It's Time for Connecticut's Bailout

By BRIAN P. BECK

Updated 2:15 PM EST, Mon, Jun 29, 2009

Print Email Share TWITTER FACEBOOK

Getty Images

Over the last nine months the government has pledged over $1 trillion to bailout financial institutions, banks, insurance companies, car companies, and just about any major corporation not named Lehman Brothers. In exchange in most cases, the government has taken an ownership interest in the company.

With the start of the new fiscal year just around the corner, states around the country, including Connecticut, are hoping for some government bailout money themselves.

Here in Connecticut, the recession has been mild compared to Florida, Nevada, California and Arizona. However, the state has kept pace with these bigger states as far as facing huge budget deficits.

According to the Center on Budget and Policy Priorities, the deficit of Connecticut’s general fund is 11.3 percent right now and is projected to double in 2010 to 23.7 percent. Currently Arizona has the largest deficit at 15.9 percent, but that is nothing compared to California’s projected deficit of 33.5 percent in 2010.

Brian Beck is a partner at Wealth Management Group of North America.

The average deficit for general funds across the nation is 9.2 percent currently and is projected to be 18.9 percent in 2010.

Budget games will have to be replaced with not only fiscal discipline, but unfortunately, job cuts too if Connecticut is going to balance its budgets. And this doesn’t bode well for the President as he is trying to stem the tide on unemployment.

Unlike the government’s creative way of “lending” money to large corporations in exchange for stock ownership, most states don’t and can’t offer anything in return to the government, except a promise not fire workers and try to do a better job managing their finances.

Legislators are praying for a miracle come 2010 as states scramble to fix their 2009 shortfall and come up with unique solutions to plug the holes.

Hey, maybe if things continue to get worse the government will just give us all our money back in 2011.

Mr. Beck is a partner at Wealth Management Group of North America, LLC, a state Registered Investment Advisory firm – Farmington, CT and is registered with National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Adviser. He is not employed by NBC Universal or WVIT. For more information please visit his website by clicking here.