Posted on 04/11/2009 1:09:39 PM PDT by reaganaut1
California has joined the lengthening queue of supplicants seeking help from Uncle Sam. State Treasurer Bill Lockyer is lobbying some in Congress to secure a federal backstop or guarantee on $12 billion to $16 billion of short-term revenue anticipation notes, or RANs, that the state may need to sell as early as July.
Lockyer thinks it may not be possible to sell this debt without federal help, and is seeking to have the Troubled Assets Relief Program, or TARP, expanded to allow banks to sell municipal debt to the federal government, according to a state treasury spokesman. Barring that, he wants the feds to provide a direct guarantee, a service for which California would pay a fee.
In modern times, the federal government has never stepped in to guarantee a municipality's debt, and the fact that California is seeking such support indicates the deterioration of the state's financial condition under Gov. Arnold Schwarzenegger.
...
Normally, a municipality would turn to banks for a letter of credit to support a hard-to-sell deal. But the treasurer's office says such letters aren't available today.
Lockyer has met with House Financial Services Committee Chairman Barney Frank, the Massachusetts Democrat who is drafting legislation that may include a guarantee, confirms Steve Adamske, the committee's communications director.
...
Calls to the Federal Reserve and Congressman Moran's office weren't returned.
...
Others cite the potentially dangerous precedents such guarantees might set. Chriss Street, treasurer of Orange County, Calif., warns that if the federal government backs the state debt, the market for local municipalities will be harmed. "Why would anybody buy the debt of a local issuer if they can get federally backed debt sold by the state?" he asks.
(Excerpt) Read more at online.barrons.com ...
Many on this forum were hot to elect a foreign national; a European socialist in 2003. These Republican ignoramuses persisted through the 2006 election cycle. Now their chickens have come home to roost.
A man, clearly not fit to governor any state, let alone California, is begging alums from a man who isn't qualified to be president of any country, let alone the US.
As security, the Feds will demand all of California’s electoral votes.
How about bonds backed by offshore oil rights?
What a bunch of dorks!
Ya....they should have just left Davis in office....and taken all the restraints off the Dems in control of legislature....who obviously had no role in the current mess.
That was my thinking when I voted against the recall; let it all be firmly on Davis and the 'rat watch.
I live in Massachusetts, which is already in a budget crisis the severity of which I believe will become dire when tax revenues for 2008 are fully known.
The Boston Herald (unlike the liberally censored Boston Glob) is rife with stories about campaigners and friends of Deval Patrick being given six-figure ceremonial positions, and to pay for this Coupe Deval is trying to hike gas, income and other taxes. Tomes could be written about the waste and patronage on Beacon Hill.
I do NOT want the federal government bailing this state out (aside from the fact that there is no obligation to do so). The only way to wake voters up at this point is to fully experience the situation created by the idiots they elect. The same should go for California.
Rarely do we take the trouble to educate the ignorant on the California Topic but ....
1) Democrats did not have the ability to raise taxes unilaterally under Davis.
2) Under Davis, budget excesses originated in the legislator or through initiatives.
3) Davis typically restrained the excesses of legislative Democrats.
4) Under the Austrian, Republicans were still needed to pass tax increases.
5) Since 2004, budget excesses originated from the executive.
6) Since 2004, the executive worked closely with the legislative majority.
The situation would only be worse today if that'd happened. I remember getting off the freeway and finding no street-lights working due to brown-outs.
My vehicle licsense fees were almost double what they are today. But they're slated to go up. Even if taxes and fees had been kept high enough to balance the 'budget', the legislature and it's friends in the state would have outspent every last dime.
The problem is the state's insatiable spending habits that cannot be curtailed. Not even during a recession where revenues would be expected to decrease. Nope, the idiots who represent the idiots who vote for said idiots will eventually bring the whole house down. That's the only alternative left when undisciplined spending goes unchecked.
A fed bailout will only buy time as these legislators are spending like crackheads. Also, the average voter couldn't care if it's Demrats that run this state into a ditch. If it mattered, they'd have said so at election time. It doesn't and they don't- care, that is.
Stupidity at GM pales in comparison to the stupidity of this state's fiscal mess. At least they could build cars and trucks- the only thing we can build are paychecks.
lol!
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