Members of the US Union face major shortfalls

Austerity or government spending? As C, I, (X-I) "net exports" or combined net decline within the three of GDP = C + I + G + (X-I), once again falters, austerity will be long forgotten. G or government spending in the form of stimulus of all kinds will be used to absorb the decline national income. Austerity is hardly a new concept. Herbert Hoover, a firm believer in balanced budgets, did little to encourage massive stimulus and currency devaluation from 1929 to 1932. His austerity efforts did little to revive the economy or secure a second term (with emphasis on the latter point).

State Foresees Massive Financial Troubles

The nonpartisan Legislative Fiscal Bureau reported today that a potential $2.5 billion structural deficit could be in place by the time next legislature convenes in January.

In a memo to members of the legislature, LFB Director Bob Lang wrote that “for 2011-12 the general fund would need to generate $1,232 million in order to meet current commitments, maintain the required statutory balance, and balance the budget for that year. In 2012-13, $1,279 million ($47 million over the $1,232 million in 2011-12) would need to be realized.”

N.J. Budget Cuts: Template or Trouble for the U.S.?

A possible preview of how the nation will deal with its financial future finished playing out in Trenton, N.J., this week, and the audience of Garden State voters isn’t exactly giving the show buffo reviews.

Their reaction to the steps to deal with New Jersey’s dire financial situation is somewhat sobering for those who think the country is ready to make sacrifices to achieve financial stability.