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Financial news I consider important, with my opinion, which is worth as much as you paid for it.
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Friday, February 12, 2010

NJ may be turning a corner, Gov Christie

* Christie plans to cut NJ Transit subsidy
* Christie to freeze $1.6 billion in NJ spending

Speech from Gov Christie, see bold for highlights.

Twenty three days ago, I was honored to take the oath of office as your governor and promised you and the people of New Jersey a new direction. The old ways of doing business have not served the people well, I said, and I asked for your help in bringing about change.

Today, I have called you together because it is time to take the first major – and urgent -- step in delivering the change we promised, in the critically important area of the state budget.

New Jersey is in a state of financial crisis. Our state’s budget has been left in a shambles and requires immediate action to achieve balance. For the current fiscal year 2010, which has only four and one-half months left to go, the budget we have inherited has a two billion dollar gap. The budget passed less than eight months ago, in June of last year, contained all of the same worn out tricks of the trade that have become common place in Trenton, that have driven our citizens to anger and frustration and our wonderful state to the edge of bankruptcy.

What do I mean exactly? This year’s budget projected 5.1 % growth in sales tax revenue and flat growth in corporate business tax revenues. In June of 2009, was there anyone in New Jersey, other than in the department of treasury, who actually believed any revenues would grow in 2009-2010? With spiraling unemployment heading over 10%, with a financial system in crisis and with consumers petrified to spend, only Trenton treasury officials could certify that kind of growth. In fact, sales tax revenue is not up 5%, it is down 5.5 %; and corporate business tax revenue is not flat, it is down 8%. Any wonder why we are in such big trouble? Any question why the people don’t trust their government anymore and demanded change in November? Today, we must make a pact with each other to end this reckless conduct with the people’s government. Today, we come to terms with the fact that we cannot spend money on everything we want. Today, the days of Alice in Wonderland budgeting in Trenton end.

Click here to read full speech.

For me, it is refreshing for a politician to paint an accurate picture and call the outright make-believe of budgets into reality. Time will tell if Mr. Christie is really going to lead the change. I for one will vote for him even if he only gets 1/2 of the cuts he tries for. That is more than any other politician I read about trying to get fiscally responsible.

And to all you Keynsian economists that say cutting spending will throw NJ into a greater recession, I say, your nutz. What will make a HEALTHIER environment is end the fiction, get back to reality and start rebuilding the fantasy is better than trying to extend the fantasy. You have only to look at any person or corporation, is it better a person who is broke borrows more to keep the party going? Or get responsible?

Short term its always better to be reckless, the right thing is always harder, but longer term always better.

Thanks to Happy John for a RARE piece of good news in the sea of irresponsible politicians and regulators.

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