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State Revenue and Food Shortages

U.S. states suffer "unbelievable" revenue shortages

Most states had been pessimistic in forecasting their tax revenues for the 2010 fiscal year, Pattison said. So far, collections have fallen below even those low targets.
Lower tax revenues could lead to higher taxes or another sharp reduction in services if receipts do not show signs of improvement before year-end, as every state but Vermont is required by law to balance their budgets.
That could mean fewer teachers, early prisoner releases and fewer highway repairs as residents battle soaring unemployment.

So, I keep reading about economists talking about how the economy has recovered and growth has been restored. Doesn't that mean that state revenues should be increasing and not decreasing? Something does not add up. Printing trillions of dollars over the last year will influence the GDP, indeed, but that does not mean recovery.

In the second quarter of calendar year 2009, total state revenue was down 18 percent compared with the period in 2008, according to the National Governors Association, which projects revenue will not return to pre-recession levels until 2014 or 2015.

So, the Governors are talking about it taking 4 or 5 years for a complete real recovery to take place.

Could Food Shortages Bring Down Civilization

"In early 2008, Saudi Arabia announced that, after being self-sufficient in wheat for over 20 years, the non-replenishable aquifer it had been pumping for irrigation was largely depleted," writes Lester R. Brown in his new book, Plan B 4.0: Mobilizing to Save Civilization (W.W. Norton and Company).

"In response, officials said they would reduce their wheat harvest by one eighth each year until production would cease entirely in 2016. The Saudis then plan to use their oil wealth to import virtually all the grain consumed by their Canada-sized population of nearly 30 million people," notes Brown

A World Bank study of India's water balance notes that 15 percent of its grain harvest is produced by overpumping. In human terms, 175 million Indians are being fed with grain produced from wells that will be going dry. The comparable number for China is 130 million. Among the many other countries facing harvest reductions from groundwater depletion are Pakistan, Iran, and Yemen.

"The tripling of world wheat, rice, and corn prices between mid-2006 and mid-2008 signaled our growing vulnerability to food shortages," says Brown. "It took the worst economic meltdown since the Great Depression to lower grain prices."

The food outlook for the world is looking a bit grim when put like this.