Posted on 10/02/2008 11:34:37 PM PDT by BurbankKarl
California Gov. Arnold Schwarzenegger, alarmed by the ongoing national financial crisis, warned Treasury Secretary Henry M. Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the federal government within weeks.
The warning comes as California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent.
The state of California is the biggest of several governments nationwide that are being locked out of the bond market by the global credit crunch. If the state is unable to access the cash, administration officials say, payments to schools and other government entities could quickly be suspended and state employees could be laid off.
Plans by several state and local governments to borrow in recent days have been upended by the credit freeze. New Mexico was forced to put off a $500-million bond sale, Massachusetts had to pull the plug halfway into a $400-million offering, and Maine is considering canceling road projects that were to be funded with bonds.
California finance experts say they know of no time in recent history when the state has sought an emergency loan of this magnitude from the federal government. The only other such rescue was in 1975, they said, when the federal government lent New York City money to avoid bankruptcy.
"Absent a clear resolution to this financial crisis," Schwarzenegger wrote in a letter Thursday evening e-mailed to Paulson, "California and other states may be unable to obtain the necessary level of financing to maintain government operations and may be forced to turn to the federal treasury for short-term financing."
(Excerpt) Read more at latimes.com ...
I guess papering over the budget deficit this year and pushing it into next year was not a good idea.
This is going to be big news....more than all the business shutting down and laying off already.
Can’t be. We all know that illegal immigrants contribute far more to the economy than what they produe. With all the millions of illegal California should be souring. So it’s impossible for the state to be in trouble because they have so many immigrants.
7B, a mere bag of shells these days.
A lot of illegals have gone home...
It is sad that a billion bucks seems like nothing today is’nt it?
These people have lost their minds! Why is it my fault that California government cannot function? Why is it my fault that people bought homes they could not afford? Why is it my fault our automobile companies cannot stay profitable?
Why is it the fault of my 1 and 3 year old children who can’t vote but are being asked to pay for all of the failed policies of prior generations?
And yet there's at least three new state bond proposals on the November ballot!
There is a Measure R in LA County....The LA MTA mailed a brochure to every USPS customer in the county! I think it adds another half cent to the sales tax for transit.
But we already have a transit tax...and the State monies have been diverted to take care of our South of the Border guests.
Ask Wall Street for it, Arnie, I hear they’re coming into BILLIONS soon.
When my dad sold his Orange grove and spray rig business and moved to a farm in Oklahoma we missed the good old days of living in the central valleys.
I came back to California in 2006 from South America thinking things were great.
I still have not fully figured out everything that is wrong but it does not take a rocket scientist to know that California voters have been on a buying binge for years.
Years of inane...no down right stoopid, laws have killed the Golden Goose.
When I first moved to the beach in San Diego my neighbor said why did you move here.
He stated that thing's were about to crater and the liberals just could not accept the fact that they had damaged California to a point of no return.
Just my lowly opinion.
Truthguy. Noticing myself how the LSM, the POTUS candidates and the VP candidates are avoiding this subject completely. The Libs don’t won’t to discuss the financial implosion of their cultural mecca. A prime example of failed social engineering policies and its associated costs.
Californians live in a physical paradise and vote themselves all kind of benefits, and look down their noses at the rest of the country. Now WE are supposed to bail them out?
Maybe a few have left here, but, a lot of illegals have moved to NC to be supported by the Dim legislature and gov here. Crimes being reported perpetuated by illegal Hispanics in my area is continuing to skyrocket.
Think utility workers(water and sewer),,,
Lay them off and watch what happens...:0/
Is this because of greedy CEO’s too? /sarc
Ping
What’s the saying....Among the states, California is the leader. You know, air pollution regs, designer gasoline blends, coaxial fuel-vapor-recovery hoses on gas pumps; tree hugging, whale appreciation, mantras, and prayer circles.
I am sure Hank wants to set a fine precedent here. Then there would only be 56 more states to bail out.
The State can cut $7-billion from its annual budget and live within its means.
Have to cut out road maintanence? The roads are in lousy shape already. They can revert to dirt.
Have to cut out welfare benefits? Too bad. Can't afford it.
Have to close down the universities? Too bad. Close 'em down.
Can't afford police protection? The citizens will have to buy guns and protect themselves.
Bail out California? Don't make me laugh!
Boo hoo hoo! Waaaaaaaaaaaa! To @#!@%#! bad!
Close down the schools! Close down the other government entities! Fire the state employees!
The world's seventh biggest economy is living beyond its means. Let reality crash down and demolish the delusions. It'll be the best thing that could happen to those nutcases.
Tough mammary! NM, Mass., and Maine can't afford those things. That means DO WITHOUT THEM!
Of course, that is only half of the equation. watching where it goes is important, too.
Yes. And when they don't get the short-term financing--they will discontinue programs and fire employees that they can't afford. It's very simple really.
No!
Ever think of that, Arnold?
What is TU?
Feds to Arnold:
DROP DEAD!!
(an old NY POST headline when NYC went bunkrupt in the 1970’s)
To misquote Robert Moses, “If you elect a matinee-idol governor, you get a musical comedy administration.”
Toes Up as in “It’s dead, Jim”
Either quit writing in alphabet soup or put your toes up as in dead!
Arnold has done such a dismal job as Governor that I believe a Democrat will be governor in 2010. Hopefully not, but I would place a bet on that one.
Was that last post to me, or the Freeper you posted to originally, BurbankKarl?
To anyone that spews that crap!!!
Every PIG hightailing it to the trough!
“Arnold has done such a dismal job as Governor that I believe a Democrat will be governor in 2010. Hopefully not, but I would place a bet on that one.”
Gov Wimponator could be replaced with one of the hard core left Dem’s in the State Assembly or Senate tomorrow and policy-wise, nobody could notice any difference. Arnold on the silver screen plays the toughest of the tough, but in real life politics, he makes PeeWee Herman look intimidating.
i.e. on the budget ‘crisis’ (something we manufacture regularly in Calif), Arnold told his Comptroller (right title?) to pay state employees minimum wage until a budget was passed. The Comptroller refused. And Arnold did not fire him, but instead caved in to the Dem’s demand for more tax increases (as if Calif was not already vying for title of highest tax State).
Suck it up and earn it out or go bankrupt.
Maybe people will finally get how the DemocRATS have screwed the state's residents.
California should get Streisand and Spielberg and Sarrandon and all the other rich Hollywood liberals to line up and bend over. They have more money than the federal government does.
Sorry Arnold,
Any state government that thinks that it can get cash out of the Feds in this time of Financial troubles and bank tightening is not working in reality.
It may be hard, but the states may actually follow the lead of businesses. When times are tough and lean, it is time to print a healthy quantity of pink-slips.
I would suggest cut state management positions first, they are all backed up with double redundant systems. Next you should cut the social service staff by 50%, the teachers’ aids and helpers, and administrators. You don’t need more than one adult teachers per class of kids. You should also cut the free tuition for the state schools. Without the students making a financial investment of their own, they only see college as a continuation of high school and do not actually study.
There are other places to cut. Be creative.
There's no legal avenue for a state to declare bankruptcy. Their choices are raise taxes, cut spending, or fall apart, the end stage of a communist regime.
Maybe the silver lining on this cloud is that spending will in fact come under control.
Yeah, I know....dream on.
Too bad, Soooo sad! Kalifornia lives beyond its means and now needs a bailout.
US to California: Drop dead.
Or the more colorful T*ts Up...
Calf. should seek a loan from where most of it’s money went, Mexico.
... And if a lot of “Gods children” went back, who will pick the lettuce?
Note to Schwarzenneger: Go ask Mexico for a bail out since your state loves their law-breaking citizens so much, otherwise, sux to be you.
These people have taken chutzpa to a new dimension! They spend money like drunken sailors and then have the nerve to ask for a bailout!
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