It’s Nine Credit Downgrades

According to nj.com:

Moody’s Investors Service has downgraded New Jersey’s debt rating, dealing the Garden State its record ninth ratings cut since Gov. Chris Christie took office.

The ratings drop by one notch, from A1 to A2, on $32.2 billion worth of bonds underscores the state’s “weak financial position and large structural imbalance, primarily related to continued pension contribution shortfalls,” Moody’s said in a statement Thursday.

The rating agency warned that future pension underfunding and ongoing structural deficits could drive further downgrades.

“We expect liquidity and structural balance to remain very weak through fiscal 2016,” the agency said.

Chris Christie is now on a ‘Tell It Like It Is’ tour trying to talk the country into adopting his policies to fix Social Security, Medicare, and Medicaid.

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Christie’s Downgrades:

2/9/11 S&P Downgrade: AA- from AA

4/27/11 Moody’s Downgrade: AA3 from AA2

8/18/11 Fitch Downgrade: AA- from AA

4/9/14 S&P Downgrade: A+ from AA-

5/1/14 Fitch Downgrade: A+ from AA-

5/14/14 Moodys Downgrade: A1 from AA3

9/5/14 Fitch Downgrade: A from A+

9/10/14: S&P Downgrade: A+ to A

4/16/15: Moodys Downgrade: A2 from A1

15 responses to this post.

  1. Look at the bright side. By underfunding (while increasing) pensions and disinvesting in the infrastructure, New Jersey got a state and local tax burden that was at or below the U.S. average as a percentage of its residents income for most of the 1980s and 1990s. Despite an extensive transit system, better than average schools, etc. etc.

    https://larrylittlefield.wordpress.com/2015/04/14/taxes-2012-census-of-governments-finance-data/

    What a great deal those wonderful Generation Greed politicians provided to those who were cashing in and moving out, without worrying about leaving the state in ruins. I’ll bet there are people in Florida and the Carolinas, who were smart enough to sell their houses and get out before the consequences came due, who are still grateful.

    The sellout of New Jersey’s future by Generation Greed is the U.S. in miniature. But I think that when I finish my analysis and calculate a sold out future ratio NYC will have you beat, again.

    Reply

    • Not if you give any weight to the hypocrisy factor. Is DeBlasio running around the country lecturing on how to fix Social Security?

      Reply

      • No, he’s running around the country saying we need to tax the rich.

        http://gothamist.com/2015/04/16/polarizing_park_slope_dad_lectures.php

        The problem in NYC of course, is that if you look at our tax burden compared with other places we have already taxed the rich (and the poor and those in between, except for retired public employees whose income is exempt from state and local income taxes). And we’re still broke aside from the peak years of stock market bubbles.

        No doubt having your Governor run for President is a disaster for New Jersey. One reason we’re so bad off is the pandering deals cut by Senator Giuliani, President Pataki, Governor McCall, and President Bloomberg (not to mention President Lindsay and President Rockefeller). The only good news is that Christie can’t sell out the future of NJ to look good in the short run, because it has already been sold.

        Reply

    • Posted by Tough Love on April 17, 2015 at 10:40 am

      Since when is appropriate taxation a function of the resident’s income ? Are Alpine, Saddle River, and Short Hills resident paying way to little ?

      Taxation should be to pay for essential services set at the level they would cost if NOT polluted by the moneyed and political interests if our self-interested Elected Officials bought-off by the Public Sector Unions.

      NJ’s citizens haven’t underpaid in taxes for the services rendered, and many believe that we have overpaid. At least in NJ, the citizens, by materially UNDERFUNDING the grossly excessive pension/benefit promises, they SO FAR eave escaped actually PAYING for those unjust promises. ….. promises for which hopefully & justifialy the unjust 50+% share of which will be erased.

      Reply

      • Posted by Tough Love on April 17, 2015 at 10:48 am

        FYI …… I was talking about taxation for local services, not State & Federal “income” taxes, for which tax “rates” should (in my opinion) rise as income levels increase.

        Reply

        • Read my post. It is the total state and local tax burden as a percent of income of all area residents. All taxes put together, all income put together.

          Or better yet read the one before, on how the calculations were made, and download the spreadsheets with detailed data in on revenues as a percentage of income and expenditures as a percentage of income. No need for me to know things that you or anyone else doesn’t, after I put in so much effort to accomplish the reverse.

          I’ve included Census of Governments data on every county in NJ, with the caveat that public school spending data for some counties is thrown off by the fact that the state is running some of the schools there (so the spending counts as state spending) and I couldn’t allocate NJT among counties.

          Reply

    • Larry, just returned from a visit to the Carolinas to check out real estate. Seems like so many liberals and progressives have already moved that it is becoming NJ minor. NC is about 10 years away from where NJ is now. Real estate continues to decline there although real estate taxes are much lower. Over building, over development, further bringing down values. So many retirees, public and private and they expect all of the overly generous services that they were receiving in NJ. Although NJ may be gone, it is just a matter of time before it hits the more conservative states as soon there will be more transplants than locals.

      Reply

  2. Posted by bpaterson on April 17, 2015 at 10:23 am

    race to the bottom, all hell will break lose and the armed police and security forces that are in place to keep the calm will actually be part of the angry mobs. A picture is slowly being painted that is not good.

    Reply

  3. Posted by dentss dunnigan on April 17, 2015 at 12:24 pm

    • In a deflationary economy, the value of IOUs keeps going up, making them more and more difficult to pay. Debts, pensions, etc.

      Reply

    • Posted by Tough Love on April 17, 2015 at 12:39 pm

      Likely not for cash pay, but I can see that (IOU’S) happening with NJ’s pension payouts once we reach “pay-go”.

      When there is only enough CASH left to pay one group, we’ll certainly choose those (supposedly) “working”.

      Reply

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