New Economic Meltdown - State and Local Defaults

Miscellaneous Current Events
1

Here’s a link from 60 minutes last night on the financial situation for the various levels of government: http://www.cbsnews.com/video/watch/?id=7166293n

The transcript is here: http://www.cbsnews.com/stories/2010/12/19/60minutes/main7166220_page4.shtml?tag=contentMain;contentBody

Meredith Whitney, one of the financial analysts who pegged the Housing Bubble, claims things will start getting serious within 12 months if left unchecked. This is a very exciting time to be alive - amidst economic uncertainty, I think we’re approaching the point where people are realizing that business as usual has to stop. Government programs are going to have to change, and with any luck, we can scrap most of them entirely. Do any of you think society will be able to release itself from the shackles of the welfare state?

2

It’s a pretty common situation in many parts of the world: the more “local” you get, the worst the situation. As it has been demonstrated many and many times over this isn’t an income problem; it’s a spending problem. The only reason towns and provinces aren’t going bankrupt it’s because they are part of the State, and the State cannot go bankrupt. The only reason mayors and governors aren’t sharing a prison cell with Bernie Madoff, Kenneth Lay and Callisto Tanzi is because politics are all about non-accountability.

PS: don’t get your hopes too high. In fact you should be worried. What we are about to see won’t be pretty for the middle class and won’t be pretty for the cause of liberty.

3

I understand your point. I mean “state” as in one of the 50 states, not as in the federal government.

I agree with you completely! In fact, I think Governor Christie admits to that during the interview.

Why’s that - what do you think will happen?

4

It’s been seen before in other lands. What will happen next is that the Federal Government will bail out and take direct control of all formerly independent members of the federation, and the US will complete its transformation into an empire.

5

Like I always say if had the power of prophecy I would be spending all of my time trading stocks and betting on sports events…

Let’s just say I am not very optimistic about what I am seeing right now all over the Western World. I am particularly worried about what my brother calls “the opposites of the society joining forces to crush the middle class”.

As for “the State” I use it in the same sense as Nock as a synomimous for “the Government”. It doesn’t matter if we are talking about Federal government in Washington, the State of Arizona or the Broward-Dade County. They are just cogs in the same machinery.