GREETINGS FROM THE EMPIRE STATE - AT 7:57 P.M. ET:  Ah, New York.  My home state.  Home of Wall Street...which is booming, and generating enormous tax revenue.  Why, all is well, all is well.  The market is back.

Not so fast, Jones.

According to the governor, we're a month away from going broke: 

ALBANY (CBS) — Governor David Paterson called an unusual joint session of the Legislature Monday to implore recalcitrant lawmakers to close the state's huge budget gap before New York runs out of money.

To some lawmakers it's nothing more than a photo op to help Paterson get re-elected. But the governor is dead serious. He said if the Legislature doesn't cut the budget now the state could run out of money by next month.

"We're going to run out of cash in four and a half weeks. We are going to run out of money. Unless we do something about it, (it will) threaten generations," Paterson said.

And so began what is turning out to be a tense tug of war between Gov. Paterson and the Legislature.

The governor says $3.2 billion in cuts must be enacted how -- or else. The cuts range from $500 million in agency spending to over $1 billion in already committed in aid to school districts and hospitals.

COMMENT:  Why do I burden you with our woes?  Because there's an ominous sign here:  If we're in trouble, with all the revenue being generated by Wall Street, we can only imagine what's happening in other states.

And what will have to happen here?  Budget cuts...or tax increases.  New York is already facing an outmigration of some of its most talented people, fed up with high taxes, poor services, and a cost of living that's through the roof.

Welcome to the recovery.  Not on my block, I'm afraid.  Both New York and California, profligate states where policy is often made by political elites meeting in lavish apartments or mansions, are warning signs for the rest of the nation.

November 9, 2009