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Not Your Father’s Recession
Tom Suhadolnik
American Thinker
Wednesday, July 8, 2009
With $700 billion in TARP, $700 billion in Stimulus and a $1.5 trillion ($1500 billion) federal budget deficit it’s easy to get numb to big numbers. So when I hear of a $53.7 billion California budget deficit I yawn. And Vermont’s measly $278 million deficit is akin to a yelping car alarm. I probably heard it somewhere but my subconscious refused to waste a single neuron imprinting it.
Frankly, almost all reports I have seen on the state budget crisis pretty much follow this formula: (1) There is a multibillion dollar deficit in some state; (2) Republicans in the legislature refuse to raise taxes; (3) Democrats refuse to cut spending; (4) the Governor from either party threatens to close the schools, release the prisoners and starve the poor. Blah Blah Blah.
Today ABC managed to get my attention by adding a tiny but significant piece of context to the story. By simply reporting the size of the budget and the budget deficits they have managed to convey the magnitude of the crisis in practical terms.
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California: $53.7 billion shortfall or 58 percent of its budget
Arizona: $4 billion shortfall or 41 percent of its budget
Nevada: $1.2 billion or 38 percent of its budget
Illinois: $9.2 billion or 33 percent of its budget
New York: $17.9 billion or 32 percent of its budget
Alaska: $1.35 billion shortfall or 30 percent of its budget
New Jersey: $8.8 billion or 30 percent of its budget
Oregon: $4.2 billion or 29 percent of its budget
Vermont: $278 million or 25 percent of its budget
Washington: $3.6 billion or 23 percent of its budget
Connecticut: $4.1 billion or 23 percent of its budget
As ABC also noted these deficits are almost exclusively caused by massive revenue drops in these states. Tax revenue has simply dried up. In some cases the revenue drops are the largest in history (including the Great Depression).
Federal revenue, both on budget and off budget, is down 18 percent this fiscal year as compared to the same period last fiscal year. In April, the month where personal income tax revenue flows into federal coffers, tax revenue dropped a massive 34 percent from $404 billion in 2008 to $266 in 2009. This is the largest drop reported in the Monthly Treasury Statements since their inception in 1980.
With these historic revenue drops triggering state budget crises one thing is clear: This is not your father’s recession.
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17 Responses to “Not Your Father’s Recession”
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July 8th, 2009 at 5:07 am
Obama wants more stimulus! Perhaps a 100 Gogol budget deficit will be enough?
Stimulus… some would say having something shoved in your anus would be stimulating, but it still wouldn’t get rid of the fact that you’re getting F*CKED!
pitofdoom Reply:
July 8th, 2009 at 10:51 am
The last stimulas by Obama’s own words “has done it’s job, preventing layoff’s of local teachers, fire & police.” I call that a union BRIBE!!
misunderstood genius Reply:
July 8th, 2009 at 2:30 pm
a few of my neices and nephews are home schooled. and now in college receiving 4.0 perfect grade point averages. this I hear is the rule not the exception in these cases. combine that with our criminal occupation of afghanistan and our military selling these drugs in our high schools, that is one area ripe for no funds at all. we can do better with no funds. also just legalize drugs , and stop spending money on repaving roads that don’t need repaving, they are doing that now in my area. we have bridges about to collapse, but they repave roads in perfect condition.
July 8th, 2009 at 6:05 am
A cool way to understand large numbers and have it sink into your head is to realize how old our planet earth is. Earth is 4.5 Billion years old. That’s such a long time that scientist refer to it as “deep time”. All dinosaurs became extinct 65 million years ago. The super volcano Toba covered the planet in a yellow toxic haze 75,000 years ago dropping the population of human’s to just “30 reproducing females”. Since then our population grew to 6 billion. Then just 11,500 years ago in North America, animals such as the Wolly Mammoth, sabertooth cat, and the giant sloth all became extinct suddenly. With these numbers in mind think of the conseqences of a 12 TRILLION dollar national debt! We have Dick Cheney and Iraq to blame. We have Goldman Sachs treachery to blame. And W Bush the dope who did nothing.
pitofdoom Reply:
July 8th, 2009 at 10:53 am
We’ve got at least 60 yrs. of corruption to blame!
Madman Reply:
July 8th, 2009 at 12:47 pm
60 years of corruption to blame, and only ONE way I know to get rid of it.
The same way the country was formed 200 + years ago…
Revolution.
July 8th, 2009 at 8:30 am
Our children and Grandchildren will be the ones made into the slaves to payoff the looting by the banks in the “Great Federal Reserve Heist of 2008/9″.
How much money do they have to steal before you finally say…….ENOUGH?!?!?!?!?!?!?
pitofdoom Reply:
July 8th, 2009 at 10:53 am
How much is your soul worth?
July 8th, 2009 at 9:45 am
Give Obama the stimulus!! You know you want to! You know it! Come on, don’t lie to yourself. We are all here just living and watching the world come apart around us anyways, so why not? It’s not like anything you or I say or do (short of riot) matters anymore. You think Obama gives a flyin F? You think he cares what YOU believe or have to say? You honestly think there is ANYTHING you can do to stop him now? He has his 4 years, congress will not impeach him – his masters have made sure of that. He knows he only has those 4 years to bring the U.S. down in a burning heap and that’s why he has hit the ground running HARD and FAST.
After all, if you want to build a NEW house designed and molded to your liking (NWG) you have to first tear down and destroy the old house sitting on the property so you can start building. The new house design has been done for awhile now. And finally the bulldozer has arrived. Let him who has ears to hear understand.
pitofdoom Reply:
July 8th, 2009 at 10:57 am
Nancy, Harry & Obama, Pass & Sign it all, with every drop of ink you’ve got!
Rather then “We the people” going out leaf by leaf, let’s all go together,
you know that bi-partisan we’re all in this together kind of exit!!
Illusion solutions, Thank’s may we have another…..
misunderstood genius Reply:
July 8th, 2009 at 2:39 pm
werd, word man. your right. I don’t think we need to convince these people with reasoning. It’s plain as day a lot of the stuff going on is ludicris. I like the way you put it werd, let him who has ears to hear understand. you know what needs done. but we can’t say it.
July 8th, 2009 at 10:01 am
You absolutely have to starve the populace of liquidity in order to force the sale of the plum assets for next to nothing. As I’ve said before, the real bargains don’t happen until the populace has been literally starving for a decade. We aren’t even close. Of course, we saw some early fire sales in the banking sector, when the largest retail bank presence in the country was bought for a giveaway in a “crisis”. Expect far more of these sorts of, “huh?” moments over the next few years, as the rhetoric is all about stimulus, but the reality is tightening.
The way it was done in the depression was higher taxes, protectionist tariffs, and devaluation of the dollar, coupled with increasing margin requirements at banks (thereby draining circulation of yet more dollars) and the government hoarding tax revenues as opposed to redeploying them into circulation.
Today, we have the Fed secretly, and for the first time in history, paying interest on deposits, thereby eliminating any real reason for banks to deploy capital, except maybe by investing in T-bills for a sweet risk-free arbitrage. The system is now set up to keep money out of circulation. It’s working, far as I can tell. Next come higher taxes, and then protectionist/nationalistic trade wars designed to strengthen domestic monopolies at the expense of free trade and general prosperity.
Wouldn’t entirely surprise me if they made physical gold illegal again, although there isn’t much basis for doing so, and they can accomplish the destruction of commodities values much more effectively via derivatives, which is how it’s all done these days.
So look for continued and rising unemployment, deflation in assets even as the Fed prints more money but the banks hoard it, tightening credit for the same reason, and the entire media/government apparatus to pretend to not understand what is happening, even though the government and its banking masters engineered it.
And don’t hold your breath for any investigations into Bear or Lehman or Fanny or Freddy or Wachovia trading to ever surface, nor any into oil manipulation. That’s off limits, clearly.
Pretty F-d up world, but there you have it.
pitofdoom Reply:
July 8th, 2009 at 11:03 am
Oil in the 20th & Technology in the 21st, moves caesars court ever further from “We the people”.
Where’s the class action law suit of “We the people” Vs. Corp/Got’s corrupt wall street?
July 8th, 2009 at 10:49 am
The great depression’s a cake walk compared to where we’re headed!
Also remember that the “farm” was an escape, no longer concrete boy!
If “we the people” were ever at caesars mercy it’s NOW!!
Madman Reply:
July 8th, 2009 at 12:49 pm
Well, after the looting, and shooting… perhaps there can be born a new revolution!
Fight or Die, keeps coming to mind.
pitofdoom Reply:
July 8th, 2009 at 1:04 pm
remember caesar loves you, please be quiet little property.
July 9th, 2009 at 2:57 am
THE HOLY QURAN SPEAKS ABOUT WEALTH
lo! We have given thee Abundance;
2
So pray unto thy Lord, and sacrifice.
3
Lo! it is thy insulter (and not thou) who is without posterity.