Wednesday, November 12, 2008

Connecticut May Be Facing Bankruptcy Come 2012

Our state is in a financial crisis and will be in grave trouble come 2012 if the economy does not improve in the near future. The Connecticut post ran THIS article confirming that the state deficit may balloon to 2 Billion Dollars in the 2009 cycle and THIS article indicating it will be 3.3 Billion short in 2010.

The air up in Hartford is troubling as Democrats, with no one to blame for the future budget policies, were all somber and humbled with the humility of the coming broken promises of their party. Their supermajoririty backs them in a corner and makes them the only responsible party for fixing this disaster.

Democrats, however, tend to be anything but conservative, and when it comes to slashing and firing the masses in Hartford, and the associated non essential personnel and government handouts, we could expect them to fail en-masse. This is going to mean a rapid acceleration into calls for new taxes. These most likely will include increases in the Sales Tax, Increases in the Income tax, Tolls, Gas tax increases, small business tax increases and anything else they can tax.

The philosophy will be that the state will need to tax its way out of bankruptcy. The measure however will be wholly ineffective if the economy and unemployment continue to the double digit losses that economists are predicting. As inequality between persons widens so does the desperation of finding new tax exploits. These exploits can be any working person with disposable income. Everyone and everything will be fair game, even at the expense of tyranny of plunder in the name of "good governance."

The people and businesses of this state thankfully have been smart. Especially the young people who have been leaving in record numbers. To go under in Connecticut is not like going under in Montana or Minnesota, rents are record high as are utilities and services and everything carries a high tax or a fee. Those "nutmeggers who see their incomes get eroded" escape elsewhere for affordable living.

The Democrats in Connecticut are faced with a bleak future, citizens will be angry and the Governor most likely will be blamed for the ailing economy. State employee unions will entrench themselves in the state legislatures and do everything in their power to keep their jobs from going on the cutting block. The frozen credit markets may make their future very questionable. During the Weicker administration the state borrowed money from the Japanese to fund its operations. Those days are very different, today America has depleted resources and what remains today is a questionable ability to come current on future debt, especially the 11 Trillion on its way to default. Talk is that our nation is facing challenges from global banks who wish to see America lose its three star credit rating.

Connecticut also abused its bonding authority. Our state has a record amount of bonding debt, debt incurred in many cases for liberal and frivolous pork barrel projects. Debt that was recently used to also bail out the failed teachers pensions that yet again may be challenged further.

With the current trend now growing to an alarming rate, the state could incur defits that are equal in scale to those multi billion dollar shortfalls in California. There is the added problem of no new industry moving to Connecticut, and the industry that does exist here is here in credit to political intervention. I.E. Dodd and his saving of Electric Boat in Groton.

No matter how we look at this problem, the Liberals in Hartford are going to have to become Conservative. Should they fail to become Conservative and quit catering to the funding needs of anything other than a "skeleton" government" our state will end up in revolt, or, worse yet, an uncontrollable pandemonium of angry special interests denied their promised "pork."

The question remains now, can our leaders lead? or is our state headed for the disarray that Louisiana has?, a state mired in delinquent tax revenue and broken promises. The future of our state is gravely at risk, and our future leaders are going to have some tough if not impossible choices I hope and pray that the correct decisions are made and I am saddened for the victims of the future decisions State Democrats will have to make. Lastly, I am appalled that the Federal Reserve System would create a monetary disaster for our state to deal with, and in return offer no real help to anyone person.

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