There is increasing evidence that states like California and Michigan, which are running huge budget deficits, will need federal aid to keep their essential services operating. They could plummet an already battered federal budget billions of dollars further into a deficit.
The need for state bailout funds seems to be growing and growing quickly. According to MSNBC, "In Ohio, which has shed 100,000 jobs in the past year, Gov. Ted Strickland (D) and his budget team spend a lot of time delivering bad news to constituents and plotting ways to wring money from the federal government." The state's two-year budget deficit could rise to well over $7 billion.
In places like Ohio and Michigan, matters are only going to get worse. Big industrial states are extremely likely to lose more jobs and businesses as sectors from automotive to retailing may see some companies disappear completely.
The issue that becomes more troubling every day is whether there is a finite limit to what the federal government can spend to save the national economy. Of course there is, but no one knows that number, which means no one can predict which industries and municipalities will get capital.
With so many beggars, the new Congress and administration are going to run low on hand-outs.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
12-29-2008 @ 7:43AM
Kerri said...
For just this reason, people need to start thinking for themselves. Do what I did, and learn to trade the Forex. You can get a free $100,000 demo trading account at http://forex-currencyexchange.com Click the link in the top left corner if I remember right. It will take you to a sign up page where all you have to do is give your name and email. You can then start practicing trading. Trading with virtual money is so much fun... and addicting. The only problem is, more often than not, you will be wishing you were trading with real money. You never know, this may be something that you have a knack for. I believe trading currencies is much better than gambling with the stock market these days anyway. Just my 2 cents.
Happy New Year
12-29-2008 @ 10:15AM
Connie said...
States first need to stop giving hand outs to illegals! That would save them millions! Until then the taxpayer should NOT be expected to bail them out!
12-29-2008 @ 10:57AM
Virgil Bierschwale said...
I get a kick out of your comment about so many beggars.
It's easy to blame others rather then face the fact that our own corporate leaders are doing this to our country.
Here is a very short article that will explain why our towns, counties, states and federal budgets are just beginning to experience what is going to get worse and why it is happening to our retailers, manufacturers and raw material producers
http://keepamericaatwork.com/?p=525
As you can see, a minor change such as puttine 30 to 40 million American's out of work or paying them less wages by sending the higher paying jobs offshore has a devastating impact on the rest of the World, not to mention America.
Virgil
http://www.KeepAmericaAtWork.com