- The new carrier will go at least $370 million over the cap according to a Pentagon audit.
- The current overall estimate for the new carrier is a whopping $11.9 billion, one carrier, vs. the original cap estimate of $11.5 billion.
- And this is not a hard, final estimate since the audit personnel are still waiting for final Navy estimates, implying it could change and go down (unlikely) or go up further.
- To complete the build out, the Navy now has to either go back to Congress to get the cap increased and more money released or reduce the fighting capabilities of the ship.
- If there is any good news is the fact that the first Ford carrier cost over $12 billion to build, a number that was 22% above the original estimate. At least this second carrier is less than that if that is any consolation.
- According to a recently released report from Standard & Poor’s (S&P) Global Credit Portal, many states are still in financial stress or crisis mode: “Six years after the recession ended, many U.S. states are hard pressed to balance budgets because of a sluggish recovery and their own policy decisions. The fiscal fragility raises questions about how they will weather the next economic downturn.”
- Thirty two states are currently facing budget shortfalls in either fiscal year 2015 or 2016.
- The S&P report states that many of these shortfalls are manageable but raises the issue if there are shortfalls while the economy is in recovery mode, what happens when the next downturn hits, especially considering that the national economy shrunk in the first quarter of 2015.
- And some states are truly in crisis with Kansas, New Jersey, and Pennsylvania having all been hit with credit downgrades in the past year or so.
- A main component of the states’ budget woes is the heavy pension obligations they have put themselves in for retired and future retired state workers. According to the S&P report, the size of those obligations will be a defining factor in the future credit rating of state governments.
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