The Prodigal Cuomo Is Broke And Temporarily Survives By Not Paying Bills

The poor is hated even by his own neighbor, but the rich hath many friends.~ Proverbs 14:20.

       The Prodigal Cuomo's spending has the State finances on a razor edge according to Comptroller DiNapoli.  But the reality for Cuomo and DiNapoli is the State is already in the red.  The gimmicks, fantasy revenue expectations and unpaid delayed bills do not balance a budget.  Specifically,
1. There are $500 million in delayed personal income tax refunds.
2. Franklin County County Manager and Budget Officer Thomas Leitz said the state owes the county reimbursements for services it has already provided through its Department of Social Services, its Nursing Home and the Public Nursing Services... as of last Thursday, it is owed $3.8 million from Albany.
3. Clinton County is owed about $6.1 million, according to the County Treasurer's Office.
4. There are 40+ other counties owed money by NY State.
5. The State budget expected a growth in income tax revenues to follow from National growth and that fantasy is now devastated as Billionaire investor George Soros said he believed the United States was already experiencing the pain of a double dip recession.
6.  NYS Income tax revenues from NYC financial businesses are a major source of NYS revenues, but how do they earn money if investors are dumping everything.
7. Expected increases in Sales tax revenue is another budget pipe dream as "Consumers earned less and spent less ... The government data shows how Americans are struggling after the worst recession since the Great Depression.The Labor Department says in its annual survey of consumer behavior that spending fell 2 percent last year."

    Comptroller Dinapoli had said, "Still, the Blue Chip consensus economic forecasts for growth continue to be revised downward, raising concerns for the remainder of the fiscal year.”
     Will Comptroller DiNapoli have this honest talk with the Prodigal Cuomo?

"The State's in the red.  We're not paying our bills.  Our hoped for income tax revenue increases have become decreases.     And sales taxes going up?"

Then when Prodigal Cuomo finishes crying, DiNapoli must continue with,  "You felt great as the Big Man who spent lots of money after Hurricane Irene. Now it has to be paid for and FEMA local and state grants require a 25% contribution.   The Big Man has to come up with the money, too"

Will the People still love you, Andrew, when they have to pay the bills? 

P.S.  We can't borrow more.  New York Debt per person including local debt is $24,195. For a family of four that is about $97,000. (New York leads California in official debt per person by 29% and the debt is greater than the average for all States by 73%.)

 

Andrew Cuomo needs lots of "Ron Pauls"

Humpty Dumpty sat on the wall

Humpty Dumpty took a great fall

  Up to the mythical bar in the Sky strutted Andrew Cuomo, the big man in New York.  He tamed the State's budget crisis.  He appointed committees to fix everything.   He rebuilt the infrastructure damaged by Irene and prepared for his ascension to president.    But like all prodigal sons, the end was unexpected.  Will his friends who he bought drinks for at the bar love him when he asks them for money?
     Back on Earth, Comptroller DiNapoli at Cuomo's "Ministry of Finance and Hope" has shown his "prodigal prudence" by lowering his estimate of safe Pension fund returns from 8% to 7.5%.   Will DiNapoli be able to get Madoff freed from jail to help obtain this 7.5% safe return.    There are lies, damn lies and finance weasel's doublespeak.  The following words of DiNapoli were issued from the "Ministry of Finance and Hope:" 
   "DiNapoli: State’s finances on a ‘razor-thin’ margin"
1. “Revenue collections, as anticipated, have grown from last year,” 
2. “Still, the Blue Chip consensus economic forecasts for growth continue to be revised downward, raising concerns for the remainder of the fiscal year. We should be prepared for the possibility that revenue growth may falter, requiring downward adjustments to the Financial Plan.”
3. The General Fund ended August with a balance of $1.6 billion, $0.7 million lower than projected in the Financial Plan updated August 2.  Receipts, including transfers, grew $3.1 billion over last year primarily because of higher personal income tax (PIT) collections in April and $500 million in delayed refunds that lowered last year’s revenue. PIT collections ended the month $45.2 million lower than the latest projections. Spending, including transfers, increased $1.2 billion (5.5 percent) from the same period last year and was $77.4 million below projections, primarily because of local assistance and transfers to other funds.
   Or translating from Weasel, the budget isn't getting the expected revenues; we booked $500 million in delayed tax refunds as revenue when it is an unpaid expense (luckily no jail, like in private business); and we didn't transfer money we were supposed to to other accounts.

     Meanwhile back at the mythical bar, Cuomo and DiNapoli ordered two stiff drinks and discussed the news on Earth:
1. In Rhode Island, General Treasurer Gina Raimondo is calling the state's underfunded pension system a "death spiral"   and the State of RI went to court and lost when, "A Rhode Island judge has ruled in favor of state employee labor unions in the first round of a major legal challenge to state pension reform."

DiNapoli: "They used 8% and I'm using 7.5%. Hick"

Cuomo: "In NY, unions needn't go to court because pensions are protected in our NY Constitution.  What's a death spiral?"

2.  "The president urged Congress to pony up roughly $200 billion in taxpayer money to "provide more jobs for teachers [and] more jobs for construction workers" and more money to carry out other state and local activities. 
These vast contributions to the coffers of state and local governments, though pitched as a jobs bill, are in reality the latest in a series of bailouts for debt-ridden state and local governments. They are of special benefit to states in the blue regions of the country where the president's most fervent supporters reside."
DiNapoli: We need that money or we're broke. Give me another shot.
Cuomo: [animated] They'll never cut me off I'm Andrew, Son of Mario, future President, New World Order Leader.

3. "Stock futures are plummeting after the Federal Reserve indicated the U.S. economic slump could last for years.

The Fed took steps to stimulate the economy Wednesday that had largely been expected. But investors were troubled because the central bank's statement showed it expected a deep and persistent downturn."

Dinpoli: We needed a recovery; we needed growth; we needed their money.  [Orders a double}
Cuomo: {gulping down his drink] The world will change.  My daddy told me I'll rule.  Let them work harder.  The world and I need their money. 

4. "Call it the recession's lost generation.  In record-setting numbers, young adults struggling to find work are shunning long-distance moves to live with Mom and Dad, delaying marriage and buying fewer homes, ... They suffer from the highest unemployment since World War II and risk living in poverty more than others - nearly 1 in 5.   ...  recent college grads now getting by with waitressing, bartending and odd jobs, they will have to compete with new graduates for entry-level career positions when the job market eventually does improve."

DiNapoli: I want to cry at home.  The retirees are fleeing NY.  The young have no hope. Who's going to pay our bills?  

Cuomo; They're not a lost generation; they have me!

Bartender hands check to the Big Man

Cuomo; Don't give me the bill; give it to him.
DiNapoli: What do you mean, no IOU's and you'll only take a Ron Paul? link

Prodigal Andrew Cuomo Is Spending And Spending

   The Albany Follies Show's expenses continue their steep climb.  Where will Cuomo get the money, when Cuomo and Silver hacks give 27% raise to judges over three years.  That was slightly less than the 31% expected by Chief Judge Lippman as reported here in Cuomo And Chief Judge Lippman Dance Around Phony Budget Numbers On The Albany Titanic Barge which described The earlier Albany Follies Show as:

     Cuomo struts out looking tough by forcing a 7.5% decrease on Courts' budget.  The first scene's script had Lippmann wanting only a 3.7% decrease and Cuomo wanting a 10% decrease and 7.5% compromise resulted. (Applaud, please)     But, the final scene has the surprise ending when, Lippman expects a Commission to give raises to the 1,300 Judges, with pay for Supreme Court Judges rising from $136,700 to more than $179,000 or 31% increase or $48 million dollars in judicial salaries to added to Lippman's budget.

     So now, 1. Judge Lippman gets more cash and Cuomo now needs $14 million dollars to pay judges 9% more this year.

2. Cuomo's forgot contingency funding this year for the Judges who are suing for $780 million in back pay which will be added to the years budget deficit.

3. Cuomo forgot to include in his NY State budget increased spending for all state workers' pension contributions by 3.6% as reported on this blog earlier. 

4.  New York economy takes MULTI-BILLION hit from Irene on vital weekend... as experts warn U.S. clean-up cost will outstrip Katrina

Bye, bye, Cuomo's balanced New York State budget.

Hello, more unexpected taxes and bond sales?

P.S. Why did Cuomo drop the ball on Lippman?  Andrew Cuomo had promised to clean out corruption in Albany and that is impossible if the New York Courts are run by a Crook as Chief Judge.  See Chief Judge Lippman must step aside pending FBI probe.
Will Cuomo drop corruption ball

New York State Will Likely Default And Rating Agencies Will Be Liable If They Fail To Properly Rate NYS Bonds

Copy of letter sent August 16, 2011

To: Moody's Investors Service, Inc.,101 Federal Street, Suite 1900, Boston, MA 02110
Standard and Poors, 55 Water Street New York, New York 10041
Fitch's, One State Street Plaza,  New York, NY 10004
Dagong Global Credit Rating Co.,Ltd
29/F, Unit A, Eagle Run Plaza, No.26 Xiaoyun Road,Chaoyang District,Beijing, P.R.China 100125

Re: US Rating agencies will face a large liability for improper ratings for NY State Bonds. Default/bankruptcy coming shortly. Catastrophe in waiting: Average NYS non-financial sector income of $50,400 a yr. results in less net income than average NYS dole benefit of $42,000 a yr.


Dear Rating Agencies:
       How long do the rating agencies think this can continue in NY State?  While NY State pays the average public assistance person $42,000 a year in benefits according to Lou Dobbs's radio show on 8/15/2011, the average non-financial sector NY State income was $50,400.*  And NY State relies more heavily on personal income tax for its revenue than other States.*  When will the federal government cut off NY State's Medicaid program which is run as a fraud, where NY State mischarges the federal government $22 billion dollars to fund its non-medicaid State budget?  Andrew Cuomo's business friendly NY has fizzled.  Meanwhile, Andrew Cuomo failed to begin to change the NY Constitution to end unaffordable pension costs.

      "A word to the wise is sufficient."  The US based rating agencies will have a large liability, if NY State bonds are improperly rated.  The future possibility of repaying NY State bonds not backed by a dedicated revenue source is non-existent.  NY State bonds finance State agencies as well as State government.  Some bondholders, such as Thruway bonds or Dormitory bonds, receive first dibs on revenues, if the State doesn't pay on time.  Other bonds are backed by the full faith and credit of NY State without a dedicated revenue source.  But if the State doesn't have enough cash in revenue, how can it pay?

These are the details:
First, this is the text from NY State Constitution: §7. After July first, nineteen hundred forty, membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired. (Adopted by Constitutional Convention of 1938 and approved by vote of the people November 8, 1938.)

  Then, in regard retiree costs:
  1. Although, Chris Christie reformed pension and benefit costs in New Jersey, Andrew Cuomo failed to ask this session of the Legislature for a Constitutional Amendment to change the above clause which prohibits NYS from changing any retirement contractually promised benefits, such as Health Insurance and Pensions.  Such an amendment must first be passed by this and then the next legislative session and then finally approved by the voters. 
http://cuomotarp.blogspot.com/2011/08/rating-agencies-informed-as-new-york.html

    2. NY State has not funded its retiree health benefits which were part of State workers' contracts with NYS and are constitutionally protected.  NewYork Adds $56.3 Billion To Its Unfunded Liabilities

    3. NY State's pensions are a Madoff style Ponzi scheme where NYS promises a 7.5% "safe return" when that is impossible.  All the undeposited funds needed to properly fund the pension funds and the losses of up to $7.3 trillion dollars are liabilities of NYS.  Any higher taxes to fund this shortfall would create a stampede of taxpayers getting out of NY State..

Then in regard taxpayers

    4. Taxpayers are fleeing NYS at the largest rate in the USA.   Who'll repay the bonds?

    5. NY State has the highest local and State debt per person and the second highest taxes paid per person of any State but New Jersey.    New York Debt per person including local debt is at $24,195. For a family of four about $97,000.   Will NYS raise taxes even higher and borrow more?

    6. Andrew Cuomo will not attract business or its potential taxes to NYS because NYS has the next to lowest business friendly rating of all the States.   When NY businesses repay the $ 3.6 billion dollar Unemployment Insurance loan to the Federal government this November 2011, NYS will become a business pariah.

    7. What happens when the millions of NYS taxpaying residents earning the average non-financial $50,400 or less discover their net income is less than the average dole recipient's $42,000 a year?   Do they leave the State or go on the dole?

  Then, in regard State revenues:   
   8. The NY Comptroller predicts rising numbers of non-taxpayers in the NY State Medicaid system*.


   9. NY State funded 14% of its budget this year with one time funds that will not be available in future years.

   10. 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."


    The Bottom Line:

• a rapidly rising NYS expenditure for retiree and others' benefits
• a reduced number of businesses in NYS paying taxes and paying workers
• more NYS Medicaid non-taxpayers
• taxpayers fleeing the State
• NY State will run out of cash from its diminishing revenue sources
• NY State either defaults or goes bankrupt if Congress enables State Bankruptcy by a new law
• a tax revolt when those millions earning the average non-financial income of $50,400 or less realize that the average NYS dole recipient receives $42,000 yr. in benefits

 And the US rating agencies would be sued by all the suckers still holding devalued and defaulted NYS bonds.   And Dagong may have protected foreign investors and exposed the hopeless finances in New York State.

Sincerely yours,

CuomoTARP.blogspot.com

*See Financial Condition Report for Fiscal Year 3/31/2010

P.S. Please access website for working links to all data.  

NY Will Follow Greece; NY Budget Director Reveals NY Can't Finance Budget; Congress Asked for State Bankruptcy Law

  A follow-up letter to Bond Rating Agencies and Congress was faxed/or mailed.
 
Dated 7/26/2011
 To: Michele Bachmann, Ron Paul, Allen West, Thaddeus McCotter, US Representatives;  Rand Paul, David Vitter, Jim DeMint, Senators; Moody's, Fitch and Standard+Poors;
and Harry Reid, Majority Leader; Mitch McConnell, Minority Leader; John A. Boehner, Speaker; Eric Cantor, Majority Leader; Darrell Issa,Chair House Oversight and Government Reform; Lamar Smith, Chair House Judiciary; Patrick J. Leahy, Chair Sen. Judiciary; Charles E. Grassley,Sen. Judiciary; Paul Ryan, Chair House Budget; Harold Rogers,Chair House Appropriations; Kent Conrad, Chair Sen. Budget; Jeff Sessions, Sen. Budget; Daniel K. Inouye,Chair Sen. Appropriations; Thad Cochran,Sen. Appropriations; Tom Harkin, Chair Sen. Health; Michael B. Enzi,Sen. Health; Chris Van Hollen, House Budget; Spencer Bachus,House Financial Services; Barney Frank, House Financial Services; Max Baucus,Sen. Finance;Chuck Grassley, Sen. Finance

Re: Greece in the USA; NY Budget Director can't finance NY budget; bankruptcy law needed

Dear Congressman and Rating Agencies:

       Moody's reports default on Greek debt almost certain.   New York State has the highest debt per person in the USA ($24,195) and the second highest taxes per person ($6,884).  This is a Heads-up call to Rating Agencies and Congress that New York State has run out of money and a Greek-like bail-out request is coming.  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." You can hear his testimony from 00:32:34 to 00:56:17 at
http://pointers.audiovideoweb.com/stcasx/va91win1520/Judiciary07202011edit.wmv/play.asx


      Andrew Cuomo claims to balance the State Budget and then approves a Commission to raise judges' pay by 61%, when he can't even pay for the items already in his budget.  Sorry, Andrew, if you can't finance your spending commitments, you're broke and will run out of money like Greece.    New York State needs the option to go bankrupt and I've copied a condensed version of my earlier faxed 1/26/2011 letter to Congress, with the simple changes necessary to create a Chapter 10 Bankruptcy for States.  link to 1/26 fax post


[condensed] FAX sent dated: 1/26/2011
 Someone needs to get the bankruptcy ball rolling; so here goes.  A Primer for a State's Bankruptcy:

Why?   New York will go bankrupt because Cuomo is not acting to easily correct $28 Billion dollars Medicaid excesses in NY compared with others States (California).    His proposals to dismiss 12,000 State employees might account for $1.2 billion dollars saved.   That's $1.2 billion out of the $10 billion he claims is the budget deficit.  So, Cuomo runs out of cash.  But, he's not alone, several governors will join him.  They need a cover, who'll stiff the State bondholders and redo employee contractual benefits and pay.  It's not me (your beloved Elected Governor), it's the bankruptcy judge.

Is it Constitutional?  Yes, because the law proposed below was only modified by replacing the words referring to a State's municipality, with the word(s) referring only to a State.   "The first municipal bankruptcy legislation was enacted in 1934.   ..., the Supreme Court held the 1934 Act unconstitutional as an improper interference with the sovereignty of the states. Ashton v.Cameron County Water Improvement District No. 1,  [Then] Congress enacted a revised Municipal Bankruptcy Act in 1937, ... which was upheld by the Supreme Court. United States v. Bekins."

                [note:Chapter 9 is the existing law for municipal bankruptcy]
How?  The proposed Chapter 10 for States has identically to the existing constitutional Chapter 9, no provision for the sale of assets, nor for such to be given to creditors. Just as in Chapter 9, the bankruptcy court cannot actively mange the State's affairs, and can only approve a reorganization plan submitted by the State. And as in Chapter 9,; the State can use the bankruptcy court to enforce court orders and preclude any connected litigation elsewhere and change contractual agreements.

Details In the proposed Chapter 10:
1. The bankruptcy judge is assigned by the Chief Federal Judge of the State;
2. A list of all creditors can be filed after filing bankruptcy petition;
3. Automatic stays of all collections against the State can be stayed; the court can fix time and manner of the filing of all claims against the State;
4. Only the State and not creditors, nor someone appointed by the bankruptcy court can propose a settlement;
5. The State retains its powers to use its property, raise taxes, and make expenditures and change non-debt contractual relationships;
6. The State can reject collective bargaining agreements and retiree benefit plans;
7. Interested parties may be heard, but no one but the State can file a PLAN for resolution of the debts and obligations.

Proposed Chapter 10:
I've copied sections of the Federal Bankruptcy law for Chapter 9 and would remove text in blue and insert the red text.  Other parts of this Chapter 9 would remain unchanged and be renumbered from  §§ 901-946 to §§1001 to 1046

TITLE 11 CHAPTER 9 10
  CHAPTER 9  10—ADJUSTMENT OF DEBTS OF A MUNICIPALITY STATE
SUBCHAPTER I—GENERAL PROVISIONS (§§901-904 1001-1004)
SUBCHAPTER II—ADMINISTRATION (§§921—930  1021-1030)
SUBCHAPTER III—THE PLAN (§§941—946  1041-1046)

903.1003. Reservation of State power to control municipalities Sovereign power

This chapter does not limit or impair the power of a State to control, by legislation or otherwise, a municipality of or in such State in the exercise of the political or governmental powers of such municipality, including expenditures for such exercise, but— such State, a State law prescribing a method of composition of indebtedness of such municipality of such State may not bind any creditor that does not consent to such composition; and (2)a judgment entered under such a law may not bind a creditor that does not consent to such composition.

904. 1004. Limitation on jurisdiction and powers of court
Notwithstanding any power of the court, unless the debtor consents or the plan so provides, the court may not, by any stay, order, or decree, in the case or otherwise, interfere with—any of the political or governmental powers of the debtor State; the debtor’s use or enjoyment of any income-producing property; the sovereign immunity of such debtor State.

921. 1021. Petition and proceedings relating to petition 109(d) and 301 of this title, a case under this chapter concerning an unincorporated tax or special assessment district that does not have such district’s own officials is commenced by the filing under section of this title of a petition under this chapter by such district’s governing authority or the board or body having authority to levy taxes or assessments to meet the obligations of such district.  State.
(b)The chief judge of the court of appeals for the circuit embracing the district State in which the case is commenced shall designate the bankruptcy judge to conduct the case. After any objection to the petition, the court, after notice and a hearing, may dismiss the petition if the debtor did not file the petition in good faith or if the petition does not meet the requirements of this title.
If the petition is not dismissed under subsection (c) of this section, the court shall order relief under this chapter notwithstanding section (b)The court may not, on account of an appeal from an order for relief, delay any proceeding under this chapter in the case in which the appeal is being taken; nor shall any court order a stay of such proceeding pending such appeal. The reversal on appeal of a finding of jurisdiction does not affect the validity of any debt incurred that is authorized by the court under section (c)or (d)

927. 1027. Limitation on recourse
The holder of a claim payable solely from special revenues of the debtor State under applicable non bankruptcy law shall not be treated as having recourse against the debtor on account of such claim pursuant to section (b) of this title.


[January 2011]By Fax to Chairman and ranking Minority Member of Senate and House Judiciary Committees and the Senate Subcommittee on Administrative Oversight and the Courts and the House Subcommittee on Courts, Commercial and Administrative Law
Patrick Leahy (D-VT); Jeff Sessions (R-AL)
Lamar Smith (R-TX); John Conyers, Jr. (D-MI)
Sheldon Whitehouse (D-RI); Howard Coble (R-NC)

[end of 1/26/2011 condensed fax]

         Here are Constitutional Considerations from blog post dated  1/27/2011  In regard the proposed Chapter 10 Bankruptcy for States:
       Why must Bankruptcy for States be different from ordinary bankruptcy? While, Congress has the power to make laws for bankruptcy under Article 1-Section 8 of the US Constitution, the States cannot make their own bankruptcy laws because of Article 1-Section 8 of US Constitution.  Without bankruptcy, States could not void or alter contracts with State employees or bondholders or other contract holders under Article 1-Section 10 of the US Constitution.   States also must honor the judicial acts of other States involving contracts with NY State under Article 4-Section 1 of US Constitution.   And States retain all sovereign powers except those removed by the Constitution based upon Amendment 10.

        The text of relevant sections of US Constitution:

                         Article 1
Section 8. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow Money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
Section 10. No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

                         Article IV
Section 1. Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records, and Proceedings shall be proved, and the Effect thereof.

                  Amendment X
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

    In conclusion, it would be easy to create a Chapter 10 bankruptcy for States.  Bankruptcy would allow New York State to alter its present contracts, change its employment contracts and make changes in NY's bondholder's rights, while still allowing NY State to keep its sovereignty as per US Constitution.  Also, the federal government would not need to bail-out New York State.  The bond rating agencies can update their ratings on New York debt.

Sincerely yours,

CuomoTARP.blogspot.com. [please access web site post dated 7/26/2011 for working links]

Cuomo's Pension Reform Is Too Little, Too Late And Fails To Solve New York's Huge Pension Debt Problem

Cuomo's acting is full of sound and fury and accomplishes nothing to solve already existing Pension Debts.   Can you do that song and dance routine again, Andy?  Or is the stale Albany dog and pony act next?

      Andrew Cuomo prances in the limelight futility attempting to close the Pension Barn Door after the pension dollars were already legally given away.    Cuomo failed to propose and begin in the NY Legislature the passage of a repeal of NY Constitutional Amendment §7.    Fixing the future is good, but ignoring the existing pension debt burden is a disaster.

     Cuomo's latest pension proposals to "increase the retirement age to 65 ...end early retirement, force employees to pay twice as much toward their pension, and end the “padding” of pensions through overtime pay, sick time and other means" will do nothing for any of the budget catastrophes described in this blog already.  All the debts, unfunded liabilities, and other improperly accounted budget items continue to insure default or bankruptcy.
Specifically,
1. NY forgot to fund $53 Billion in retiree health benefits. link 1
2. Block grants for Medicaid will cost NY $32 Billion dollars a year. link 2
3. $3 Billion in NY State Medicaid fraud must be refunded to the Federal government link 3
4. New York has the highest debt per person of US States at a total debt per person of $31,536, which must be added to USA debt per person of $44,805.  Now, multiple this total by four for a family of two adults and two children.   link 4
5. New York's unfunded pension liability of $143 billion dollars is combined with a Madoff-style assumption that 7.5% will be safely earned on pension investments when the latest return is 1.1%. link 5
6. Cuomo's budget had a fantasy forecast for increased tax revenues. link 6
7. Cuomo forgot he has to pay the federal government back $3.6 billion which was borrowed last year to fund unemployment benefits and is due by November of this year.  link 7
8. Cuomo's plan to attract business fizzles because of more taxes due next year for business. link 8
9. The young workers that Cuomo hopes to keep are planning to flee NY's taxes and dying business opportunities. link 9

      Bankruptcy is the only way out for New York, because of its Constitutional protection for pensions in NY Constitution § 7. ...membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired.

Proposed federal bankruptcy laws are described in this blog at link 9, link 10, link 11

Your act is over, Andrew, and the handwriting was on the wall in November.  link 12

News Reports Of NY Medicaid Excesses And Block Grants Will Sink Cuomo's Budget Into $32 Billion Dollar Default.

  
       The media is finally reporting that the NY Medicaid cat jumped out of the bag.  "New York spent $2,903 per person on Medicaid in 2010 — a third more than any other state. The U.S. average is $1,364. Nevada spent the least: $666 per person."    That means that if Medicaid is block granted to the States at the National average, NY will receive less and must fund the excess out of its budget and tax revenue. New York's Medicaid is capped at $60.4 billion.
So 1,364 divided by 2,903 x $60.4 billion = $28.38 billion.  or, New York must pay for an additional $32 billion ($60.4 billion - $28.4 billion)

link to Medicaid calculations

       Meanwhile, the Financial Barbarians of the World are at the gates of US debt financing and the prior trickle down effect will become a tsunami effect on States like New York which has the highest state and local debt of of $31,536 compared to USA debt per person of $44,805.    link
       New Yorkers cannot afford to pay the average cost of all government benefits in New York at $9,442 per person and lenders will soon all figure it out.

Here are the reports on the Financial Barbarians landing on our shores.
End of America as we know it
New York is the Greece among the US States and bond interest will skyrocket 
China will (is) selling its US debt and this will force rise in US interest rates 

The handwriting on the wall is coming true.
  Cuomo and NY Bondholders See The Writing On The Wall

Fitch Downgrade Adds $2.99 Billion in Deficit To Andrew Cuomo's Budget Farce

      The downgrading begins as Fitch begins CYA.  Fitch has announced, "In valuing pension liabilities in its credit analysis of states and local governments, the rating agency will now assume a return on assets of 7 percent, lower than the average return of 8 percent used by most pension plans. That translates to an increase in the average plan liability of 11 percent."
       This throws Cuomo's budget into the trash.  After Madoff, only a fool would accept even a 7% "safe" rate of return on investments as sensible.  NY State uses a 7.5% 'safe return on its pension investments.    But, NY's real rate of return was less than 4% for ten years.  Even worse, NY's return for past 5 years was 01.1%.   Link.

       New York's pension fund as of March 31 was nearly $56 billion below the level it would have attained if it had achieved its 8 percent target rate of return for the past five years.

     When Thomas DiNapoli lowered [from 8% to 7.5%] the expected rate of return for the state's $125 billion pension fund, ...[the State] contributed 88% of the $3.4 billion invested in employee pensions last year, according to the fiscally conservative Citizens Budget Commission.  So assuming another drop from 7.5% to 7.0% would require the State to contribute the same 88% of $3.4 billion, or Cuomo's budget just added another $2.99 billion in deficit.

The Hand Writing was on the Wall

Andrew Cuomo's Business Friendly Puff Pieces Fizzle As Reality Closes In

 Oh what a tangled web we we weave, when first we practice to deceive ~ Shakespeare

    Andrew Cuomo's business friendly with no tax increases puffing is about to burst.   His lackeys got puff pieces in the Wall Street Journal describing Cuomo as a “national spokesman for fiscal sanity” and in the National Review entitled “Cuomo the Conservative”  Abraham Lincoln has some timeless advice for Andrew, "You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time."

   As of January 21, 2011, New York State, one of 30 States, borrowed $3,343,758,375.70 from the federal government for paying Unemployment Insurance.  Six States, Maryland, New Hampshire, South Dakota, Tennessee and Texas, have repaid their loans in full.    And since Cuomo didn't budget for this in his budget, he must be planning to pass it through to NY businesses. From NY Dept. of Labor, "the number of private sector jobs increased 1% by 70,800," or the number of private sector jobs in New York is 7,008,000. Dividing $3,343,758,375.70 by 7,008,000 means an average $478 per worker is due from employers. Is this NY as business friendly?

       Did Cuomo fool his conservative/tea party supporters by having only a property tax cap passed by his request in the NY Senate?    Not really, when "UNYTEA’s Board of Directors has voted unanimously to endorse Governor Cuomo’s proposal for a 2% cap on property taxes, but only if it is accompanied by mandate relief."

        Ian Welsh describes Cuomo and his cronies as "the people who hollowed out the US economy and caused the financial crash don’t pay the price of their evil, but in fact stay in charge of society despite causing a Depression and being  bankrupt."   Welsh asks, "Andrew Cuomo: stupid or evil?"   It doesn't matter, because he won't continue to fool people for much longer.   It's Cuomo's M.O.


     Will new business delight that Cuomo's budget is smoke and mirrors and has ignored over $10 Billion in deficit in addition to the $10 billion that Cuomo claims and that the pension books are cooked.   Or that, Cuomo proposes to "eliminate a $10 billion dollar deficit without raising taxes or borrowing" and then he is borrowing $5.6 Billion dollars.

    Bob Brinker, this weekend, after hearing of all the great retirements for government employees, now recommends that people move out of the high tax States with cooked Pension books.     Who's going to be left to pay for Cuomo's plans?  Medicaid recipients, government workers?   So the advice for residents of  budget challenged States is dump their bonds and move out. 

      Did Andrew believe he'd escape the message of the  Handwriting on the Wall?

 

The party's over; the government fed pigs must removed from the trough; and the piper must be paid

Default Closing In On Andrew Cuomo As Bond Rates Rise And Bonds Are Dumped

Prodigal, adjective: recklessly wasteful. from Latin, prodigus ~ sqander

      Mario's prodigal son will soon be banging his silver spoon and demanding his credit card debt be paid and that he needs to borrow to get more spending cash.   Meanwhile, default, bankruptcy, budget gimmick failures, real World accounting, and the ridiculous 7.5% "safe return" on pension investments are all closing in on "The Son of Mario."

    Andrew Cuomo's budget is a farce.  NY General Obligation Bond latest sales (at 9AM, 2/4/11) were at 5.00% to Investors and instead of the lower 3.357% which gave Cuomo's budget $5.6 Billion in borrowing costs.  Cuomo's budget seriously underestimated borrowing costs by over $2 billion dollars.


In the news:

1. "Congressman Patrick McHenry, R-NC, has launched a broad investigation into the struggling market for debt issued by states."
2. "House Speaker Newt Gingrich and former Florida Gov. Jeb Bush ... promoting a plan to enable near-insolvent states such as California and Illinois to go bankrupt as well."
3. Cuomo's deceit that he'll collect taxes from Indian Reservations on cigarettes, ignores the obvious that if Indian cigarettes include the tax, the reservations would lose all most all sales and thus a $130 million dollar lie.
4. Cuomo is still puffing up as he readies to run for President in 2016.
5. Cuomo wastes money on attracting business while ignoring repaying the Unemployment Insurance: State Trust Fund Loans of a growing $3.1 billion.   Cuomo must pass this on in higher unemployment contributions by New York Employers and watch the Cuomo Business Friendly New York fizzle.
5a.  The Delusional Cuomo, like Stalin, Mao and Fidel, thinks he and his committees can evaluate, "based on your ideas and what you bring to the table."  Poor Andrew doesn't know Mao, Stalin, and Fidel's economic plans all failed even with their committees.
6. "[Investors] in November and December pulled a record $21 billion from funds that invest in municipal bonds — twice as much as they did at the depths of the 2008 credit crisis."

7. "Investors pulled money from U.S. municipal-bond mutual funds for the 12th consecutive week ... Muni-bond funds had net redemptions of $2.7 billion in the week ended Jan. 26, the Investment Company Institute said today ...   The withdrawals,.... total $33.5 billion over the 12-week stretch."

 
   What will happen is Cuomo will run out of cash.   He can try I.O.U's, like California, ($3 Cuomo's backed by the full faith and credit of NY and Cuomo).  And/or, just not pay some bills.  And/or moan and whine to the President and Congress.   And/or pray for a Bankruptcy Chapter 10 for States.

P.S. Proposed Chapter 10 Bankruptcy along with above post will be sent to Newt Ginrich, Jeb Bush, Ron Paul and Rand Paul and faxed to the Representatives below on McHenry's House Committee on Oversight and Government Reform
Patrick McHenry 202-225-0316; Frank C. Guinta 202-225-5822
Ann Marie Buerkle 202-225-4042;Justin A. Amash 202-225-5144
Patrick Meehan 202-226-0280; Joe Walsh 202-225-7830
Trey Gowdy 202-226-1177; Dennis Ross 202-226-0585
Mike Quigley 202-225-5603; Carolyn B. Maloney 202-225-4709
Peter Welch 202-225-6790; John Yarmuth 202-225-5776
Jackie Speier 202-226-4183; Jim Cooper 202-226-1035

Federal Bankruptcy Chapter 10 For State Bankruptcy Sent To House And Senate Leaders

The post is a repeat of "The Bankruptcy Cat Is Out Of The Bag And Some States' Bonds Will Tank" with proposed Federal Bankruptcy Law Chapter 10 which is now being faxed to the House and Senate Leadership and certain Committees' leaders.

Condensed excerpt:
To Members of Congress:
... Republicans aren't going to bailout States, but Cantor in the House says State bankruptcy will face an uphill battle and "analysts -- and states themselves -- are concerned that opening up a bankruptcy option would spook the buyers of state debt, driving up interest rates and making borrowing more expensive."

Except the cat is out of the bag, because of above linked article and Bob Brinker, Long-time Radio Financial Adviser has recommended, "The six that really jump out for me would be Arizona, California, Illinois, Louisiana, New York and New Jersey.... I would not purchase their municipal securities.....that's just my opinion."
Democrats in House and Senate must help States in trouble to force bondholders to share the burdens of fiscal excesses, since they too profited via said bonds in the excess debt. ...

Proposed Bankruptcy Chapter 10 and full text text at this link

Full text of The Bankruptcy Cat Is Out Of The Bag And Some States' Bonds Will Tank sent to:
Harry Reid, 202-224-7327;Mitch McConnell 202-224-2499
Jon Kyle 202-224-2207; John Boehner 202-225-0704
Eric Cantor 202-225-0011;Kevin McCarthy 202-225-2908
Nancy Pelosi 202-225-4188; Steny Hoyer 202-225-4300
Paul Ryan 202-225-3393 House Budget Committee
Chris Van Hollen 202-225-0375 House Budget Committee
Spencer Bachus 202-225-2082 House Financial Services
Barney Frank 202-225-0182 House Financial Services
Max Baucus 202-224-9412 Senate Finance Committee
Chuck Grassley 202-224-6020 Senate Finance Committee
Tim Johnson 202-228-5765 Senate Banking
Richard Shelby 202-224-3416 Senate Banking

A Bankruptcy Chill Hits Cuomo Adding To Albany's Below Zero Freeze With NY Medicaid Excesses Unaddressed And 12,000 Jobs Lost

You know you're directly over the enemy, when the flack gets heavy.

   Bankruptcy has sent a chill up the spine of the true believers and media hacks for Andrew Cuomo and other Governors facing fiscal disaster.   The Business Insider's hacks have reported, "The Cheerleading For State Bankruptcies And Municipal Defaults Is Downright Ghoulish," and Business Insider offers the following 12 reasons why State finances won't go broke: (Reasons blue, comments red)

1. Outstanding muni debt remains within historical parameters.  What was the historical parameters before the mortgage collapse, or NYC before fiscal collapse, or stock market historical values before a crash or major devaluation?

2. Interest payments absorb less than 5 percent of current expenditures.   Not after interest rates triple or more and more borrowing is needed for pension contributions.   See example of Greece or Ireland.  Link

 3. Municipal bond default is extremely rare -- less than one-third of 1 percent.  European Counties were defaulting rarely, but now cash infusions and/or  the EU insuring their bonds is not extremely rare.   Link

4. There wasn't a bubble in muni bonds, nor any exotic derivatives.   There is insurance (a derivative) on some bonds.   Will a massive default also result in an insurance default?  Isn't the actuarial basis of the insurance based on very limited expected default?  Yes.   And, lots of litigation claiming deliberate unnecessary default as a reason not to pay said insurance will result and/or bankruptcy filing by such insurers.

5. Pensions were fully funded until they had to weather back-to-back recessions.   A big lie, check out California or NY. Link CA-1/2 trillion dollars pension shortfall    NY Link     Central NY Muni.

6. Anyone claiming there are $3 trillion in unfunded pension liabilities is ignore investment earnings -- which are the majority of returns.   Hey, dopey, check out NY's Madoff style promise of 7.5% Safe Return.    Link.http://cuomotarp.blogspot.com/2010/11/from-ponzi-to-madoff-to-hevesi-to.html   or this link to California's 1/2 trillion dollar unfunded liabilities

7. Pension funds average over 8 percent returns through a diversified portfolio. Why would they invest only in fixed income?  Get real, see NY's return for past 5 years was 01.1%.   Link.

8.  Municipalities devote only 3.8 percent of their budget to pension funding: A modest increase could solve most problems.  Is that due to the phony assumption of a 7.5% Safe Return on pension investments or the borrowing by workers to fund their pensions, so they don't realize the true amount they are contributing to their pensions? Link.

9. Pension plans are legally protected. Health benefits generally are not. 

 

Bye, bye, granny, it's for the good of the State.

10. In fact, most states WILL have to scale back health benefits -- but won't default on pensions or bonds.  But NY and Cuomo, if judged by his record of failures to prosecute Medicaid frauds as AG,  will make sure the massive overspending by NY on Medicare remains. Link 1 Link 2 Link 3.

What about that  $28 billion overspending on NY medicaid?  Link.

11. Municipalities have the next 30 years to remedy any pension shortfalls.  No, the money is missing now and present contributions must be many multiples of prior budgeted amounts.   Link
See #5, 6, 7 and 8 above.

12. Mass default doesn't seem likely, but austerity does.   This opinion uses word "mass" so as to leave some smaller number of States such 6 out of 50 states.   Link to Finance Bazaar.

     Andrew Cuomo must be waiting for a bankruptcy bailout because he isn't  cutting Medicaid to California levels and saving at least $28 Billion a year?  Oh, I forgot Cuomo recovered 0.6% of Medicaid fraud.

     Although the latest fraud is, "New York's seemingly endless cavalcade of corruption continues, with the Young Adult Institute National Institute for People with Disabilities Network and five of its current and former officers ordered to pay $18 million in civil damages under the False Claims Act," as usual the defendants aren't going to jail.   "The defendants will pay $7.2 million to the United States and the rest to New York - though YAI does not admit that it did anything wrong."
   Is this to be Cuomo's new ethical standard: Cheat, steal and if you get caught, you'll have to pay some of it back. Will this be equally applied to the ordinary criminal, not in a suit and without a fancy campaign contributing  lawyer?

    .Cuomo to cut 12,000 jobs.  Link 1 Link 2   But why must New York fund this Medicaid corruption with $28 Billion dollars and then face bankruptcy and 12,000 lost jobs?

"Paying the Piper"

      Message to Andrew Cuomo, no more waiting to fix Medicaid:  The bond market is closing in.
1.  Municipal bond sell-off reported on Fox.
2.  What is Plan B with China dumping debt? 
3.  States' Pension disaster ahead.
4. DiNapoli's 7.5% safe return makes Pension disaster likely.
5. Structural debt will sink States after Federal debt collapse.
6. US credit collapse will trickle down to State's debt.
7.  Bankruptcy in future 

Andrew, has the recurring dream affected your health?

Did you believe you'd escape the message of the  Handwriting on the Wall?

 

The party's over, the pigs must sent home and the piper must be paid

California's Brown Plays His Cards While NY's Cuomo Stages More Theater

"a poor player, that struts and frets his hour upon the stage, And then is heard no more: it is a tale told by an idiot, full of sound and fury, signifying nothing." ~ Shakespeare

   Will Cuomo or Brown be first to bankruptcy?      "California faces a $28-billion budget shortfall equivalent to nearly a third of the general fund, which pays for most state programs, including schools, prisons, and health and social services."  The downhill race was stopped and a temporary table was placed between Brown and Cuomo and the game began.

And Brown placed eight of his cards on the table first.
1. Brown has already pledged to cut his own office budget by 25%.
2. Brown pledged not to raise taxes without voters' signoff.
3. Brown to take aim at several tax breaks and subsidies that have been fiercely guarded by the business lobby.
4. Brown will propose paring back the state's welfare program, reducing what doctors and healthcare providers are paid to care for the poor.
5. Brown is trimming funding for the University of California and California State University systems.
6. Brown warned school officials: "Fasten your seatbelt; it's going to be a rough ride.
7. Brown targeted a recent change to state business tax formulas that has saved corporate California roughly $1 billion.
8.  Brown wants to "Extend temporary taxes [to] erase up to $9.4 billion of that deficit."

   Meanwhile, Cuomo moves to more Albany Follies sideshow theatrics with, "New venue for Cuomo's State of State speech.",  where 2,500 seats are available to hear his oration.   Peter Abbate, a veteran Democratic assemblyman from Brooklyn said, "He can invite more of his friends and get a bigger applause. He'll stack the room."   "The new location gives Mr. Cuomo much greater control over the logistics and visuals—such as invitation lists, rehearsal access and camera locations—than he would have in the Assembly chamber."     Hopefully, he'll do better than his previous recorded message shown at a NY Albany Swampfest.

    The Albany children will recite a revised ditty to fit the revised Albany farce.

Oh, The grand Cuomo of New York,
He had ten 2.5 thousand committee men;
He marched them up to the top of the Capital hill Convention Center,
And he marched them down again.

And when they were up, they were up,
And when they were down, they were down,
And when they were only half-way up,
They were neither up nor down.

     Cuomo's only bluffed against Brown's cards #2 and #8 by promising not to raise taxes.  Cuomo has six other Brown cards to counter.   Raise your ante against Brown's, or fold up your Albany Sideshow and go bankrupt.

No Whining, No Federal Bailout; You Made Your Bed Of Debt, Lie In It, New York

From Arithmetic for the Economically Challenged Idiots 


For the USA:
1. Total public debt outstanding Dec. 20 $13,868,461,000,000
2. nation's population on April 1 was 308,745,538 
3. USA debt per person $44,805
     And just today, "The U.S. government fell deeper into the red in fiscal 2010 with net liabilities swelling more than $2 trillion as commitments on government debt and federal benefits rose, a U.S. Treasury report showed on Tuesday."

    The federal Government can't bailout New York; it's sinking itself.  You're on your own, New York. 


    New York State reports State-funded debt was $60.5 billion or $3,105 per person and in 2009, NY was the second most indebted State behind California.

    BUT, this debt doesn't include the Pension liabilities from the present phony estimated safe return on pension investments of  7.5%, when the New York fund earned annualized returns of 3.1 percent for the 10 years ended in March 2009, and 1.1 percent over five years and New York state’s $132.6 billion pension fund is the nation’s third-largest. 

   So we need to correct the pension liabilities optimistically with a 3.1% return, or a pessimistically with a 1.1% return.  Doing the arithmetic optimistically, we have 7.5/3.1 x $132.6 billion = $321 billion,  which should be in pension fund, when only $132.6 billion is, or NY has net debt burden owed the pension fund of optimistically $321 billion - $132.6 billion = $188.3 billion or another $9,664 additional debt per person, which should be added to $3,105 per person above.   Making $12,769 debt per person as a better debt estimate in New York.   But now look at the 4.52 million people on Medicaid in NY (don't pay taxes) out of a NY population of 19,541,453  which raises the debt per taxpaying person and each of their dependents to $16,600 each.

The party's over; the hand writing is on the wall and on the paper; the accounting's been done; the prophet heard; the piper must be paid.

The words, Mene, Mene, Tekel, u-Pharsin, written by a God of Justice Disrupt the Albany Victory Celebration (King Cuomo, Paterson, Silver and Sampson in their blue uniforms with their new committees behind them)

NY Bankruptcy, NY Bonds, NY Constitution, NY Pensions; The Resolution

Debt, n.  An ingenious substitute for the chain and whip of the slavedriver.  ~Ambrose Bierce

Neither a borrower, nor a lender be. ~Shakespeare

     We look to the NY Constitution to see why New York must chose bankruptcy if it's available under Federal Law.   Would the federal government refuse to loan or give NY Money, because "Federal loans to States would so increase federal debt so as to lower the federal bond ratings?"   Yes, because there'll be no love lost in the new Congress for bailing out New York's or other States' proliferate spending when the Congress has its own problems.  "The Treasury Department, in its regular budget monthly statement, said the government spent $150.4 billion more than it collected in the second month of fiscal 2011."  New York's deficit is pegged at $15.8 Billion , but if NY gets money, California, Illinois and Michigan will also want bailout money.
Simple question: Will Congress bailout States or create a new Bankruptcy Chapter?
 
        When New York State runs out of money, (technically bankrupt or bankrupt if the new Chapter 10 is adopted), the NY Constitution requires the Comptroller "shall set apart from the first revenues thereafter received ...a sum sufficient to pay such interest, installments of principal. ... at the suit of any holder of such bonds."   The applicable part of NY Constitution is copied below: (note word in red, "may" or it's up to the whim of a New York judge or a federal judge if the bondholder is not a resident of New York )


NY Constitution § 16. The legislature shall annually provide by appropriation for the payment of the interest upon and installments of principal of all debts or refunding debts .... If at any time the legislature shall fail to make any such appropriation, the comptroller shall set apart from the first revenues thereafter received, applicable to the general fund of the state, a sum sufficient to pay such interest, installments of principal, or contributions to such sinking fund, as the case may be,and shall so apply the moneys thus set apart. The comptroller may be required to set aside and apply such revenues as aforesaid, at the suit of any holder of such bonds.

    Supposedly NY Pension Benefits are protected in this article of NY Constitution § 7. ...membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired.

       No way out except for New York to limit its payments to NY bondholders in federal bankruptcy action.

An Albany Demi-God Follows The Washington Demi-God To The Republican Side

       "Saint Andrew Conquers New York"
    While one demi-god, promising much, tripped and fell from his dais in Washington, another new demi-god, Saint Andrew, prepares to ascend to Governor in New York.  Sadly, Saint Andrew learned there were no palms to be spread in his path in Albany in January, but his committees were ready.  Like the Washington demi-god's children's chorus' "YES WE CAN", Albany children were reciting new words to an old ditty:

Oh, The grand Cuomo of New York,
He had ten thousand committee men;
He marched them up to the top of the Capital hill,
And he marched them down again.

And when they were up, they were up,
And when they were down, they were down,
And when they were only half-way up,
They were neither up nor down.

And so, the Cuomo committee men ended up where they began.

   Andrew announced his new staff, who, hopefully (oops, wrong word), have learned from their past failures. 
     Steven Cohen will be secretary to the governor.  Mr. Cohen was the top aide in running AG Cuomo's CAP program which was a total failure, as well as the sham prosecutions of the NY Comptroller, Hevesi.
     Howard Glaser, who served with the younger Cuomo at the federal Department of Housing and Urban Affairs, was named director of state operations.    Mr. Glaser helped making sure $59 billion dollars disappeared at HUD without an investigation as was called for by the Inspector General.

Now we read, "Cuomo is one of us Republicans."    Next, Cuomo will ask the Vatican for his statue.

And, the Vatican Museum will change "Janus"to the victor's name "Saint Andrew conquers NY"


Lots of hype and media fawning, lots of committees, a staff headed by lackey failures, a demi-god who moves to the center. 
When we ever learn; when will we ever learn.

        Alas, another demi-god destined to trip and fall, right after the Chinese firecracker is ignited and the debt bomb explodes in the New Year.

The Albany Follies' Sideshow Continues Their Long Run With The New "Cuomo," $3 Script

Responsibility:  A detachable burden easily shifted to the shoulders of God, Fate, Fortune, Luck or one's neighbor.   ~Ambrose Bierce, The Devil's Dictionary


Highlights of the Albany Swamp's Finger Pointing Sideshow on Monday and Tuesday this week.  "Full of sound and fury and signifying nothing [done]"

1. Governor Paterson, playing  CYU or don't blame me next year when I'm gone, called the legislature into session on Monday to deal with a deficit in this year's budget which he estimates is $315 million.

2. Senator Sampson, playing CYU punts the budget cuts till January when the Republicans take over the NY Senate.

3. Comptroller, DiNapoli, claiming Paterson is underestimating the deficit for this year by a factor of three, or merely a billion dollars, while he forgets to include all the other factors such as his 7.5% Safe Return on pension investments.

4. Sheldon Silver dropping the ball in the Assembly hoping that after January, the Republican Senate can be blamed.

5.  Enter, Cuomo with his final soliloquy after meeting Assembly Democrats [saying],“For them to come back and do nothing is very distressing,” 

Show over; applaud please. Pretty please

6. With Public Finger Pointing sideshow ended, Cuomo and the other play actors from the sideshow's cast go back to Cuomo's committees, where, "Nearly half of the people on Cuomo's transition team and economic advisory council either are registered lobbyists themselves or work for organizations that lobby New York's state government and Assembly Speaker Sheldon Silver, Democratic Leader John Sampson, Republican Senate Leader Dean Skelos are all on Cuomo's committees.

Great show, Andrew, Silver and Sampson, too bad that:
  "Meetings are a symptom of bad organization. The fewer meetings the better" - Peter F. Drucker"

 

      Now with the sideshow ended, let's look to California for New York's next step in the new year.   "California is following the long tradition of bankrupt states turning to IOUs when the capital market looks less than inviting."

     Here's a sample of the proposed new $3 NY Script I.O.U. to be nicknamed "the Cuomo"  NY State can print plenty of these to give to you.

$3   NEW YORK TREASURY I.O.U.   $3

Tender for all non- public debts if someone will take it

New York Comptroller, Thomas DiNapoli   In Cuomo and in New York State we trust

Backed by the Full Faith And Credit of New York State

$3                Three Dollars                  $3

   Why was $3 picked as the value?   So that the "Cuomo" will trade above par with the dollar instead of below par like the historic trading value of City of Chicago I.O.U's at up to a 40% discount.

    The third world government of New York will offer an official exchange rate of one Cuomo = 3 U.S. Dollars.    Then, we can look to Illinois where, "Legislators left the capital this month without deciding how to pay 26 percent of the state budget.   And every major rating agency has downgraded the state."    See blog index above for details of NY budget debacle.

"When will the sheeple learn, when will they ever learn?"

Welcome to the Brave New New York World: 

 There's a great new local community business opportunity: a Exchange where Cuomos and dollars can be exchanged.

  If we can't borrow the money, Comptroller DiNapoli can use pension funds to buy NY debt.

  Thank God, we have Andrew's charisma to see us through.