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Are you ready for the next bailouts????

Discussion in 'Politics, Elections & Legislation' started by bigdogtx, May 25, 2010.

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  1. bigdogtx

    bigdogtx Well-Known Member

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    Hope your kids and grandkids have the K-Y Jelly ready....Looks like Michigan may be the first....


    Last Updated: May 20. 2010 8:27AM .Nolan Finley
    The bell is tolling for Michigan

    If you fear you're in danger of succumbing to optimistic urges, give Bob Daddow a call. He'll take the starch right out of you.

    The Oakland County finance guru could fill in when the Grim Reaper goes on vacation. He's gloomy enough to be a Dickens character.

    For good reason. Daddow has divined the numbers, and they've revealed to him an economic disaster of apocalyptic proportions in Michigan's near future. Or, as he says: "We're screwed and tattooed."

    Daddow, Brooks Patterson's deputy county executive, warned at this week's Business Leaders for Michigan forum that the crisis clock is ticking toward midnight. Without immediate, aggressive action to reform government and slash long-term pension and health care obligations, the state and its largest city will fall over a cliff.

    "For Detroit and its school system, absent a huge bailout by the federal government followed by serious reform, I don't think they'll make it," Daddow says. "As for the state, it's right on the cusp of being too late."

    Here's how Daddow comes to those cheery conclusions:

    • Michigan has been on artificial life support for two years, continuing to breathe with $3.8 billion in Obama bucks. It has just $393 million left for next year, and in 2012 the bailout money will be gone. But the $1.2 billion deficit will still be here. For seven of the past nine years, the state has used a web of financial gimmicks to make its budget look balanced. That's left it with a cash flow shortage -- last year's was $1.4 billion -- that's covered through borrowing. Interest on the loan last year was equal to the cost of roughly 200 state employees.

    • By next year, Daddow estimates half the school districts in the state will be in deficit. Because of their shaky financial structure, risk-adverse banks aren't likely to lend them money to keep operating. Schools may squeeze through 2011, Daddow says, but by 2012 they'll be smack up against insolvency.

    • The unfunded pension liability for state and school employees is pegged at $11.6 billion, and the future health care liability is between $45 billion and $50 billion. If the state started meeting its obligation today, it would take $2 billion a year for 30 years to get even.

    • Half of the job losses in the United States over the past decade have come in Michigan. The state started the decade with a $3 billion surplus in its unemployment trust fund. It now owes $2.4 billion to the federal government, a debt Daddow estimates will take 10 years to repay through $84 million annually in new business taxes. That added cost will make the state less desirable for economic development.

    • Tens of thousands of properties in Detroit are worth less than their annual tax bill. Last year, 17,000 parcels came to the city for unpaid taxes, at a cost of $57 million. The high rate of tax forfeitures makes it harder for buyers to get mortgages, further eroding property values.

    • Property values statewide continue to plummet, depressing tax revenues. Daddow projects a 12.25 percent decline in property tax revenues for Oakland County in 2012. Oakland is the state's most prosperous county; expect the declines everywhere else to be steeper. Daddow estimates it will take 11 years of healthy economic growth to return property values to their 2007 levels.

    "I haven't slept well for years thinking about all this," he says.

    Neither should anyone else. Michigan got to this point because its citizens allowed political leaders to do a Scarlett O'Hara act, choosing to worry about the fiscal problems tomorrow. Well, tomorrow's here.

    And yet the scariest part is that the politicians have all seen these numbers, and are still avoiding the massive restructuring that is the only way to avert catastrophe. They're still allowing the special interest parasites to suck Michigan dry.

    That's what makes this fall's election so vital. Voters shouldn't cast a ballot for anyone who doesn't commit to the pain and sacrifice necessary to make things right. We no longer have the luxury of denial.



    From The Detroit News: http://detnews.com/article/20100520/OPINION03/5200336/The-bell-is-tolling-for-Michigan#ixzz0ozzI6oqU
     
  2. Mapper

    Mapper Member

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    Bigdog,
    Things surely are not too good here in the Water, Wonder, Wolverine land. Granholm
    pledged to not raise taxes and to her credit, she has not raised general taxes. All sorts of fees, drivers license, etc have gone up but not general taxes. I sort of wish she had. I do not see a good ending here. We, and all states, have these Federally mandated programs that were absent during the last "big one". And most of the unions don't want to be the first one accept a pay cut. The Detroit area looks like WWII Europe. I'm sure glad I went to engineering school, instead of taking up government, cause I wouldn't know where to start.
     
  3. highflyer

    highflyer TS Member

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    I am waiting for the one government bailout that would make some sense to me and help me in my life. When is the government going to pay for my shooting or my shells. I am so tired of paying my taxes and watching everyone but me getting money back from the government. I see the government as a giant black hole sucking up and wasting money by the trillions. I would rather waste the little bit of money I have blowing up clay targets.
     
  4. daddiooo

    daddiooo TS Supporters TS Supporters

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    Senator Conyers couldn't find his own butt with both hands, a search warrant and Obama's teleprompter.

    Michigan needing a bailout???? Call your union buddies that ripped us all off during the auto bailout and then renigged on their agreement. Michigan shouldn't get one dime of taxpayer or government money. The only good thing that's happened in Michigan lately is your boy Kwame went to jail for 5 years and the Great Lakes Grand.

    My apologies to the GOOD folks who live there and had no hand in the financial ruin of a once great state.

    Last one of of Michigan turn out the lights.
     
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