The John Batchelor Show

VIDEO: State Finances

June 15, 2016

Tuesday  14 June 2016   / Hour 1, Block C: Veronique de Rugy, Mercatus (George Mason University), in re: Fiscal solvency of the states within the US.  The worst US states for economic condition?   Illinois, New Jersey, Massachusetts, Connecticut; New York, Maine California and PR.  A bill opening union contracts, which constitute a major part of PR’s problems. To work, need a really strong control board. Also, special interests have got huge benefits for many years; need to tie their hands so actual member get the benefit/ If you can’t do these things, then I'd be against bankruptcy. The real level of unfunded liabilities: PR is completely in the red— dramatic – but Connecticut isn't far behind.  Said that 49% of pensions and benefits are unfunded. What kind of discount?  Oops – higher than 49%;  in CT, using 7 or 8% — that’s crazy. They overspend, overtax, overpromise public employees and use acctg gimmicks to show an incorrectly small unfunded liability CT is ‘way over 49%   . . .  Cook Co jails: they hold people in detention for two or tree years for minor crimes; here’s no control even though they often walk away after court. Returns to the unhealthy marriage of the govt and special interests. We need to clear up debt to GDP: mostly reforming transfers and the pay of public employees. Also: 80% of fiscal adjustments fail because they continue catering to special interests.   Scott Walker: teacher’s unions and __.  His labor plan was very important. 
Florida has a healthy fiscal condition (is now No.6). It dropped because Nebraska has been going up.  FL rates very high on cash solvency: have a lot of cash on hand to cover short-term liabilities. Also rank high in how taxes and spending are in connection with  . . .   No. 11 is Ohio, a big, populous statw that’s doing well in comparative fiscal solvency.  However, it uses a lot of fiscal gimmicks.