Did the media (including Fox News), the politicians of both parties and the media pundits lie to you that the US would/could default on its debt? Alan Greenspan said on Sunday,""The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default."
Are New York politicians or the sycophant New York media to be trusted? Will New York debt be downgraded? Unlike the federal government, New York can quickly default.
Here's a buyer's guide to New York State bonds or more likely a seller's guide:
1.NY Businesses Howl At $21.25 Per Worker, While Cuomo's Budget Will Require An Additional $478 Per Worker In November.
2. New York State has the highest debt per person in the USA ($24,195) and the second highest taxes per person ($6,884). Andrew Cuomo's Budget director says, he has no ability to finance spending commitments already. This was recorded at a 7/20/2011 hearing of Cuomo's Commission on Judicial Compensation: "We don't even have the ability to finance the spending commitment that are already in place, said Robert L. Megna, who was speaking on behalf of Governor Andrew Cuomo, who appointed three of the commission's seven members."
3. Cuomo's New York Comes In Second To New Jersey For The Most Taxes Per Person. New York's Taxes paid by residents as percentage of income are 12.1% "The state [NY] has one of the highest state and local tax collections per capita, an average of $6,884. According to the Census Bureau, the top ten counties in the U.S. with the highest property taxes as a percentage of home values are all in New York."
4. Rating Agencies Informed As Cuomo's Budget's Imagined $ 4.3 Billion In Revenue Increases Disappears
a. The Cuomo Business Friendly Bubble Burst, when NY was ranked 49th out of 50 States as Business Friendly. While the Cuomo stooge at the NY Economic Development Agency described his own policy as "anyone proposing nano-scale technology in Syracuse should be taken out to the woodshed."
b. Cuomo's expected tax revenues took another dive into red ink with latest report. "A gauge of manufacturing in New York State showed the sector unexpectedly contracted for the second month in a row as new orders worsened, while core inflation rose at its highest pace in three years."
c. This business contraction affects the revenue increases which finance Cuomo's spending. Cuomo had balanced his budget with imagined revenue increases and Cuomo used temporary sources for 14.7% of his budget revenue, such as, Federal stimulus money (threatened in present federal debt debate), "voluntary contributions" from NY Power Authority and other authorities (they'll charge you higher rates) and delaying paying NY State Income Tax refunds.
d. Cuomo's unrealized revenue fantasies reported by the Comptroller include:
i. Personal Income tax receipts in 2011-2012 will increase $2.9 billion or 7.9% (but decreased employment reported)
ii. User taxes and fees (sales and tobacco taxes)will increase $467 million or 3.3 % (but tobacco tax increase will fail link 1 link 2 and workers earning less or unemployed spend less)
iii. Business taxes will increase $894 million or 12.3% (but business declines)
iv. Payroll Tax will increase $63 million or 4.6% (but, rising unemployment including State layoffs decrease payrolls)
A budget shortfall of $4.3 billion dollars must be borrowed this year.
5. New York Pension Books are Cooked
6. Cuomo has a "funds shift [that] would result in the use of state bond proceeds for payment of a portion of debt service on MTA revenue bonds."
7. Cuomo's budget used the "Madoff-like" assumption of a 7.5% safe return on pension investments. and continues to allow borrowing to fund contributions.
8. Cuomo failed to budget in the required repaying of the federal government for Medicaid frauds. This is minimally estimated at $6.4 billion.
Finally, 9. Who'll repay the bonds? New York Exodus As Tax Payers Flee At The Highest Rate In USA. New York State businesses also will flee. Small-business lobbyist Mike Durant noted, New York has "consistently ranked worst or in the top three worst in business climate. You can't suck every penny out of people and expect them to remain in New York."
cc: Moody's, Fitchs , Standard and Poors