Posted on 10/11/2008 11:00:08 AM PDT by John Jorsett
With credit markets in New York in crisis last week, California Gov. Arnold Schwarzenegger sent an extraordinary letter to Treasury Secretary Henry Paulson asking for $7 billion. Although the governor has since withdrawn that request, it testifies to the dire state of his budget.
Yet days before penning his note, the governor told an audience at the Commonwealth Club of California not to worry about the state's budget crunch and to approve $9.95 billion in new debt on the November ballot to build a bullet train to connect Los Angeles to San Francisco: "Just because we have a problem with the budget does not mean people should vote 'no' on high-speed rail." (A spokeswoman confirmed Monday that, despite the request for federal money, the governor still supports the initiative.)
Actually, the state's budget woes should give votes pause -- especially since high-speed rail is a fantasy that has as much chance of delivering on its promises of creating 450,000 jobs, vanquishing road congestion and lowering greenhouse gases as "Conan the Barbarian" had of winning the Oscar.
The GoldenState's finances are a mess. California's general obligation debthas tripled in the past six years and is now almost equal to the state's $145 billion annual budget. Even without any new loans, in three years the statewill spend a record 6.1% ofits budget just to service the debt it already has. What's more, with the economic slowdown, the state is now expecting a deficit larger than $1.1 billion for the first three months ofthis fiscal year. Thestate's rainy-day fund is running dry, which has hurt its credit rating.
Under such circumstances, the prudent course would be to avoid taking on new debt, even for worthwhile projects, much less sure-shot losers such as the high-speed rail. But in California, prudence is in short supply.
(Excerpt) Read more at online.wsj.com ...
I wouldn't bet on it. Some charismatic leader will come to the fore and tell them the problem is the greedy grapsing capitalist Republicans who need to be put into slave labor camps (to live separately but equally, though) for the public's safety.
Just remember, Dachau was initially a prison camp for the ruling party's enemies.
I live in (unfortunately) Sacramento, and you're right, no job cuts are in sight. And the worst is yet to come. Property values will be reassessed downward, reducing tax inflows. Sales taxes are going to be far lower than predicted. This state is broke, and is going down in flames.
Nancie Pelosi and Barrie Obama will make a great team.
Leftist chickens coming home to roost and the very same people who oppose these plans tp begin with are made to pay for this thoughtless spending.
The engineer, knowing that the bridge ahead is washed out, has the train at full throttle and is screaming at the sweating fireman to shovel more coal into the furnace.
Just because we are broke doesn't mean we should stop spending. These politicians are all insane. They won't stop until the state and everyone in it is bankrupt
He got himself in to this mess and has no business asking taxpayers throughout the rest of the U.S. to bail him out of it.
Fix it yourself, Arnie!
Bankruptcy will be a disaster also especially because bankruptcy will ripple across the entire economy. A California bankruptcy may be followed (or preceded) by bankruptcies in other rat paradises (New York, Michigan, Illinois). The impact of state bankruptcies on the muni bond market will be devasting. I think that the threat of bankruptcy has already had a large impact on the muni bond market. There may not be an option to bankruptcy. The rats will pump money into these states. However, these states have already hit an iceberg. Water cannot be pumped faster than the gaping hole allows more water.
55 minutes
Those morons are convinced that the state's financial problems can all be tied to Proposition 13, which prevents the state from raising taxes without a 2/3 supermajority, and prevents property taxes from increasing arbitrarily. It's all a revenue issue, you know.
Bankruptcy would prove them right, in their minds. They have said that spending is not the issue, revenue is the issue, many times.
"Bush to California: DROP DEAD!"
But that's okay some judge told us 10 years ago we can't cut those bennies. People can come here illegally and feed at the trough.
Gay davis did not appeal that decision. It's time to resurrect the initiative and fight like hell for it. If not, cut judges salaries and let them feel the pain.
I’m sure a bankruptcy would have a bad effect here in Arizona. But who knows? Maybe some Golden State business leaders would choose to relocate in a slightly freer state.
My son is still waiting to get paid for working at the mariposa fire in August! Fine way to treat a kid on his first real job coming out of high school. What does that tell you about this state!
Didn’t California amend its constitution to require public funding of embryonic stem cell research a few years ago? Get back to me on the “fiscal crisis” once you get rid of that brilliant program.
The other poster is right - only a catastrophe will lead to any meaningful reform.
LLS
California is doomed. Doomed. I should know, I live there.
Every single budgetary trick has been implemented over the past 3 years (past decade really). There is nothing left for California to do but cut spending AND raise taxes. The state is now going to have to tell people, we are going to charge you more and give you back less. This will cause a revolution. Well, I hope it causes a revolution and the idiot, ignorant, apathetic California electorate FINALLY puts an end to the liberal Democratic communist political stranglehold that is destroying this state.
But there will be no revolution. All of the idiotic California socialists will be rewarded with incumbency and Gov. Schwarzenegger will take the full blame for everything, even though he has made a few honest attempts to restore fiscal order in Calfornia (I’m sure I’ll get lambasted for that factual statement).
So the ignorant, idiot California voters will “fix” this problem by voting in a socialist governor but returning all of the socialist Senators and Assemblymen.
Brilliant. California is flat doomed. I give it no chance of survival, pre-bankruptcy. Revolution comes thereafter.
Who CARES? Feinstein, BOXER, Schwarz.....ARNOLD, Maxine Waters, Peter Stark, George Miller, etc., etc.. Until this state suffers terribly it will never change.
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