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Government is Falling Apart

Government services will be cut at every level. Potholes will deepen, infra-structure problems will worsen, pension plans will become insolvent, school systems will declare bankruptcy, police and fire protection will be reduced, etc. etc. You will be “nickled and dimed” in terms of new fees and taxes. Public unions will strike, providing further disruption. But when there are no funds, there is nothing to gain.

 A friend is outraged over his North Carolina state income tax refund. He has been waiting for 5 months, and there is no sign that it is forthcoming. This outrage is likely to be viewed eventually as merely an inconvenience compared to what is coming. Brace yourselves.

Similar outcomes will appear at the Federal level. Cutbacks of postal services are coming. At some point Social Security benefits will have to be cut. Ditto for Medicare and Medicaid. Welfare programs will eventually have to be restructured to produce fewer benefits. The passage of a new entitlement, Obamacare, is true madness.

The profligate madness of our politicians has finally come home to roost. The government Ponzi scheme   is unravelling. The unravel is speeding up as the money and options runs out. At some point, there may be an implosion that renders governments inoperative for some period of time. 

While all of this happens in the governmental sector, the private sector, at best, putters along at a low level. At worst, it will decline from here to Great Depression levels. Either scenario will be plagued by continuing high levels of unemployment. The private sector will not expand or hire given the uncertainties created by government actions.

The public sector has used up all its bullets. The next wave of unemployment will be government employees. The links below are the beginnings of headlines you will be seeing and hearing for the next several years. Only the frequency and intensity of such headlines will increase. There is no level of government that is not dead broke! The mess is so big that there is no “bail out” of governments. Every government boat is taking on water at a faster rate than it can be removed.

The links below are from one day (March 17) from Chris Martenson’s site. I highly recommend you visit it, if for no other reason than to view his “Crash Course.

Christie Seeks to Suspend N.J. Tax Rebate, Skip Pension Payment

New Jersey Governor Chris Christie proposed a $29.3 billion budget that would suspend property-tax rebates, skip the state’s $3 billion pension contribution and fire 1,300 workers next year. The plan would reduce aid to schools by $820 million, towns by $446 million and higher education by $173 million. Christie, a Republican who took office Jan. 19, also called for a constitutional amendment that would limit annual growth in the state’s highest-in-the-nation property taxes to 2.5 percent.

Garden State to skip $3 billion pension contribution (New Jersey)

New Jersey won’t make a required $3.06 billion state pension contribution for the fiscal year starting July 1, Gov. Chris Christie said today…..The New Jersey Division of Pensions and Benefits said last month that the state pension system’s estimated unfunded liabilities climbed to $46 billion for the fiscal year ended June 30, up $12 billion from the previous fiscal year.

‘I Borrow Money to Buy Food,’ Says City Employee as Mayor Dave Bing’s Cut Threatens to Push Working Families Onto Welfare Rolls in City of Detroit

City employees today urged Detroit Mayor Dave Bing to consider the plight of working families before making draconian pay cuts that will push them below the federal poverty level guidelines. “I borrow money right now to buy food,” says Jackita Muhammad, a teller in the city’s finance department. “I try to buy beans and other staples so I don’t have to ask family for money, but the truth is that if the mayor cuts my pay, I will have to declare bankruptcy.”

Vallejo struggles to keep city safe during bankruptcy

It was just about two years ago that the city of Vallejo declared bankruptcy and started hacking away at its public services. Just last month, in the wake of heavy cuts to Vallejo’s police force, a wave of violent crimes gripped the town, leaving cities all over the Bay Area wondering what toll budget cuts can take….Vallejo is finding that there’s no such thing as a good backup plan when a city hits rock bottom. How do you keep safe, clean, and healthy when you’re bankrupt? Other Bay Area cities may soon be asking these questions too.

ECB’s Stark Sees Sovereign Debt Crisis Risk Unless Deficits Cut

European Central Bank Executive Board member Juergen Stark said the euro region may face a sovereign debt crisis unless governments reduce budget deficits. There is “a clear risk that we will enter a third wave,” which is “a sovereign debt crisis in most advanced economies,” Stark told lawmakers in the European Parliament in Brussels today. Any undue delay in reducing budget gaps will “have serious negative side effects on confidence and economic welfare,” he said. “The situation in Greece shows how important it is to strictly apply credible fiscal rules.”

National Debt Up $2 Trillion on Obama’s Watch

The latest posting from the Treasury Department shows the National Debt has increased over $2 trillion since President Obama took office. The debt now stands at $12.6 trillion. On the day Mr. Obama took office it was $10.6 trillion. President George W. Bush still holds the record for the most debt run up on his watch: $4.9 trillion. But it took him over four years to rack up the first two trillion dollars in debt. It has taken Mr. Obama 421 days.

‘India Will Muddle Along Until The Debt Crisis Hits’ (Jim Rogers)

After all the budget euphoria, it is time for a reality check. Investor and venture capitalist Jim Rogers remains deeply skeptical of India’s future. In an interview with S. Srinivasan, he argues that the country is sitting on a fiscal time bomb.

Canadian finance chief warns US, others on deficit

Canadian Finance Minister Jim Flaherty says other developed nations, including the United States, should come up with clearer plans on how they are going to get their weighty budget deficits under control. Flaherty also urged the Group of 20 leading and industrialized countries to step up work on financial reforms head of the annual spring meetings of the International Monetary Fund and the World Bank in Washington D.C.

U.S. debt at no risk of downgrade-Geithner

U.S. Treasury Secretary Timothy Geithner insisted on Tuesday there is “no way” major credit rating agencies will cut the gilt-edged rating they assign to U.S. debt offerings. His comments followed a report on Monday in which Moody’s Investors Service said risks had grown to the credit ratings of the United States and other large Triple-A sovereign debt issuers.

German Defense Cuts Loom as Merkel Fights Record Budget Deficit

Lawmakers cut net new borrowing by 5.6 billion euros on March 5, saying the potential for savings on labor-market programs such as jobless benefits has increased after Europe’s biggest economy exited its deepest recession since World War II in the second quarter of 2009. The overall budget deficit will swell to 5.5 percent of gross domestic product this year, almost twice the European Union ceiling of 3 percent, the Finance Ministry said Feb. 22 before lawmakers cut Merkel’s budget request. With spending now slimmed to 319.5 billion euros, the IWH economic institute yesterday predicted a deficit of 4.9 percent of GDP this year.

Schwarzenegger Will Veto $1.1 Billion Gasoline-Tax Swap Measure

The measure sent to his desk was a revision of Schwarzenegger’s original plan to lower consumer prices while simultaneously helping close a budget gap estimated at $20 billion for this year and next.

“It has been nine weeks since I called a special session of the Legislature and, while the Legislature has sent bills to my desk that address $200 million of the shortfall, that amount represents merely 1 percent of the projected deficit,” the governor wrote in a March 15 letter.

‘Live within your means,’ citizens tell city leaders (Toledo)

At two of six public meetings on the city’s budget, ”live within your means” – the exact words spoken by citizens – was among the advice given to Toledo officials trying to deal with a $48 million deficit. The advice is sound but it wasn’t something he needed to be told, Mayor Mike Bell said. Appearing at public meetings March 9 in council District 5 and March 11 in District 1, the mayor said his administration will operate with a conservative estimate of taking in only $136 million in income taxes this year. That’s $11 million less than former mayor Carty Finkbeiner projected when he submitted a proposed budget last November, before leaving office.

Feldstein Sees Greece Euro-Exit Pressures as Deficit Plan Fails

Harvard University Professor Martin Feldstein, who warned almost two decades ago that the euro would prove an “economic liability,” said Greece’s austerity plan will fail and the country may quit the single currency to fix its fiscal crisis.

“The idea that Greece can go from a 12 percent deficit now to a 3 percent deficit two years from now seems fantasy,” Feldstein, an adviser to U.S. presidents since Ronald Reagan, said in a March 13 interview in Geneva. “The alternatives are to default in some way or to leave, or both.”

CMS Cuts Could Mean Hundreds Of Layoffs

Charlotte-Mecklenburg Schools Superintendent Peter Gorman said he’s moving forward with a plan to lay off 841 employees, including more than 580 teachers.

Mayors Seek $50 Billion to Upgrade U.S. Water, Sewer Systems

The average U.S. household’s water and sewer rates may double or even quadruple by 2028 without additional federal grants and loans, the mayors said in a statement today, without providing specifics. Americans are likely to face more service disruptions as rising population, urbanization and aging equipment all help to intensify the burden on municipalities, according to the report.

National debt easily passes $12.6 trillion

A look at the debt history will show $12,575,678,862,901.61 on 3/12 and $12,636,662,956,140.07 on 3/15.

Red tape complicates Postal Service’s fiscal repair plan

This year is shaping up as a $7 billion loss. So the Postal Service is seeking help from Congress for the fourth time since 2003 – this time for permission to close uneconomic post offices, drop Saturday delivery and abandon prepayment of pension costs.

Since 2006, the Postal Service has been required to prepay its pension and retiree health care costs – an average of $5.6 billion a year. Congress last year let the service postpone some of that requirement. Potter wants to go back to pay-as-you-go benefits, as with Social Security and Medicare.

Schools on the brink: Districts could run out of money (Mississippi)

A recent state survey indicates trouble for a number of school districts as tax collections and state aid shrink. “You will see some school districts literally run out of money,” House Education Committee Chairman Cecil Brown said Monday. Brown, D-Jackson, suggested that as many as 10 districts could fall into the red in the coming months without the state’s help.

A shorter version of this appeared on American Thinker

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