Validation of Corzine's Economic Policies

by: Martin

Tue Aug 19, 2008 at 10:02:03 AM EDT

At a time when Jon Corzine is getting pretty beat up in the court of public opinion, some very good news about his policies received little notice last week, and this news seems to validate Corzine's economic policies to some extent. Wall Street just gave the governor some very welcome news ,about his policies.

Martin :: Validation of Corzine's Economic Policies

Standard and Poor's (think S&P 500), a financial services company that analyzes credit ratings, just gave the governor a glowing review of his economics in his third year in office:

Standard and Poor's cited the state's "significant progress" in balancing the budget and restoring reserves.

Two other financial services' companies also provided a positive analysis of Corzine's work and New Jersey's improved fiscal health under his administration:

Fitch Ratings praised the administration for taking steps to correct chronic fiscal imbalances and begin addressing the state's long-term liabilities. Moody's noted the state's decreasing debt burden.

Further, through Corzine's
early retirement plan and from his general culling of the state's workforce, thousands have been taken off the state payroll; debt is being further reduced each budget year of the Corzine budget ($900 million paid in this year's budget alone, according to Corzine; and money is finally being put into the state pension fund ( $1 billion in FY 2008 and other such entitlement funds that haven't been replenished for years.

And now, after he's instituted these policies, Corzine has seen some validation of his work in these credit agency ratings, which will result in lower interest rates for any bonds the state has to seek in the future, though we still need to curtail any and all borrowing to ensure financial health.

If the new credit ratings validate Corzine's economic policies, at least partly, then should we, that is, Blue Jersey and the progressive community, have gotten behind his now-defunct asset monetization plan? Juan supported the plan in theory, as long as it didn't become a way for local politicians to get a kick-back; but otherwise, we were relatively noncommittal on the issue. Though one can see how an 800% increase over the next 20 years or so on major New Jersey roads is a hard sell, the benefit of that revenue would have righted the state's finances in revolutionary way. According to projections, the state's debt would have been halved from over $30 billion, and transportation funding would be guaranteed for years.

Even without the asset monetization plan going forward in its first incarnation, some tailored-down version of it most likely now go before the public and state legislature. But N.J.'s credit rating is improved, and signs point to a better fiscal health for the state under Corzine's leadership - shouldn't we now somewhat trust this former Wall Street executive's economic policies?

Tags: Jon Corzine, Wall Street, Asset Monetization, fiscal, (All Tags)

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Validation of Corzine's Economic Policies | 2 comments

A better rating for NJ would be (4.00 / 3)

something very new, & good. But I see the asset monetization plan as a farce.

In 20 yrs we will be looking at a very different mix of transportation, probably many fewer vehicles per person on the roads & hiways. It may be very likely that few would want to get involved because of the potential for the out yrs to reel in fewer toll revenues.

I favor increasing tax progressivity as Clinton did in his yrs in the White House, as a way to pay down debt. If Obama also does this on a national level, the term "unfunded mandates" which we came to know after Reagan dropped top rates from 70% to 28%, ... those Federal mandates can return to being funded by the Feds. States, Counties and Municipalities that raised taxes to cover Reagans unfunded mandates should find themselves in surplus as a result.

If all this happens, then in 4 yrs very few in NJ will even remember what asset monetization was.

Check out my 3 paragraph primer on Polywell Fusion.

by: FogerRox @ Tue Aug 19, 2008 at 18:57:27 PM UTC

You left out... (4.00 / 1)

His transportation policy... refinancing the fund's debt for a 5 year fix that was supposed to take him safely past re-election.

Unfortunately, his plan came up a year short and now we are faced with a gas tax increase while prices are $3.50 a gallon, when he could have enacted it (however unpopular) when it was $2.50 a gallon and we would be that much farther ahead at this point.

Also, I'd point out that whatever gains in paying down debt were made, they are about to be wiped out and then some with the 3.9 billion we just borrowed without voter approval.

It's my guess that the effect of the governor's policies won't really be felt until he is safely out of office.

Let's see what those agencieis have to say in 3 years.

(and yes, I'm assuming the gov. does not win re-election, either he's primaried or the Republicans beat him (as astonishing as that sounds))

"Where ever you go, there you are." - Buckaroo Bonzai

by: William Weber (WjcW) @ Tue Aug 19, 2008 at 19:35:34 PM UTC