Louisiana now facing a fiscal train wreck

The latest U.S. Census figures indicate that despite all the grandiose talk by Bobby Jindal as to how well the economy in Louisiana compares to that of other states, it’s simply a lie.

The unasked and unanswered question is whether the state’s current economy can maintain the level of business activity plus the cost of state and local government services.

One doesn’t have to be a trained economist to know the answer.  It is Economics 101. We have more demand for services than the economy can generate to pay for them.

LA is no longer merely facing a $1.6 Billion “fiscal cliff,” we are facing a “fiscal train wreck” of historic proportions.  That “cliff” is just the first step.  After going over the cliff, the stop at the bottom is the killer.

How did it happen?

The reason for the impending train wreck can be traced back to a single decision by Jindal.   This summer he convinced (not much effort considering the leges collective I.Q.) the leges into spending $2.8 billion of non-recurring (one-time) revenues in the current operating budget.

Before becoming governor, at every opportunity, he railed against the use of one-time revenues to fund on-going expenses.

Such a concept does not require the level of someone of Jindal’s alleged intellect.  It’s common sense.

When Jindal decided to use the one-time revenues, no thought, or much of a plan, was given to how those government functions would be funded beyond June 30, 2011.   He signed the state’s fiscal death warrant.

Only a handful of leges along with State Treasurer John Kennedy opposed the use of one-time money.

The “fiscal cliff” is now becoming a train wreck of epic proportions.

Sacrifice not forthcoming

The problem can no longer be solved by the state elected officials and public employees.  They either don’t have the knowledge, the tools or the desire to do what needs to be done.

Structural changes needed to lessen (can’t avoid the train wreck) the impact of this fiscal catastrophe would require these public servants to sacrifice themselves.

The public servants will rationalize that they cannot let down those who they service. It sounds good, but man’s highest motivator is saving one’s self (own job).

Sacrifice by public servants simply isn’t going to happen.

Solutions to the fiscal catastrophe are beyond merely cutting some state employees and selling off unneeded physical assets.   Decisions have to be made to simply eliminate state and local programs, cold turkey.    No phase out elimination.

My prediction is that there will be a “fiscal train wreck” (Beyond the level of the mere $1.6 billion “cliff”) within one year.

Following the wreck, the focus of the government “fiscal first responders” will be to first triage the public sector in order to save as much of it as can be saved. The public servants lives and livelihoods depend on it.

Survival of fittest

The private sector will be left to fend for its own.

For those of us in the private sector it will be a manner of survival of the fittest.   Those who are ambitious and those with the necessary wherewithal will simply leave the state.

It’s not a long journey to Texas or Georgia which for whatever reasons offer an opportunity for hard-working individuals and businesses to survive.

Buck stops here

The single individual for creating the catastrophic fiscal situation in Louisiana is Bobby Jindal.

To date, nobody has confronted Jindal with the tough questions and forced him to answer them. It is not too late to ask Bobby Jindal the tough questions.

Prediction

We will soon learn that while the fiscal train slowed slightly while Bobby fed the train’s engine with the cargo onboard, Bobby quietly jumped off the train in Washington D.C.

I welcome all comments on how Bobby specifically plans to address the train wreck.

Unless it is a proposal for a balanced operating budget using only recurring revenue, the train wreck will happen.

The secret that nobody wants to discuss or admit is that Jindal and his minions simply don’t have the ability to craft such a budget that will save the private sector.

Unless you still believe in the tooth fairy, you should consider reserving a U-Haul trailer.

 

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