States in dire straits

Illinois is a mess:

The governor and lawmakers went home for the Independence Day holiday, vowing to return for a special session set to begin July 14. But they've earned no time off, least of all for good behavior.

The state has a $9 billion deficit to fill — including huge debts carried over from the preceding budget year. Many state functions will continue, at least for the time being. But just before the holiday break, the governor vetoed a bill that would have continued funding state social services, albeit at dramatically lower levels.

California is handing out IOU's instead of checks. Kevin Hassett has written an excellent article on how the insolvency of this once great state may ensure the defeat of ObamaCare:

It takes years and years to make a mess as terrible as the California debacle, but the recipe is simple. All that you need is two political parties that are always willing to offer easy government solutions for every need of the voters, but never willing to make the tough decisions necessary to finance the government largess that results. Voters will occasionally change their allegiance from one party to the other, but the bacchanal will continue regardless of the names on the office doors.

California has engaged in an orgy of spending, but, compared with our federal government, its legislators should feel chaste. The California deficit this year is now north of $26 billion. The U.S. federal deficit will be, according to the latest numbers, almost 70 times larger.

The federal picture is so bleak because the Obama administration is the most fiscally irresponsible in the history of the U.S. I would imagine that he would be the intergalactic champion as well, if we could gather the data on deficits on other worlds. Obama has taken George W. Bush’s inattention to deficits and elevated it to an art form. [emphasis added]

Read the rest. Obama spends like a drunken sailor on steroids in every area except one -- defense. (Come to think of it, there's a good chance we'd be better off with that drunken sailor than with the Obama administration.)

The New York state legislature is beyond dysfunctional:

For almost a month, ever since Republicans briefly won two Democrats to their side and tried to seize control, the state Senate in New York has been paralyzed, split 31 to 31, as a stack of legislation -- legalizing same-sex marriage, extending the mayor's control of New York City schools, renewing the authority local governments need to conduct business -- sits in limbo.

During that time lawmakers have convened dueling sessions -- each claiming legitimacy -- huffed over which party should lead members in the Pledge of Allegiance and fought about whether a Republican lawmaker crossing the chamber to fetch a drink should have counted toward a quorum, allowing Democrats to pass more than 100 "noncontroversial" bills, which the state Assembly refuses to recognize. . . .

Unlike California, New York passed a budget by the start of its fiscal year, April 1. Still, the stalemate has not been without consequence. As of Wednesday, many cities lost authority to conduct routine operations, including issuing bonds, mailing tax notices and collecting certain operational fees.

As for the Big Apple, Steven Malanga advises Mayor Bloomberg on how to save his city. The mayor's approach, to slow the budget's rate of increase instead of actually cutting it, is not likely to meet with success. (See City Journal for more articles about NYC and New York this week.)

Many other states are in trouble. From the Seattle Times, 7/2/09:

Ten states had not approved budgets for the fiscal year that begins July 1. Here are the states and the gaps they must plug to balance their budgets.

Arizona: $3.2 billion.

California: $24.3 billion

Connecticut: $8.8 billion

Delaware: $800 million

Illinois: $11.6 billion

Indiana: no budget gap; House and Senate are split on the budget amount

Mississippi: $400 million

North Carolina: $4 billion

Ohio: $3.2 billion

Pennsylvania: $3.2 billion

Toss in Colorado:

“There is simply not enough money to pay for the government we have created,” the report says. “Barring a quick and dramatic turnaround of the economy, it appears that the current fiscal system cannot be sustained.”

Even Joe Biden isn't expecting a "quick and dramatic turnaround" at this point.

Smart people can speculate on what might happen if three or four (or more) big states go under. Pundit said something about a domino effect. That doesn't sound good.

Comments welcome.

Linked by Michelle Malkin (buzzworthy)

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