— Bud Norman
Being the nocturnal cheapskates that we are, our infrequent television viewing is usually devoted to the free and over-the-air late-night fare offered by a local low-budget, ultra-high frequency station. Our fellow viewers are apparently a low-budget lot, as well, judging by the plethora of advertising for pawn shops, check-cashing services, contingency fee liability lawyers, and other businesses catering to the low end of the socio-economic scale. Many of the advertisements attempt to sell computers, televisions, and other consumer electronic devices in monthly installments, stressing that no credit check is required, while numerous other companies offer counsel to those already overburdened by debt.
We always envisioned a rather rag-tag crowd in the waiting rooms of those debt counseling companies, the sort of Dickensian rabble one might have found in a Victorian-era debtors’ prison, but our reading of the news suggests they might now be attracting a more respectable clientele.
The entire state of Illinois, for instance, recently had its credit rating lowered by Moody’s Investor Service. Illinois might not be the classiest place on the planet, as one would suspect from following the recent trial of Rod Blagojevich, the state’s third chief executive to go directly from the governor’s mansion to prison in the past 35 years, but still, there should be a few upright residents left there who are more fiscally responsible than their government.
While Moody’s rates Illinois as the worst credit risk among the 50 states, the experts at Standard & Poor’s disagree, rating California as even worse. Jerry Brown, who was known as “Governor Moonbeam” back when California was known as the “Golden State,” has responded to a $9.2 billion budget deficit by proposing a 7 percent increase in spending. He apparently intends to make up the difference by driving more high-earning taxpayers out of the state with an increase in the income tax rate, as well as further hobbling the state’s high-unemployment economy by increasing the sales tax.
At least neither state has yet declared bankruptcy, as the city of Harrisburg, Pennsylvania, has recently done. Although Harrisburg enjoys a steady revenue stream as the capital of the Keystone State, it has five times the debt due to a trash-to-energy incinerator that was supposed to turn a profit and save the planet. So far it hasn’t proved as profitable as hoped, but the planet does seem to have been saved.
The credit counseling services all claim to habla Español, but they might want to learn several more languages. Standard & Poor’s has warned 15 European countries, including powerhouses Germany and France, that they’re in danger of seeing their credit ratings downgraded. The nation of Hungary, which bequeathed the world Franz Liszt, Edward Teller, and the Gabor sisters, has already been lowered to junk bond status.
— Bud Norman