Monday, March 09, 2009

Where We Stand Today Monday, March 09, 2009

Local – where all politics begin: For most Americans and certainly most Bostonians our current economic troubles are hearsay and rumors whose only outward manifestation is fear. Most people have good stable jobs. The unemployed are a small percentage of the population and most of them are collecting something from the government. No one is starving.

The realities and dimensions of this little problem are just about to hit home. The Governor has been forced to cut his budget by over a Billion dollars while the "recovery act" so widely touted in Washington and opposed by EVERY Republican in the House of Representatives is only going to bring in a couple of hundred Million dollars. The difference is about to become evident. All over the Commonwealth Mayors, City Councils and Selectmen are struggling with the same question: Who is essential to keep the government running, to everyone else … You’re Fired! Between now and June expect the unemployment rate in Massachusetts to skyrocket.

Desperate times are ahead. Boston’s Mayor Minino has asked the unions not to take their raises scheduled to go into effect in June. He admits that won’t solve the problem. He may ask for rolling furloughs, no overtime or even temporary pay reductions. Boston may be able to keep most police and firefighters employed but the slack will be taken up by other departments. It’s clear that the net income of the Commonwealth is going to go down leaving more and more homeowners underwater. At what point do people start walking away from homes they can no longer afford?

Debt is the killer here. Without access to relatively easy credit no one from the Commonwealth to the average Joe can get anything done. This is not an issue of using a debit card instead of a credit card it’s the larger issue of how do you buy a car where there is no public transportation or how to you buy or sell a house if there is no credit available? How do you rebuild roads if you can’t issue bonds? Access to credit is essential but with declining asset values and incomes the majority of us are burdened with massive amounts of unserviceable debt. Something has to give before this is over.

Next time: exploring our National Problem.

1 comment:

Anonymous said...

Gotta give you credit Steve!