The Fiscal Calamity in America

America is facing economic challenges at all levels and this is especially true for the states. Right now various states are in fiscal emergency that will have a great effect on the national economy. The Washington D.C. based Pew Research Center published a report last month reporting that many states are mired in catastrophic budgetary calamities that if not addressed will have them tittering on the brink.

Right now the nation’s focus is on the national economy but everyone had better start looking at economic viability of state financing and how its impact on economic growth. Just look at California as a case in point, a state that is the eight largest economy in the world is in all sense of the word an economic basket case.

California is facing close to twenty five billion dollar budget deficit mainly because of its own shortsightedness. Too often the state played partisan politics by locking themselves in to long term spending utilizing questionable economic data that didn’t reflect the reality of current economic data. California uses “Enron” style budgeting when crafting annual budgets and each year the situation gets worse.

The state of California is mired in its worst economic recession since the great Depression, but what does California do, it makes it harder for businesses in the state to operate. Labor and environmental groups have a strangle hold on state governmental politics that with each legislative session enact legislation that cripples businesses in the state from expanding economic growth.

California is mired as one of the worst state in that nation to operate a business and it only gets worse with each passing year. If the nation is to recover from the recession then the states have to begin to address the fiscal stability of their respective state. America cannot move forward with these states being a drag on the national economy, we may have a recovery for a short time, but long term growth will suffer as a result.

Bloated irresponsible government policy led to the disaster that we are in and only true political leadership will bring us to fiscal solvency!