1. States

Two states confronting real austerity this AM are California and Illinois. California’s new / old Governor Brown will chop education significantly amongst several other areas. Illinois will vote on a huge income tax increase of 66% to 75% without much if any public discourse. It is being called a “midnight” tax hike. These efforts, which you can read in much more detail in the press are, of course, necessary. These states are broke and they cannot print money to save themselves. These programs are unlikely to be effective in rectifying multi-billion dollar budget shortfalls. Yet California, yesterday, ratified its own version of a very costly cap and trade legislation. This is certain, at least in the early days to cost the State significantly and increase the deficit pressures.

Written by Michael A. Berry, Ph.D. - [ Discovery Investing Web Site ]