by ilene - August 13th, 2010 10:11 pm
Florida – Much Worse Problems Than the Oil Spill
By Doug Hornig, Senior Editor, Casey Research
Media coverage of the oil spill’s effect on the Gulf focusing on tourist income lost by the waterfront towns – with footage of empty beaches, restaurants and T-shirt shops – dominates the news. Interviews with devastated business owners are heart rending. But they always end with references to somehow hanging on until “things get back to normal.”
Trouble is, things are not going to “normalize.” Not for the Panhandle of Florida, and probably not for the rest of the state, either.
Projections suggest that Florida can expect oil all along its west coast, and possibly throughout the Keys and up the east coast as well. Yet even before BP’s well began spewing crude, pressures within the state’s economy were building. It was an explosive situation awaiting a match.
Oily beaches and dying wildlife are likely that match.
Take unemployment. Statewide, it ballooned from 3% in 2006 to a peak of 12.3% in February 2010. Though it’s backed off, it remains in double-digit territory at 11.2%. ”Officially” – though official numbers understate the problem. Illegal immigrants, some 4.5% of Florida’s population, aren’t counted; the long-term unemployed and aging workers are regularly purged, even if they’re still looking for work.
This in a state already confronted with the worst of the coming healthcare/taxation crunch. It has the second oldest population in the nation, and as its citizens retire, their earnings fall off, causing tax revenues to drop. At the same time, healthcare bills rise, stressing social service budgets.
Florida is ground zero for Baby Boomer demographics. With 600 seniors for every 1,000 workers now, and the number trending inexorably higher, soon every employed person in the state will essentially have to adopt one senior to care for out of his or her paycheck.
Housing? Naturally, rising unemployment amplifies the difficulties of maintaining homeownership. With further negative effects from the oil, we can only expect the situation to worsen. A tsunami of defaults and foreclosures – and bank failures – would not be a surprise.
Florida is mortgaged to the hilt. It ranks second only to California in total securitized non-agency mortgage loans, 10% of the national total. Of those, half are 60 days or more…
Tags: Casey Research, Economy, Florida, gulf of mexico, Oil Spill, Politics, Public Pension Funds, service cuts, tax hikes
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by ilene - September 5th, 2009 2:59 pm
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Check out how your state’s budget is doing here.
Courtesy of Michael Panzner at Financial Armageddon
It’s not fun being a doomsayer. It really isn’t.
In spite of what some say, I’d much rather live in a world where the day-to-day struggles are easily manageable, the future looks exceptionally bright, and one can readily enjoy life’s simple pleasures — like the beautiful weather we are having in New York today — without having to worry about the system falling apart and crashing down on top of us.
But anyone who takes the time to carefully look around and analyze the situation can see that many of the excesses and imbalances that brought us to this point — and which inspired me to write my March 2007 book, Financial Armageddon — are still there.
While the government may have bought some time with its decision to abandon prudence and rationality and, instead, mortgage our children’s future to the hilt (mainly to help its powerful friends in the financial world), the problems have not gone away.
If anything, many of them have gotten a lot worse, suggesting the eventual fallout will be massive and far-reaching. Take, for example, the meltdown in municipal finances. According to a new report, "New Fiscal Year Brings No Relief From Unprecedented State Budget Problems," from the Center on Budget and Policy Priorities, a non-profit think tank, it seems that the worst is yet to come.
The unprecedented state fiscal problems brought on by the worst decline in tax receipts in decades show no signs of letting up. On July 1 — the start of the fiscal year in most states — an unusually high number of states were still struggling to adopt budgets for fiscal year 2010. Most states have adopted budgets that closed the shortfalls they faced with a combination of federal stimulus dollars, service reductions, revenue increases, and funds from reserves. But these budgets are already falling out of balance as the economy has caused state revenues to decline even more than projected. States will continue to struggle to find the revenue needed to support critical public services for a number of years.
The Center’s most recent survey of state
…
Tags: economic downturn, Michael Panzner, service cuts, state budget crises, state budgets, state spending, states’ fiscal problems, Unemployment Insurance
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.