Posts Tagged ‘US Economic Outlook and Monetary Policy Hearing’
To Big to Fail Get $4 More Trillion With Trillions Already and More at the Ready For the Bankers and Wall Street
While State and Local Municipalities will have “Bail Out” account “Zeroed Out” in 2011.
Bernanke Says Local Municipal Bond Markets? “Bottom line…seem to be doing okay” a.k.a. Still Inflatable with Real Assets Still Attached That Multi-National Investors are Still Buying and Know they can Collect on Under State Taxation Enforcement and Seize Under International Issuance Forfeiture Laws, Just Like the IMF and World Bank have done around the world. New Foreign Ownership of Local Water, Food, Energy, Mining by Private Multi-Nationals instead of the Local Re-Public Domain.
Jan 7, 2011 01:20:18 –
Capitol Hill – “US Economic Outlook and Monetary Policy Hearing”
Sen Joe Manchin VW : What I’d like to know is your opinion on Future Pension Liabilities of the both corporate and state government, the recent reports of the financial crisis that many of our states are facing in the very near term future. Have you all looked carefully at the possibility of a default on general obligations and municipal bonds by state and local government and the budget strains that could present to the US economy?
We’re concerned that Stimulus runs out June of this year. What happens if there is no more stimulus to come and there is no more ‘bailout’, if you will, and they can’t meet these long term obligations have you all looked at that or you spending any time on it?
Ben Bernanke: To some extent senator yes. Um no question state and local governments are under pressure, uum, they have been cutting spending and employment over the last couple years. Um…the…ahh Federal Assistance…uhh…will continue in twenty eleven but after twenty eleven it’s gonna be pretty much going to be zeroed out. I think.
And So One the one hand the States are sees some improvement in tax revenues as there has been some growth um on the other hand they are going to be losing some of the.. their federal assistance, so the pressures on the state budget and local municipal budgets are going to continue for a while and that is going to be a head wind for the economy as well as for the individual… individual states.
Um it’s also true, this is more the long run issue, that like the federal government the state and local governments have some long term fiscal issues relating primarily both to pensions of state employees but also to health care promises which in most cases are almost entirely unfunded. So, those are long term obligations that could be as much as… collectively as much as two trillion dollars for all the sates together, in the long. Those are long run obligations that don’t come in…the near term…so these are some very serious long term pressures.
Now In terms of the municipal bond market it..its currently seems to be functioning reasonably well. Liquidity is…fine, Issuance has actually been very high, including issuance for capital projects. So we are not seeing extraordinary stress in the municipal markets. Which suggest Investors still are reasonably confident that there won’t be default among major borrows.
And the reason they might believe that is that most states have rules which put debt repayment and issuance repayments at a very high priority a…above many other obligations of the state and locality. Bottom line the municipal markets and the bond markets seem to be doing okay.
Understand who owns Your power company, your water companies and claim to the land.
This is a bubble that we can’t afford to sell oversea and we can’t afford to inflate and pop.