Unknown terrain for economy (State of Massachusetts denied credit)

[depakid]

Source: Boston Globe

In an example of how fragile credit markets have become, the state of Massachusetts yesterday tried to borrow $400 million to make its routine quarterly local aid payments to cities and towns. State treasury officials said the credit markets abruptly froze midday, leaving them $170 million short. The state will have to use its own funds to complete the local aid payments, draining the state's balance to extremely low levels.

"I don't think any treasurer alive could say they've ever seen anything like this," said Timothy P. Cahill, the state's treasurer. "There have always been cash shortages, but you could always go to the market and get more. This is the first time we haven't been able to do that."

Cahill said he believes the credit market will in effect remain shuttered today as the nation's largest lenders hold on to their cash amid uncertainty over plans for a federal bailout. In short, the House's rejection of a $700 billion Wall Street bailout plan takes Massachusetts and the rest of the US economy into territory that few policy makers and analysts wanted to explore.

It tests the forecasts of Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson that failure to approve the plan will dry up credit markets, damage the financial system, and send the fragile US economy spiraling into a deep recession. The economy may yet muddle through, analysts said, but the risks of a catastrophic downturn have risen.

Read more: http://www.boston.com/business/articles/2008/09/30/unknown_terrain_for_economy/

[madville]

1. Why is a state spending money it doesn't have ?

They should be cutting back their budget, if they don't have the money now they won't have it a year from nowm I would bet everything I have on that. On any state for that matter, they will all have shortfalls.

[Mojorabbit]

2. I am sure they are getting revenues

in on an ongoing basis. It is good to have a cushion esp if the state needs to help people heat their homes this winter. I don't know anything about the state but it makes sense to me.

[depakid]

4. It's called cash flow

and you'd lose your bet.

[Ex Lurker]

11. it's astounding how economically illiterate people are

and it's a big reason why we're in the pickle we're in.

[sandnsea]

12. But but, DU is smarter than everybody else

No low-information voters here.

:sarcasm:

[Nihil]

23. Yeah, it's more honest too ...

... no money-gouging gamblers looking after their own interests
around here, no sirree!

;-)

You can trust a DUer if he says that he's supporting a bailout
because it's the best for the country (rather than just being
the best for his own investments) can't you?

Can't you? Anyone?

[Two Americas]

61. self-delete

No big deal, my post was just inaccurate as it turns out.

Carry on.

[Marrah_G]

67. I don't care if you trust my reasons or not.

If you think I actually have the money for investments, I have a bridge to sell you too.

[skyounkin]

14. Don't you dare get mad at us

we are NOT the ones who got us in this mess- Wall Street is at fault!! Don't think for a second you can push this crap on us.

We are in a pickle because of deregulation and no goddamn oversight.

[Ex Lurker]

15. I'm not mad at anybody. But it is what it is n/t

[shrike]

32. You're right, and this is very bad news

Having covered municipal government for years, I can't imagine what would happen if this became widespread. There would be payless paydays, no street-sweeping, no garbage pickup, no nothing.

And welcome to DU, if you haven't been welcomed already.

[grytpype]

5. It's a very short term loan.

Companies borrow money for short terms all the time, it helps manage their cashflow.

The short term loan market is the one that is freezing up now.

[Marrah_G]

65. These are revolving lines of credit- short term monies

Because a state doesn't have a salary to count on every week. Money doesn't come in on a schedule. These lines of credit help pay salaries when the funds aren't immediately available.

These are not long term high interest loans like personal loans. They are very different.

Every state does this. Every large company does this.

[Mind_your_head]

3. Massachusetts will surely "be there" next month and "next year"

...and the good people who live there will still be there and "make it so".

[SahaleArm]

6. Increase yields and I'm sure they'll find buyers n/t

[skyounkin]

7. So, it begins

this is a test of the publics will.

We need to stand together, and reject any bill without oversight, and protections for home owners.

[skyounkin]

8. I read the article but didn't understand something

who were the state of MA trying to borrow from? The Gov't?

[truthisfreedom]

21. No, commercial lenders that are freezing lending on a day-to-day basis.

Scared lenders who can't afford to be on the bad side of a deal. They need guaranteed profit. They're in a pickle.

[bhikkhu]

9. Welcome to the real world...

where you don't always get to spend money you don't have.

Perhaps it is because I am over 40, but I fail to see the great disaster in people, businesses, governments, etc, not being able to "get credit" - also known as "going farther into debt".

[Ex Lurker]

10. get back to me when your paycheck bounces because your employer

can't arrange short term financing.

[Two Americas]

36. amazing

Borrow money to meet payroll? Generations of sober successful businesspeople are rolling in their graves.

There was a time when businesses did not need to do that. They didn't start doing it because they needed to, but rather to play with money in the newly deregulated Reaganomics environment. The result of that has been lost jobs, declining wages, collapsing industries and a ravaged and impoverished country.

There are many younger people who do not have direct experience of what things were like before Reaganomics, and they assume that this insane free market world is reality, the way things have always been and must always be.

The people defending this bailout are defending Reaganomics, seek to prop it back up, deny its failure, keep the shell game going, "save" us by destroying us.

They won't say that; they hope that people don't see that or don't know about it.

[bhikkhu]

50. I do the accounting for the business, and it won't happen

first because the owner wouldn't borrow to make payroll as a matter of principle. Second because he hasn't that kind of relationship with any bank, and third because if he had to do that the business would be bankrupt for all practical purposes, and I'd be looking for another job.

[endthewar]

13. Allow me to explain

Many businesses use lines of credit and don't just have bundles of cash sitting in the bank. For example, they may need to pay their employees on the last day of every month, but they may not get their revenue on that exact day every month. So if for some reason they will be getting their revenue 5 days after payday, then they need a very short-term loan in order to pay their employees on time. As another example, take a state sales tax. They will get a ton of revenue during the holiday shopping season from Thanksgiving Day until around Christmas. However, some programs might need some cash before then if they are paid for by a state sales tax. So they might need a short-term loan to pay for programs that are year-round but only depend on seasonal types of revenue.

[Seldona]

24. Many businesses don't borrow to make payroll.

May I suggest you try to find a more stable line of work not run by a bunch of crooks using other people's money?

[endthewar]

25. Agreed. Most businesses won't go out of business.

But you do realize that a mere 3 percent increase in unemployment is serious, right? Have you even been paying attention to this mortgage crisis? Only a small percentage of homes have foreclosed, yet it's causing worldwide economic pain. Even the state of Massachusetts was denied a line of credit this week. But I'll cede the ground to your expert economic opinions. :eyes:

[tama]

38. Only three?

I remember A depression when my country went from full employment to 20% unemployment.

[endthewar]

51. It'll likely be more than 3%

I was only trying to make the point that even a small percentage increase in unemployment can be very bad news economically. :hi:

[Virginia Dare]

27. So I guess you pay cash for everything you own?...n/t

[Two Americas]

34. that's funny

You haven't paid for anything until you have paid cash.

What you are saying is the problem - people using credit think they are buying something.

Debt is slavery. Our grandparents knew that.

Government intervention in the past was for the purpose of freeing people from the tyranny of debt, the clutches of the lenders, not to free the lenders from the consequences of their own rampant greed at the expense of the already over-burden debtors.

[WriteDown]

35. So if your water heater goes out, or your furnace, or your A/C....

Then you should save up until you can actually buy them outright? May make for a deadly winter or summer.

[Two Americas]

37. my, my

Fear, fear, fear.

What you are saying is that the financial industry is extorting us, has enslaved us. Sign here or die. Give us more or die.

I agree.

[tama]

39. Friends

and good neighbours are only capital of any real value.

[Zhade]

55. If wages were indexed to inflation, like they used to be, that wouldn't be an issue.

NT!

[Two Americas]

60. bingo

Why does everyone have to borrow? Wages are suppressed and the value of the dollar has collapsed, that's why. How can we pay tomorrow what we can't pay today, with the dollar declining and wages falling? We can't. Oh, invest in the market and real estate, they told us. Right. That worked out just great. Now what?

[WriteDown]

63. When was this mystical time that you speak of when....

savings were abundant? My father bought his first house in the 1960's on Long Island. It required a down payment of 25K with an interest rate that was close to triple what you can get these days. Took both my parents working including my mother working double shifts as a nurse just to maintain the house. Especially with old unreliable oil burning furnace that we had.

[Two Americas]

70. whatever

My grandfather withdrew savings and brought a shoe box full of cash to the closing. Most working people in Detroit were still renting and many were still using public transportation, as the mad suburban sprawl mania was just starting. The lure of the suburbs and home ownership was not for people to play the real estate market, it was to house people and to give them more security.

From the mid 20's right into the 70's I had 7 aunts, 6 uncles, and about 20 cousins who spent their entire lives renting and using public transportation. My family was not unusual. Their lives, in my opinion, were richer and they were more free than most suburbanites are today. It was the New Deal and the Labor unions that gave them that peace, that freedom and security, not any damned line of credit or free market.

Getting people into automobiles and into the suburbs and into debt required Firestone, GM and Standard Oil forming a dummy company and buying up and gaining control over mass transit around the country and intentionally destroying it, as well as many other corrupt and coercive things that big players did to beak up communities, destroy the unions, and turn people - formerly known as "citizens" - into consumers; isolated, vulnerable consuming units and commodities on the "labor market" all competing frantically with each other to "get ahead." everyone has to pretend that it isn't all driven by fear and greed, of course, or the people would rebel against it and overthrow it.

Most people were motivated by a desire for peace and security, not greed and fear - they wanted freedom FROM greed and fear - but through a clever bait and switch they were forced into doing the opposite of what they hoped to do. That silly film about Roger Rabbit does a better job of explaining what happened then the nonsense we hear from the experts today, all of who worship at the altar of the God of the free market.

People were forced to buy into the real estate game, forced into debt, and forced into reliance on automobiles. Of course it was all marketed as a great benefit to and freedom for the people. But as these changes happened during the fifties many people made these decisions - said they were making these decisions - because their preferred choices were being eliminated and not because they bought into or trusted the happy suburban illusion, going into debt, or the "freedom" of the automobile. Easy credit, suburbanization, debt slavery, environmental destruction, and the collapse of public transportation, and now just about the entire public infrastructure, are in my opinion all interconnected and different expressions of the same tyranny of the market - that is to say, the tyranny of the wealthy and powerful few and the fear and greed driven society we are all now forced ot live in and call "reality."

In any case, so what? At issue is whether or not we should all be debt slaves, and whether the financial industry should support the working people and the productive industries or the other way around. Is the ultimate goal to house people, or is that secondary to the market?

"Mythical" time, I think you meant to say.

[Karenina]

69. Barney Frank didn't toe the line

a few phone calls later...

[muriel_volestrangler]

30. But in this case, the state did have some money available

"The state will have to use its own funds to complete the local aid payments, draining the state's balance to extremely low levels."

So it would seem they tried to borrow $170 million more than they needed to. It seems the state wanted to borrow to keep its cash balance above $170 million.

[endthewar]

31. I guess they do that in case of emergencies

or costs which are variable, e.g. snow services. Those roads better be clear this winter. Overall, doesn't sound good for MA.

[AntiFascist]

47. These are usually called "cash flow problems"....

I suspect that banks are being very selective about who they loan money to for a reason. Usually companies can't meet payroll when they have trouble collecting money from their own customers, or worse yet, when their customers go away. This can cause a domino effect, and there are underlying causes in the economy for this. Whether or not banks can provide short-term loans is really only a short-term solution to a much bigger problem.

I've always suspected that Republican (leadership) is doing everything it can to delay the downfall of the economy until such time that Obama takes office, then they may decide to drop the anchor. If McCain takes office he might bomb Iran, then they could blame any market correction on the new war.

[Two Americas]

16. I witnessed the change over

I was a manager in a corporation in the 80's when this changed, at least in that industry, although I heard it from colleagues in many other industries as well. People started using a new system of moving money around trying to make money off the money. So rather than paying bills and payroll from cash flow, as had been done in the industry I was in all along, now we were borrowing and investing, borrowing and investing. Money would be moved at the last second into the account that payroll came from. Other money would be moved over here, over there, always trying to maximize the return - not on the activities of the business but on the cash the business took in. At the time many of us warned about this, that it would become a monster that would eventually destroy businesses and bring down the economy.

There is no reason on earth why it has to be done this way. No reason why the survival of small businesses and meeting payroll should depend upon borrowing money. Borrowing money to meet payroll? I am old enough to remember when that was seen as ludicrous and dangerous.

And then we have people's retirements and life saving invested in the market. What sense does that make? From the first time thirty years ago a salesman tried to peddle this idea to me, I was suspicious. The people defending the bailout and the market today are making the same arguments I heard from that salesman, and they are just as fishy today as they were then.

Why is the whole world now held hostage? Because those salesman were too good, and convinced too many people to get into the market in too many ways. They said it would work. It didn't, it never could have. They lied. They were lying then, and they are lying now. It was a hustle and a shell game when it started, and it still is.

Now, what about businesses that do need credit? Farming is the best example, fro obvious reasons - low profit margins, unpredictable and seasonal production, heavy costs on materials, labor and fixed plant. We long since made the public commitment to government regulation and management of credit to keep farms going. That has been wildly successful, and there is absolutely no reason why the government can not be the lender and employer of last resort today. We freed farming from the tyranny of the financial industry, from the predations of the speculators.

Credit crisis? Yes, because confidence has broken down. Why? because trust is gone. And why is that? Because after almost 30 years of unprecedented cheating and stealing, people have good reason not to trust the people who have been playing with the money. They lied to us. Were that not true, we would not be in this crisis. This crisis is what they promised us could not happen when they started taking our money.

So people no longer trust the financial industry, and they are right not to, and the solution is to place more trust in the same people who have broken the trust?

Sure, if we shore them up and we all PRETEND they are trustworthy and honest, we can keep the game going a little longer as all of us sink into - not the Great Depression they are trying to scare us with - but a permanent depression for us and for future generations. Giving them this bailout is pretending they are honest and trustworthy to "restore confidence." That is not confidence, it is a confidence game - otherwise known as a con.

The "experts" and fear mongers will now debunk what I say here, no doubt.

[DeSwiss]

17. I agree totally.

As a small business person myself these past 20+ years, and one who has never borrowed in order to meet payroll, I couldn't agree more. Now I have forgone my own pay in the early days of my business, in order to make sure that my employees got paid. You have to make such sacrifices early-on quite often. As long as it doesn't become a habit.

What you're describing in the former business model, is the signature model for a business -- one which can continue to operate from the generation of its own income stream(s). Which is why it is often hard for businesses to get started and remain afloat. But that's how the system is supposed to work. In my experience, businesses that are created so easily can't help be fail in the end. Becuase they are built with no foundationn, nor have they ever learned the lessons of self-sufficiency. In my view, if the prospectus for a new business indicates that borrowing on a regular basis is required to sustain cash flows, then that isn't a business in my book. Particularly when its failure could result from activities totally unrelated to the businesses operation and/or market.

But the banking industry under the current model, has now become a key component for the success of a business from an operational perspective. Now its one thing to obtain a capital investment loan in order to add to one's own resources to purchase equipment, etc. to get a business off the ground. Or, for an existing business to upgrade equipment in order to maintain their competitive edge. But not this. This model depends upon the health of not only your business, but the bank's as well. Over which one exercises no control for their business decisions.

I think that you've hit the proverbial nail upon its head.....

[depakid]

18. Nobody is pretending that they're honest or trustworthy

That's why the bill includes an oversight board appointed by Congress; a GAO presence at Treasury to oversee the program and conduct audits to ensure strong internal controls; an independent Inspector General to monitor the Treasury Secretary's decisions; transparency -- requiring posting of transactions online -- to help jumpstart private sector demand; and meaningful judicial review of the Treasury Secretary's actions.

Not sure how much more Congress could do to express their lack of trust in these folks.

[Two Americas]

19. ROFL

You must know these things to not be true. A fig leaf here, a fig leaf there, but the fundamental problems are not addressed. Why? Because people want to keep the toxic game going, and they are bamboozling us about that to force it on us.

I don't care. My voice probably doesn't matter. Many knowledgeable voices are being ignored. But damn can we once and for all call a scam a scam? Why not just be honest about this?

It is not safe or sustainable to continue to run the economy as it has been run the last 30 years, on easy credit that leads to inflated prices in an overheated greed-driven frenzy. That is the problem. I don't care how many "good" things are added to this bill. No matter how much food you add to a plate of shit, you still wouldn't want to eat it.

I agree by the way that the market has a stranglehold on our economy. Yep. We are all held hostage to it. That was always the danger when deregulation happened. It is inevitable. The solution is to free the hostages, not appease or enable the abductors.

Remember all of the sales pitches over the last 30 years? I do. No one selling "financial products" or whatever the hell they are called would be honest with small investors and home buyers, or even entertain anyone telling them that the crisis we are facing now was the certain and inevitable result of what they were doing. Couldn't happen. Nope. Trust us. Don't worry. You could make a looooooot of money hint hint. Be smart. Get in the game. Remember?

[depakid]

20. Not saying there weren't tons of scams or that I don't have disdain for those who caused the mess

and Obama has said that we'll be going after many of them- and I believe him, just as I believe that an Obama administration will enact regulations and get legislation passed that will deal with many of the underlying problems. But that's many months away- and we have State governments being denied credit NOW.

An there's every indication that unless something is done to get banks back into the business of lending to one another- as well as to government entities and businesses at reasonable rates- there won't be much to celebrate in 2009.

I'v had my misgivings about Obama in the past- but in standing up and outlining the situation and what he plans to do, I've never been more formly behind him on this. He's right, as is Krugman.

[Two Americas]

22. I understand

I am not discounting the immediate emergency.

I don't care much about going after anyone. That would no doubt be a matter of token sacrificial lambs being persecuted, with the attendant media circus.

The business model in this country dramatically changed in the 80's. Those innovations have failed, and just about wrecked the country in the process.

Do we end that experimentation, abandon that model, and return to the system of regulated banking and finance as it was pre-Reagan, or do we not?

If you say that we should end that Reaganomics program, then I agree. If you want to keep that system, I disagree. That is a separate issue from how the immediate crisis is handled, and also a separate issue from who is or who is not the bad guy in the current mess. Recovering from the last thirty years and rebuilding the country are yet another issue.

[bean fidhleir]

26. "Not sure how much more Congress could do"? You must be joking.

They could re-criminalize money trading, for one thing.

[Two Americas]

33. you misunderstood

What the pro-bailout people mean to say is "there is nothing else we could do given that Reaganomics must be kept alive and this must take precedence over everything else no matter the cost."

[bean fidhleir]

42. I know - I smacked myself upside the head right afterward

How could I not have realized that Whatever Is, Is Right.

[Two Americas]

52. the spin

It is all spin, and a hustle. Push people on it, question the absurd arguments and nonsensical "logic," and they run for cover.

The right wingers want to eliminate the mark for market thing. Why? Because "forcing" banks to declare the value of their assets makes them look bad. OK. But they ARE bad. well, if we keep that from people, then they will think they are good, have confidence, buy them, and then they will be good!!

Reagonomics voodoo idiotic failed crap. That is what that is, that is all that it is, and that is all it will ever be.

Then we are supposedly buying "assets" at "market value." What is "market value?" When they were selling us this Ponzi scheme over the last 30 years they said "market value is what people are willing to pay for something. Free markets!! The market rules!!" But now it is no longer that. Now we get the exact opposite argument. It is "whatever we say they should 'really' be worth." And what are they "really" worth, or what makes them....er....worth more than they are worth. Well, that is easy, they say. They are lower in value merely because people think they are lower in value. If people started thinking they were worth more, they would be. If we declare them to be worth more, then they will be.

WTF?

Now I hear that it isn't a bailout. Oh, no. We are all going to make money on these assets! It is an investment. In other words, we are being forced to make an investment that the investors themselves will not make.

Then they say, the government can carry these investments longer. Once we get that market rolling again, then they will go up up up.

How come the taxpayers can wait, but the wealthy investors cannot? How come investing in the market is supposedly a good deal for us, but investing directly in the people would somehow be bad?

Again, WTF?

[Zhade]

57. Your insight on this, while probably futile, is extremely appreciated.

I'm not good with economics - you help break it down to common sense.

[tama]

40. Well said n/t

[Two Americas]

44. it took me a while to see this

The pro-bailout people are using highly deceptive emotional arguments.

They want us to think for example that it is inevitable, let alone advisable or desirable, that businesses must borrow money to meet payroll, or that people can not survive without credit cards, or that debt enslavement is a benefit to the average person.

They are arguing for more of the same poison that has been killing us.

I really think that people are talking, and thinking and acting like addicts. They are addicted to credit, with the financial institutions as the pushers. People are gambling addicts. They want one more fix, one more stake, one more trip to the casino.

The only thing that is saved by giving the gamblers yet another loan is the illusion that we can win by gambling. Everything else will be lost. That is the nature of the beast. Our grandparents knew that. We may have to learn the hard way.

[tama]

45. How deep does

the debt addiction go? Lending and spending the lives of future generation, the well-being of ecosystem... the birth of civilization began by cutting the forests, farming the land until it became too poor and then going for a rampage of conquering to find other ecosystems to suck dry. This is our debt.

[Two Americas]

59. it is way out of control

I think we have to face it.

[Marrah_G]

68. TA- I think you couldn't be more wrong on this

We are seeing this whole issue from very different aspects.

HOWEVER- I do not appreciate the insinuation that those of us who are arguing FOR the bailout are propagandists.

I wouldn't label you and as a fellow Dem I would expect the same in return.

[Two Americas]

71. I didn't say that

I didn't label people. I said the arguments were emotional and deceptive, and in alignment with the libertarian and right wing points of view. If we cannot describe people's arguments, it will be impossible to discuss anything.

You, on the other hand have labeled me, have unfairly accused me of something. Accusing people of being the accuser is just a clever way to smear them - by saying that they are the ones who are smearing people. You just did label me - as the kind of person who unfairly labels other fellow Democrats - and here that is seen as a bigger crime than almost anything else. One can express any sort of right wing point of view, and level any sort of personal attack against leftists, but one cannot say that a point of view someone else is saying is a conservative point of view.

Why is it that people expressing a point of view that is even the slightest bit leftist can be freely labeled as being purist, conspiracy kook, fringe, nut case, socialist, revolutionary, radical, far left, disloyal and everything else under the sun, but should any of us say that an argument someone is using, something they said, is reactionary or in opposition to the traditional principles and ideals of the Democratic party, that is immediately seen as some horrible bigotry or unfair labeling or broad brush generalization or as a personal attack?

The same thing happens with racism. We live in a racist society, and we are all liable to express a point of view that supports racism one way or another. But we can never talk about that, about the things we all think and say, because everyone will immediately get busy denying that they "are" a racist and claiming that the person who pointed out the racist idea is "accusing" them of "being" a racist, and oh the horror of that hideous offense. Racism itself is less important to people than their self image as "not a racist." The same thing happens with politics and economics. The fact that people are oppressed and exploited is secondary to everyone needing to have a self image that they are a good guy, and how dare you accuse them of saying or doing things that support and defend the upper class?

There is a double standard about all of this. We are bombarded continually by propaganda defending and promoting the interests of the wealthy and powerful few. Can it be a coincidence that a much higher burden is placed on advocates for the working class than there is on those who speak - whatever their reasons or motives may or may not be - on behalf of the more fortunate and more powerful? There is a distinct bias in favor of the upper class, and that permeates all of the discussions. That should not surprise us, since those with power and wealth have disproportionate access to and control over the media and the national political discussion.

Even if we are going to pretend that we have a level playing field, still, I think it should be obvious to any sober and honest observer that there is a strong upper class bias and a double standard at work here.

[bitchkitty]

54. I believe you. n/t

[Zhade]

56. HEAR, HEAR. Worthy of its own thread.

Every time I hear someone supporting the bailout, I think, these people are doing exactly what they did when they fell for the WMD lies - believing PROVEN LIARS!

[Two Americas]

72. I appreciate that Zhade

Thanks for your posts and support. A little goes a long way.

:hug:

It is incredibly difficult to get an alternative narrative in front of people, let alone quietly and intelligently discuss it.

[Bill McBlueState]

28. And to think we've got a ballot issue that will abolish the income tax if passed

If they're already having trouble making payments to cities and towns, imagine how much worse it would be without an income tax.

[customerserviceguy]

29. That's gotta have lenders worried

crazy stuff like that would drop a state's credit rating for sure.

[bean fidhleir]

41. Imagine abolishing the FEDERAL income tax instead.

Abolishing state income tax is just another Federalist move to consolidate power in the hands of the monied elite.

But imagine if we abolished the federal income tax instead, letting each state tax its citizens at a common, agreed level, with the federal government being allowed to tap the states for just enough to cover the common functions provided across state boundaries.

[tama]

46. Sounds like a plan

I don't see states willing to fund the military-industrial complex and the continuous wars that it needs.

[bean fidhleir]

48. "I don't see states willing to fund the military-industrial complex"

Great minds think alike, so they say :evilgrin:

[tama]

49. Hmm

Now that I think closer, the suggestion sounds very much like US becoming similar to EU. It's not a fool proof plan, there has been strong militarization tendency in EU lately, though nowhere near to US, of course.

[KakistocracyHater]

43. This is part of my view

..."The plan is very simple, but not obvious on first blush. Make sure that all the money is gone from the U.S. treasury, make sure the deficits are so great that all social and educational programs are cut, increase the military and security budgets to "protect our nation" with all these monies going to corporations and security firms who are extra-national (not tied to any country, but actually more than multi-national in that they are outside the purview of any nation at any single moment) and stave in the social security fund by allowing it to go to private corporations for "investment"-and you have the perfect scenario for saying, "only the private sector can save us-we're broke and they have the money to run every program, fund every program, but of course, at huge costs and profits for the private corporations." Our only resource will be the corporate lenders, especially the large extra-national corporations who will have loyalty to no one except their corporate coffers and large share owners throughout the world."

"I want to make this article short so that you have time to think about this and alert your congressperson and senator as to what's really going on. Bush has already started pushing for privatization in Iraq and Afghanistan and in America-it's only a short step from this huge debt he has created from the great surplus he inherited. *God only knows what kind of deficit he's going to create as he lets the dollar drop freely, so that consumers have to pay more for goods and our balance of trade goes to hell, the national debt at its current rate will take over 100 years to pay off-if we can even then get a hold on it according to some economists who are upset (see articles by Paul Krugman and others)sat the Bush team's actions. But they fail to see the real motive behind all this seeming disaster. Yes, it's a disaster for us, but it's a windfall for Bush and his corporate friends who will soon be running everything. *Actually, through their lobbying, they are running most things at this point-simply see the astounding inflation in drug prices compared to the low national inflation rate, the false "shortage of natural gas"-a commodity that is endless in the world and in its supply in America-the artificial shortage of electricity (as done by Enron and others to jack up prices and now FERC saying that though California did sign contracts with utilities under duress, they are still bound by the contracts even though they were lied to when signing the contracts-which is fraud in any honest person's mind, but not in the mind of FERC) and now our need for added security that is endless because it will not be long before Bush brings terrorists to our shores by either his behavior, or allows some actors within the Republican camp to fake terrorist raids so that possibly martial law will follow."

from:http://www.informationclearinghouse.info/article3977.htm

[Zhade]

53. So let me get this straight - banks refused to give credit...

...because they weren't certain they were going to get our money, which they claim they need in order to give credit.

That's called EXTORTION.

[bean fidhleir]

66. It's even worse: Mass is still one of the wealthiest states in the nation

as can be seen by house prices here. There is zero chance that any tide-over money wouldn't be paid back.

Springfield has been under state fiscal control for the last few years because previous administrations were, basically, crooked as hell. So it was major belt-tightening time. Springfield, third largest city, after Boston and Worcester, is not a wealthy town. Lots of history (first commercial automobile, home of basketball, home of Dr. Seuss, etc), very little wealth.

But I heard from a highly reliable source that they found more than $350K "laying around" in the budget that they can now use for some needed-by-law upgrades to a couple of the libraries. And there actually might be still more money lying around in out-of-the-way budget corners.

So the refusal is nothing but either a hold-up or theater, depending on whether the government is in on it.

[eridani]

58. Could this be a strictly political ploy, like the crap the Cleveland banks pulled in 1979?

Privatize public power, or we don't roll over your loans. Any evidence that this MA situation sin't equally political?

[bean fidhleir]

64. Bet on it. And there's no Dennis around to call their bluff.

It's massive BS.

[Name removed]

62. Deleted message

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[TroubleMan]

73. The financial blackmail from the banks begins.

They want to make it hard for everybody unless they get exactly what they want.