Rebel Traders - Stock Market and Economic Analysis

When individuals don’t pay their bills for 3 months creditors will put the screws to you in any way they can. When state and local governments don’t pay the bills for 3 months it just goes into a ‘this is the new normal’ and no punishment is given to the state and local governments. Besides, you can’t fight City Hall as the old saying goes.

You do realize that one day the “full faith of the United States Government” will no longer mean anything when it comes to making good on its debt.

(CBS News) The State of Illinois’ pile of unpaid bills has grown to a record-breaking $3 billion. Comptroller Dan Hynes said Tuesday it’s never before been this bad at this point in any previous fiscal year. CBS 2 Political Editor Mike Flannery reports that some social service agencies that rely heavily on state reimbursement warn they will soon be forced out of business.

Hynes said that things are likely to get worse before the state’s bleak revenue picture begins to improve.

The comptroller reported corporate income tax receipts down $77 million for July through September; sales tax receipts, down $244 million; personal income tax receipts, down $251 million.

One result: the typical creditor must now wait three months to be paid by the state, compared to a two-month wait at this time last year.

It’s all very discouraging to the physician who runs Family Home Service.

Dr. Norman James said he does not have enough cash to pay his 250 employees this Friday. He said he may have to close the doors, leaving more than 450 clients without the support they need to stay in their own homes and out of expensive nursing homes.

Dr. James said his bank had tripled the size of his line of credit, but that money is now all gone. Dr. James said Illinois owes his agency $900,000, about $700,000 of it past due by up to five months.

Evelyn Gonzalez, a Family Home Service supervisor, said she can’t afford to miss a pay check.

“It’s nerve-wracking. Because I have bills to pay just like everybody else,” Gonzalez said.

A Chicago Meals on Wheels and nutrition center can’t purchase food and is facing eviction,” Hynes said. “A large Lake County disabled program can’t make insurance or mortgage payments.”

Hynes said he’s now getting 2,600 calls a week from creditors desperate to be paid by the state.

While the General Assembly is scheduled to reconvene next week in Springfield, no one’s even pretending to offer a comprehensive solution to the unprecedented budget disaster. Democrats and Republicans, the governor and legislative leaders all insist that must wait until next year.

Late Tuesday, Mayor Daley described Chicago’s revenue situation as “very serious.”