Skip to comments.The Soprano State Gets Downgraded (Fitch Downgrades NJ even after Gov. Christie's reforms)
Posted on 08/24/2011 6:33:05 AM PDT by SeekAndFind
It sounds like a storyline out of some mob movie. Executives at a big employer with ties to powerful unions use the firm's pension funds for financial gimmicks, channeling money meant for the fund into other activities and then lying to investors about the health of the enterprise.
But it's not an episode of The Sopranos. It's merely a description of the financial gimmicks used by politicians in New Jersey over the last decade, the only state ever cited for fraud in its financial disclosure statements by the Securities and Exchange Commission.
Maybe it was all the attention fixed on the volatile market last week, or on Gov. Rick Perry's entrance into the presidential primaries. But neither the financial nor the political world paid much heed last week when Fitch Ratings downgraded New Jersey's debt. Although Fitch noted in its analysis that the state has made progress under Gov. Chris Christie toward achieving a more stable budget, the downgrade was a reminder of something that the governor himself has said when questioned about running for president, namely that fixing the once-prosperous New Jersey is not a simple task of balancing a budget or two. Governments that dig themselves the kind of holes that successive New Jersey governments have dug using an array of fiscal gimmicks can't simply pass a few nominal reforms and then declare victory.
Pension liabilities played a prominent role in the downgrade because New Jersey has essentially used its employee retirement system as a way to run deficits, even though its constitution requires balancing the state's books. What New Jersey has done is a more extreme version of the game other states and municipalities play, too. They simply don't consider their annual required pension contributions to be a part of the budget and therefore not really required,'
(Excerpt) Read more at realclearmarkets.com ...
‘... the only state ever cited for fraud in its financial disclosure statements by the Securities and Exchange Commission.’
Thats quite the stmt!
It’s going to take more than a couple of budgets to turn things around, as anyone with any sense can recognize. That’s why I hope Christie is not the VP pick. He should stay here and continue to work on NJ.
the democrats and RINOs and their union handlers who engaged in these shenanigans will use this to run against Chris Christie for governor
Ultimately, it’s up to the people of NJ to figure it out. Of course, we’ve got these big urban areas mucking things up—rat holes.
There should be some jail time involved here...or a firing squad.
This needs to be emphasized. Because his opponents will ignore it.
The Fitch report is documentation that Christie has indeed inherited a bad economy, and that his changes are moving NJ in the right direction.
If he moves them in the right direction as stated the people of NJ will support his hard line tactics. If they want to commit suicide they can fight against him....
Last time that I tried, you didn’t have to excerpt Real Clear Markets, just Real Clear Politics.
The union leadership knew the model was unsustainable, but just figured they would riot when the government tried to stiff them.
I wonder, on which side of the rioting will our unionized law enforcement officers stand?
Actually, I don't wonder. But at least the National Guard isn't a union shop.
People in private industry go to jail for what politicians in New Jersey did with state pension funds.