Money is running out in New York. Countless thousands of residents count on the state and local governments for at least part of their income and resources. I lived in New York during the transit strike in 2005 which only lasted two days, but dozens of citizens lost their jobs because, sans the trains, they had no way of getting to work and none had the experience (or gumption) to walk to work as I did. As a long time hiking enthusiast who worked in non-profits (and thus could show up to work a little sweaty) before working for myself, a slowdown in public transportation in a city which was in many ways fairly provincial (I lived in the Bronx and traveled to upper Manhattan, but rarely beyond, an experience many New Yorkers shared) was not a big deal.

But I often traveled through parks, and draconian laws governing self-defense made everyone reliant on the police for their protection. Had the police gone on strike in 2005 and other city services shut down, I would not have been as sanguine about walking from Riverdale through the rough Marble Hill neighborhood and beyond. Now a cash strapped New York is looking at just that scenario, where every service run by the city faces shut down as New York runs out of money.

From WCBSTV.com:

ALBANY (CBS) ― Chaos and anarchy. That’s what New York Gov. David Paterson is warning if he’s forced to shut down the government in a few days.

The clowns in the state Legislature, now deadlocked for 71 days on the budget, are ready to take down the “big tent” and bring state government to a standstill. At least that’s what Paterson thinks.

“No one knows the full ramifications of a government shutdown,” said Paterson. “It would create unimaginable chaos around the state and the greater metropolitan areas.”

Such chaos includes closing all state parks, motor vehicles offices, courts, and even the lottery. Public assistance payments would not be made and unemployment payments might also be held up.

The governor is in this pickle, in part, because wild cards like Sen. Ruben Diaz Sr. (D-Bronx) and possibly scandal-scarred Sen. Pedro Espada (D-Bronx) might not go along.

Ruben Diaz and Pedro Espada are corruptocrats who have been on the wrong side of most issues since they came to power. Both believe they are playing chicken with Paterson; that the liberal Governor is just withholding cash that’s sitting in his private safe. Products of New York’s substandard educational system and greedy political culture, they have no idea what dire financial straits the state is in:

“I am not voting for any more cuts. I understand that it is painful,” said Diaz. “But the governor is leaving me no choice.”

The other renegade, Espada, thinks there might be a budget deal in the offing, but, he said, “I would vote no if such a massive cut were included because the state needs a fiscal plan.

Paterson called both men “thugs.”

Espada, like some in both houses of the Legislature, thinks lawmakers will find a way to avoid bringing the government to a grinding halt.

“There will not be a shutdown on Monday. We’ve never wanted a shutdown,” he said.

He may not want one but he’s likely to get one, if not Monday then sometime before 2012. Tax receipts will continue to go down and next year they will likely be smaller than ever for New York as American economic activity slows in reaction to coming tax hikes. In New York this means tough choices that, no matter what, will lead to chaos. In New York there are families that have lived on welfare for several generations, drug addicts in rehab programs get “allowances” to help them (which often helps them stay on drugs) and many people with low paying jobs are completely reliant on public transportation. Stop paying welfare and people who have no idea how to care for themselves will riot, cut the allowance to drug addicts and the ones who aren’t clean will go back to stealing or hooking to get their fix. Slowdown the trains and unemployment rolls will swell and New York already can’t pay out benefits to people on unemployment now.

Get the picture?

Get out of New York. If this crisis is “averted” it will only be because they delayed the inevitable collapse. New York, as a model, is unsustainable. Not just the entitlements which speed up the destruction, but the city as it is. It uses billions of gallons of gas a year just to keep the city running, including the near constant delivery of food stuffs from around the world. It needs a literal army of police to keep order and battalions of health care workers to keep the population from dying off. Without the massive wealth of the financial industry New York cannot function and no matter how many “green shoots” the blind bulls claim they can see, the financial industry in New York is broke. The rich are fleeing the tax hikes, Wall Street is bleeding dry and inflation, particularly food inflation, is only making the model of large cities that become states unto themselves increasingly impossible.

Whether it begins Monday or next week, the volatile New York area will become unlivable soon. It’s time to flee. I moved to South Carolina because I saw the writing on the wall and I suggest anyone with the means get out of dodge as soon as possible.

I rolled out of bed sometime in the afternoon because one of the good things about being some crazed survivalist/blogger is that you answer to no one except the wife and bill collectors. I wasn’t surprised to see that there was a stock rally today because the world’s suckers, er, I mean investors, are panicked and looking desperately for places to park their imaginary and soon to be worthless electronic money while the global financial economy collapses. What does shock me, always, is how these rallies have nothing but rainbows and pixie dust at their base.

As I write this the market is up 237 points. Why? As the AP screams in their headline the market is “surging” on U.S. jobs data and chinese exports:

NEW YORK (AP) — Stocks surged Thursday after reports on the U.S. job market and Chinese exports lifted anxiety about the global economic recovery.

[…]

Markets around the world rose after China said exports rose 48.5 percent in May, while imports jumped 48.3 percent. The increase in trade provides some relief to fears that debt problems in Europe would halt a global economic recovery. The 27-nation European Union is China’s largest trading partner. China has said it wanted to cool its economy to keep it from getting overheated and forming speculative bubbles. Traders had grown concerned that China would inadvertently slow growth too much and hurt a global rebound.

“China so far has been able to pull this off,” said John Apruzzese, partner and equity portfolio manager at Evercore Wealth Management in New York. “There’s more focus on Europe but I think it’s more about China.”

[…]

While investors worry about how Europe’s debt problems could hurt the rest of the world, there are also concerns about the job market in the U.S. An unemployment rate of 9.7 percent remains one of the biggest obstacles to a strong domestic rebound.

The Labor Department said new claims for unemployment fell by 3,000 to a seasonally adjusted 456,000. While that figure fell short of economists’ forecast, investors were heartened by figures showing total claims last week dropped by the largest amount in almost a year. Total unemployment benefit rolls fell by 255,000 to 4.5 million.

On its face the drop is good news but there it could also indicate that people have run out of their state benefits and are moving to longer-term federal benefits.

Still, the drop in total claims provides some hope that laid-off workers are starting to find jobs. It was welcome relief after the Labor Department said last week that private employers slowed their hiring in May to the lowest levels since January.

Huh? So let’s take these one at a time. China is claiming their exports were up nearly 50%. So what? China is basically claiming we broke Americans and broke Europeans are buying more cheap Chinese goods and that in return they’re buying more expensive American and European ones? Sure.

Good news? Maybe for China (if it’s true) but how do China’s potentially cooked books help the “global recovery” when Western economies are in worse shape than ever? Debt problems are “spreading like cancer” and the long predicted Municide of the American markets by out of control government spending is right on the horizon.

So even if China’s Communist Party could be trusted to not cook their books, China having a good export month while the west drowns in debt is only a good economic indicator if you’re an official in the Chinese Communist Party. But investors are so desperate for some good news that can help them pretend their illusionary wealth is still real and able to fund their clients’ “modest” lifestyles (like retiring to Florida while paying their adult children’s rent) that they’ll take what they can get. A rainbow drawn on paper by a Chinese commissar who tells them to believe the Chi-Coms rather than their lying eyes.

The job data spin is equally asinine. Just a couple of posts ago I showed you the hundreds of Tennessee unemployed who stormed the the unemployment office when their benefits ran out. Those people didn’t get the Senate’s expected extension of benefits. Wonder why politicians didn’t extend benefits to these long term unemployed? This market rally, based on manipulated unemployment numbers, is why. The government cutting people off after its policies made people dependent on the government teat is just the pixie dust government data pushers needed to get the market to swallow the turd sandwich that is our economic outlook.

A little pixie dust and a rainbow is all it takes to get suckers to start pouring their money into a collapsing and worthless system. Of course, all these gains will be gone next month. But the government and the markets kept the show going one more day so everyone is happy.