Moody’s Assigns Negative to New Jersey; Questions “Comeback”

The rating agency forecast that New Jersey is falling behind the nation and revenue will remain below expectations. Since government revenue is almost a direct function of GDP, the forecast indicates that New Jersey’s economic growth will lag behind the rest of the country for the next 14 months. Job creation is also determined by economic growth.

This is an implicit indictment of the economic policies – or lack of – of the Christie administration and his democrat accomplices in the N.J. Legislature.

Add Moody’s to those questioning Christie’s ‘Jersey Comeback’ : page all – NorthJersey.com.

Governor Christie launched a propaganda blitz with his “New Jersey Comeback” at the start of the year, perhaps aiming more to a national audience than to New Jersey itself. However, it has backfired in the face of the numbers. In fact, New Jersey is a drag on the national economy.

The evidence is symptomatic of a monumental philosophical failure.

At the roots of our difficulties is the reluctance of both dominant parties to engage in the drastic structural reforms needed. An overhaul of the tax code, increasing the minimum wage, elimination of the layer of county governments, and a constitutional amendment abolishing certain aspects of home rule are at the core of those reforms. Already in the third year of his administration, the governor is short in time to begin implementing the changes needed, even if he wanted to.

In the end, the future of New Jersey will be in the hands of the voters in November 2013: You will be deciding your own future and your children’s.

Advertisements

Contrary to National Trend, Curve of Foreclosures in New Jersey Points Up

“New Jersey officials estimate 50,000 to 100,000 previous cases are still pending.”

NJ Spotlight | Foreclosures in New Jersey in a Troublesome State of Flux.

Of course there are a number of reasons for such a sorry condition. However, two causes that stand out are:

1. Our huge property taxes which in many instances amount to the equivalent of second mortgages and:

2: The New Jersey economy is more stagnant than the national economy – in spite of the “New Jersey Comeback” fairy tale.

The potential consequences of this housing trend in our state are to be measured in both human and fiscal terms. In the first, we will have more homeless families, more broken homes, more children living in poverty, etc.

In the fiscal area, as more homes are foreclosed, property values tend to decrease, bringing more homeowners to give up on their de-valued homes, when their pre-recession mortgages sink deeper under water.

To a degree, the approaching wave of foreclosures could have a snowball effect on the economy of New Jersey. That is foreclosures trigger more foreclosures and additional economic strains: Less consumption, more pressure on social services, less tax revenue, etc

With housing one of the main residual industries in the state, this phenomenon will stall any significant growth that other niches of the economy may achieve.

Abolishing property taxes for primary residences and some commercial property in New Jersey, as I propose (please refer to Pages for details) is almost a matter of survival for our state. Zero property tax would have a lifting effect on property values almost immediately.

I am not proposing such drastic reforms as I have been doing for 2 years because I want to make a mess of things: They are desperately needed. That is the only reason.