Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at intelligent and rational individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

"Observe that the 'haves' are those who have freedom, and that it is freedom that the 'have-nots' have not." Ayn Rand

"The virtue involved in helping those one loves is not 'selflessness' or 'sacrifice', but integrity." Ayn Rand

07 June 2010

How Obama's Illinois Government Pays the Bills

According to the 4 June 2010 St. Louis Post-Dispatch, Illinois has a $13 billion over-spending problem.  This has created a terrible cash flow problem.  Actually, the state has had a severe cash flow problem for years.  How does it deal with this problem?  Well, logically, it should cut back its spending or it should raise taxes.  But, taxes are not popular just now and they chase people into the underground economy or away to other states with more reasonable taxes, so the government of Illinois has not raised taxes enough to deal with their shortfall.  What they do is pay their bills very late.  As of 2 June, the state comptroller's office admitted to being about $5 billion behind in paying its bills!

Independent pharmacies are still waiting for payments by the state on Medicaid  prescriptions that should have been made in January.  There are 240,000 late payments to vendors and schools and cities.  Some regular state vendors have not been paid since October.  The Illinois comptroller's spokesperson, Carol Knowles, says
Every day, all day, we hear from vendors who are requesting emergency payments to make their payrolls or to keep the lights on.
As a small business owner, I know how rotten it is to be faced with payroll and payroll taxes on work performed long ago for payments long overdue.  Not paying your bills in a timely way is an instance of fraud. Many states, especially Obama's Illinois, habitually resort to fraud.  This is how irresponsible overspending is sustained in Obama's home hood.  This is how Obama learned to govern as a state senator in the Illinois legislature.  Promise spending, engage vendors for their goods and services, and then say we will pay you when it suits our convenience.  Of course, the state absolutely requires its unpaid vendors to make on-time payments to the state of withholding taxes from the vendor's employee pay!  This makes state government fraud especially egregious.

It would appear the state of Illinois is counting on saving a lot of money by not paying many bills until many of their vendors have been driven into bankruptcy.  I suppose that bankrupt and unoperated companies are less likely to make those daily calls pleading for payments so they can keep their doors open.  What a neat way to overspend and never face the consequences.  There is a bit of a problem, however.  I would not do business in the future with such a customer.  Of course, elderly care operations may find it more difficult to do without state payments than a material analysis laboratory would, but soon many of them will be out of business and many elderly will not be cared for, including those not dependent upon state assistance.  The irresponsible state, claiming to be unable to reduce its spending out of concern for the poor, will soon have no way to claim it is helping the poor.  The means to deliver the services will have been killed.  It is the nature of the parasite to kill its host.

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