Monday, April 16, 2018

Republicans Downgrade Malloy

S&P Global Ratings has lowered Connecticut’s rating one notch from A+ to A. Credit analyst David Hitchcock provided a list of reasons justifying the downgrade.

Hitchcock noted, according to a CTMirror story, that Connecticut has one of the highest per capita debt ratios in the nation, having ended the last fiscal year with a taxpayer bonded debt approaching 24 billion. The state has been struggling with ways to provide support for its poorly funded municipal teachers’ pension program. Connecticut, according to Hitchcock, “has a history of deficit financing during recessions.” Connecticut has yet to recover fully from a recession that official ended several years ago. The state’s emergency budget reserve is dangerously low at $210 million, according to Hitchcock, an amount just larger than 1 percent of annual General Fund operating costs. CTMirror reports that “Comptroller Kevin P. Lembo recommends a reserve of 15 percent.”

Governor Dannel Malloy, as might be expected, is disappointed at the downgrade which, among other things, will raise the cost of borrowing and broadcast Connecticut’s fiscal problems to investors both inside and outside the state.

Malloy’s take on the downgrade might have been politically useful had he decided to defend his two terms in office by running for a third term as governor, but both Malloy and his Lieutenant Governor, Nancy Wyman, have concluded that all good things must come to an end.

Malloy has given no indication that he has been made an offer he could not refuse. Some politicians who flee from high office do so because their services have been purchased by a higher bidder. The doors to a bright future in a national Democrat administration slammed shut when Hillary Clinton’s presidential campaign was sunk by current President Donald Trump. Some Democrats dearly wish to impeach Trump and others, notable among them Connecticut’s two U.S. Senators Dick Blumenthal and Chris Murphy, have broadly hinted that Trump may be mentally deficient, which immediately raises the question: How could Clinton have fallen to such a political pygmy? Leading Democrats have provided an apparently acceptable answer to this question. The Russians, under the direction of Vladimir Putin, Trump’s co-colluder, torpedoed the Clinton campaign. The nation is waiting with baited breath for Special Counsel Robert Muller to pull evidence of collusion from his open-ended inquisition.     

Concerning the S&P Global Ratings downgrade, Malloy said through a spokeswoman, “Considering the state went four months without a budget and has yet to address the current year's deficit, it should come as no surprise Wall Street is taking note.” Apparently taking little notice of Hitchcock’s bill of particulars, Malloy added, “It’s important to note that Connecticut’s budget situation [entirely the fault of a breakaway General Assembly that did not consult Malloy on the recently passed budget]  and historic underfunding of long term liabilities [which may be laid at the door of past governors] not this recent action [the S&P Global Ratings], are driving the state’s rating.”

Senate Republican Leader Len Fasano assessed Malloy’s assessment and found it wanting.” In the governor’s delirious world of fantasy,” Fasano said, the Malloy’s administration “seeks to blame others for his devastating economic policies, which will be the legacy he leaves behind in the state of Connecticut. It’s disappointing to see this downgrade but not surprising given how Governor Malloy has led our state over the last seven years and how Democrat lawmakers have controlled our legislature for decades. Since Governor Malloy took office, Connecticut’s bonded indebtedness has increased by over $6 billion as a result of his historic and irresponsible reliance on the state’s credit card.” Drawing a quick breath, Fasano continued, “The Malloy administration, with support from Democrat lawmakers, has also approved contracts that lock Connecticut in to expensive state costs until 2027, severely limiting our ability to get out from under. If Governor Malloy seriously thinks this downgrade is a result of a legislative budget that for the first time ever put caps on how much the state can spend and borrow he’s more out of touch than I ever imagined.”

And there you have in a nutshell the GOP campaign against any Democrat gubernatorial wannabe who does not sharply disavow Malloy’s reckless course as Governor.

Democrats, for their part, intend to tie Trump around the necks of Republican wannabe governors, hoping that the weight of the albatross will pull them under. This strategy is imperfect for obvious reasons. Apart from the beneficial effect Trump’s military procurement has had on several industries in Connecticut connected with the US war machine – Pratt&Whitney, Electric Boat, Sikorsky and assorted state industries dependent upon the production of war material – his presidency has had a negligible effect on policies dear to the heart of progressive Democrats. Connecticut’s sanctuary cities remain undisturbed; the state’s assault on the National Rifle Association (NRA) still is loudly bawled from the rooftops; and General Assembly Democrats still have their eyes avariciously fixed on the prize – let’s have another tax increase, shall we?

Trump’s term in office will not end until January 20, 2021, unless of course he is impeached, and Trump is not running for office in Connecticut. Malloy’s progressive Democrat brood will be running for office, and there are indications that Connecticut voters are dissatisfied with the product. It’s the policies – stupid – that collectively represent a cul-de-sac for Democrat gubernatorial candidates. Realizing the mayoralty of Hartford is a safer political haven than the governorship of Connecticut, Malloy's political protégé Luke Bronin wisely decided over the weekend to abandon his bid for governor. And why not? Malloy and willing accomplices in the General Assembly have now assumed Hartford’s $755 million in debt payments, according to Bloomberg News.  As governor, Bronin would be grappling with a multi-billion dollar debt, Malloy's legacy to his state.

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