Ya know it's really hard to pay for 25 dollar an hour government employees by taxing 8 dollar an hour McDonalds workers.
I saw a piece yesterday that said that over half of the 50k jobs created last month were McDonald's jobs. No shit.
Meredith Whitney is now saying that states are in far worse shape than they are letting on...states are raiding retirement accounts and kicking the can down the road just like the Feds. http://finance.fortune.cnn.com/2011/06/06/meredith-whitney-state-finances-are-worse-than-estimated/
State governments have generally been more responsible than the Federal Government- mostly because they can't sell treasuries and counterfeit worthless dollars. California issues IOU's. Illinois is absolute fucking toast. NJ and California are right behind them. So what is state arbitrage?
That occurs when businesses and wealthy residents of any given state see their tax rates go up- they simply move to a more tax friendly state. People are fleeing Illinois and California. This of course exacerbates the problem. That's why dramatic cuts ala austerity are very real and coming like a freight train.
The FEDS and state governments simply haven't figured out that we are in a depression. That it is not going to go away on it's own. It HAS to get worse. They are going to have to start CANNING people EN MASSE. Sticking your head under the covers and pretending this shit doesn't exist will not make it better although in America- that is our usual course of action.
You know what I call the glass half full crowd here? Idiots.