for Nixon, liberals, antiwar activists and black radicals; for Reagan, labor, welfare queens and the Evil Empire; for Gingrich and his cohorts it was gays, feminists, welfare mothers and the Democrats; during the Bush years, it was Islam, immigrants, gays and abortionists; For the Tea Party, Glenn Beck and Sarah Palin, it’s all of the above. [...]