Gov. Paterson grimly declared yesterday that New York faces a historically unprecedented four-year, $47 billion budget deficit, $20 billion higher than projected just three months ago - and will need some form of federal bailout..."In order to address these issues, as New York is really the epicenter of the national crisis of finance, we're going to need federal assistance," said Paterson , as he presented a six-month report on the state's current budget....PATERSON PLEA TO FEDS: RE$CUE US!, Fredric U Dicker, NY Post, 10/29/2008
It had to happen. When you throw $700 billion at losers on Wall Street, you can expect the same kind of beggary from state governments, especially one that gets a third of its tax revenues from the financial services industry, now in its worst mess since the 1930s. With a $122 billion dollar budget in New York State, with no effort to cut spending by an Assembly as profligate as California's, does the accidental governor really expect the Feds to say, 'sure, where do we send the check?' Sadly, unlike the last New York State disaster in the 1970s, the answer is likely to be 'yes, only too happy to comply.' President Bush and the current Congress bear little similarity to former President Ford and the Congress he had to work with. This is what it means when analysts talk about moral risk. When you cave in to one group of con artists and send them money as a reward for their screwing up, every con artist in the country is going to get on the receiving line. The net result will be sharp devaluation of the dollar, and inflation. Back to the Seventies!
The NY Post's editors have a different reaction, worth looking at in part.
[Paterson] is also going to tell lawmakers that the state's economy "is a vital engine" that drives that national economy...Alas, Washington's own cupboard is bare...The good news is that New York's budget is so bloated that finding fat to cut shouldn't really be all that hard...Take school spending. State Comptroller Tom DiNapoli just uncovered more than $400 million that districts squirreled away in various retirement reserve funds...The money apparently isn't needed to pay those costs - and much of it can't even be used for that purpose...It seems these school districts had so much money - from sky-high property taxes and ever-soaring state aid - they didn't know what to do with it all...Overall, state aid to schools is slated to soar 12.3 percent next year. Medicaid, meanwhile, is set to rise 19.6 percent.
Earth to Albany: Think again. A $47 Billion Gap, Editorial, The New York Post, 10/29/2008
Second the motion....