Tuesday, July 29, 2008

New York State Tanks

In a message carried across the state Governor Patterson has stated that in 90 days New York's budget Deficit has risen by over a billion dollars. He has called for the state Representatives to return to Albany on August 29th to begin to work on the crisis. The trouble is that these politicians couldn't agree to get into a bunker in case of a nuclear attack. So far every budget has been agreed upon in backroom deals that cover up who is getting what. One thing New Yorkers can be sure of is that someones palm is getting greased. The trouble for the state has just begun. Even a person who has a cursory knowledge of the states income sources knows that as the stock market continues to lose ground and banks write off billions in losses New York's revenue stream will dry up even more. The party is over and the state has just woken up with a hangover, but this hangover is guaranteed to last years. New York's habit has always been to throw money at it's problems rather than fix them. Those days are over. Not only has throwing money at the problem been unsuccessful, but it has resulted in soaring budgets. With the state carved up into political territories and budgets being based on who wields the power, New york seems to be unwilling or unable to address the root of it's problems, which is that every program is a sacred cow to someone. My advice to anyone thinking of investing in New York is to run very fast, because it is almost a sure bet that the states bond rating will tank too.
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