U.S. Economic/Financial News

State Budget Deficits in 2011 Will Soar to $180 Billion; in Reality Much Higher

July 4 (EIRNS)—The combined budget deficits of the nation's 50 states will soar to $180 billion this fiscal year (2011), reported the Washington, D.C.-based Center on Budget and Policy Priorities (CBPP), not the $90 billion wishfully reported recently by the National Conference of State Legislatures. The CBPP says that $34 billion of the $180 in deficits would be "covered" by left-over Obama "stimulus money."

But all of this is wild-eyed speculation based on linear projections; as the full force of the collapse hits, the deficits could reach half a trillion dollars, and more.

Here is a sampling of the explosions:

* In Chicago, advocates for mental-health care protested against Illinois Gov. Pat Quinn's reduction or elimination of mental-health and developmental disability programs not tied to Medicaid. The protesters said that as many as 60,000 people will lose mental-health treatment because of the cuts.

* In Missouri, state budget officials said that revenues for the fiscal year 2010 budget fell by $700 million, or 9.1%, from the year before, led by a collapse in the state income tax, due to widespread unemployment. Gov. Jay Nixon, raised the level of cuts for the new 2011 fiscal budget to $950 million, and the number of layoffs of state workers to 1,250. This will hit transportation, as the state Department of Transportation will only have $500 million available to spend for construction, less than half the level of the year before.

* In Philadelphia, on July 1, hundreds of protesters formed a ring around City Hall, to protest the budget passed by the Pennsylvania legislature and signed by Gov. Edward Rendell. While the legislators and governor use smoke and mirrors to claim "only" $120 million in cuts, the reality is different: The budget would sharply reduce the Department of Agriculture by 11.7%; the Department of Labor and Industry by 10%; and the Center for Literacy, and various welfare and education programs.

Education Slammed: 200,000 Teachers May Be Laid Off

July 4 (EIRNS)—Nationwide, between 100,000 and 200,000 teachers may be laid off due to the budget crisis, during fiscal year 2011, according to the National Education Association (NEA). But that could be just the start: As 2011 fiscal year begins, the U.S. is confronted with the dissolution of its entire educational system. The typical response of budget cuts and stealing funds from other programs will not work; removing Obama from office, and implementing Glass-Steagall, will work.

The following represent the tip of the iceberg:

* The California Teachers Association reports that 20,000 teachers may be laid off this year, on top of the 15,000 already fired; that would add up to nearly 10% of California's teachers. Statewide, of 1,077 school districts, 14 are classified as in especially dire condition, and, according to the June 30 Los Angeles Times "are unlikely to avoid bankruptcy." Moreover, an additional 160 district school systems are reported as "at risk," having a "qualified outlook," which means that they may go bankrupt within the next three years. But with the increasing pace of the financial collapse, that could happen within weeks or months. Thus, 16% of California school districts could face insolvency in the near term.

* In North Carolina, the General Assembly has already pencilled in an additional $305 million cut for local school districts for the 2010-11 academic year. This cut will translate into more than 6,000 education jobs lost this coming year.

* In Indiana, Gov. Mitch Daniels is cutting $300 million from the current school year budget, which will translate into 5,000 teacher layoffs.

* In Illinois, the layoff of teachers and school personnel could top 20,0000.

* In New Jersey, 93% of the state's school boards are considering, or proposing layoffs, which would mean a minimum of 5,000 teacher layoffs.

* In South Carolina, the school superintendent says he expects nearly 4,000 education workers to lose their jobs, including 2,500 teachers.

* In Michigan, on April 20, 2,000 Detroit school teachers received layoff notices, with more expected. In Ypsilanti, 19 teachers were laid off; in East Jackson, 15 teachers; in Gibraltar up to 50 teachers will be laid off.

Obama Is Killing Off U.S. Manufacturing

July 4 (EIRNS)—President Obama has eliminated nearly 1 million manufacturing jobs since taking office. In June 2010, as the "not in the labor force" category grew by a whopping 842,000 American workers, another related reality emerged from the depths of the Bureau of Labor Statistics' June "employment/unemployment" report: Obama's progress in wiping out America's manufacturing base and workforce.

When Nerobama took office in January 2009, the United States had 12.54 million manufacturing workers. His policies have reduced that to 11.67 million, a fall of 870,000, or 7%. Lyndon LaRouche has repeatedly stressed that the issue is not "job creation" per se, but the creation of productive, blue-collar jobs, which technologically transform the economy, led by manufacturing and infrastructure, a process that Obama has contributed to killing.

Since Obama took office, the layoff of the manufacturing workforce has been greatest in America's industrial states: California has wiped out 120,000 manufacturing worker jobs, 9% of its manufacturing workforce; in Ohio 46,000 manufacturing jobs have been cut, or 7%; in Pennsylvania, 51,000 have been cut, or 8%; in Illinois, 59,000 have been eliminated, or 10%; in Michigan, 28,000 have been eliminated, or 6%; and in New York, 43,000 have been cut, or 8%.