Posted on 05/24/2009 4:58:17 PM PDT by neverdem
CALIFORNIA FINDS itself in more than a bit of a bind: Facing at least a $21 billion budget deficit, the state could run out of money in a matter of weeks. Borrowing to help fill the hole will be challenging and expensive, given that California has the lowest credit rating of all 50 states. Last week's warning by Standard and Poor's to Britain about a possible debt downgrade will make risky government borrowing even more difficult. The state would like to see Uncle Sam pick up part of the tab; but as steeped in the bailout business as the feds have become, there are strong reasons for them to refuse to add California to the list of recipients.
This is a budget crisis that has been a long time coming. The requirement of a two-thirds vote in the legislature to raise taxes or pass a budget has exacerbated partisanship and made sensible budgeting impossible. The initiative process -- which too often allows politicians to turn the hard decisions over to voters who, surprise, aren't always willing to make them -- results in a crazy-quilt fiscal scheme whose ever-changing priorities leave it underfunded and inherently unstable. When they do make decisions, legislators have routinely elevated the interests of public employees unions over the broader interests of the state, producing crushing costs from high salaries and benefits. Temporary measures and gimmicks have been...
--snip--
Bailing out the banks was defensible because of the critical and central role they play in the economy. Bailing out the auto companies may have made sense in order to save jobs -- though now that the government is heading for long-term ownership, we are beginning to doubt the worth of that policy. Bailing out the states would be an even more perilous road to start down.
(Excerpt) Read more at washingtonpost.com ...
IT’S ABOUT THE SPENDING!
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Reckless spending and borrowing has made sensible budgeting impossible.
"Spend less than revenues" is a pretty basic concept that these liberals can't seem to grasp.
This was a nice surprise in WaPo. Congratulations on last week’s votes!
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
If the first state to go under had a democrat governor, they'd probably have an "excuse they believe" to back up their call for federal money. If CA goes under "jobs will be lost" just like the jobs that would have been lost in Detroit. But Detroit's dem country...
Was there a Conservative coup at the Washington Post this morning? Or, did somebody at The Post who is paying taxes actually wake up and smell out-of-control fires of burning money?
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
This, I think, would be their only leg to stand on when requesting $$$ from the Feds.
Outside of that, they have no standing.
On any issue we look at, it all leads to the conclusion that our represenatives are entirely corrupted.
From the bribes to force MTBE on us, then later to force ethanol "fuels" on us, to the regulation of Cheerios by the FDA, no matter what the area, they all lead to the same place. If we do not see a major dose of Worm Medicine in the mid-terms and thereafter, we are lost.
Sending the Feds “the problem” (asking for a bailout of CA) is like a claw back — of taxes from fleeing former CA tax-base money, gone to other US states.
So much for Federalism. We’re all national socialists now...
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Why shift the problem to the OTHER states? Our state (CA) has NO BACKBONE. They should ask the Feds to CLOSE the border. But maybe they’re all socialists who WANT to bankrupt the nation.
I vote the latter explanation.
4L,
in the SF Valley CA
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Bailout for Chrysler merely delayed the inevitable.
Bailout for GM/GMAC is merely delaying the inevitable.
Billions of of our dollars down these rat holes.
I say, not one penny for CA. This “crisis” has been building for 20 years. If, in that time, no one has had to cojones to do what is needed, let ‘em twist.
“Bailing out the banks was defensible because of the critical and central role they play in the economy. Bailing out the auto companies may have made sense...”
Uh, no. Bailing out the banks is not defensible. There is simply no compelling Constitutional argument that supports this ridiculous, dangerous corporate socialism. Our legal system has mechanisms for dealing with bankrupt businesses. Same thing applies to the auto companies, and ANY OTHER business entity in the US.
Additionally, there is no valid, acceptable reason for the Federal government to ‘bail out’ California or ANY OTHER state in this union.
0bama and his cronies have looted the wealth of generations yet unborn to pay for the profligate ways of today’s ‘leaders’, charlatans who have fleeced the electorate with promises of everything to everyone all the time. There is a price to be paid for this indecency, and it won’t be pretty.
It’s time to take back the country.
If Calif. will really run out of money and collapse, I think Obama will find a way to bail out the state. Maybe the feds will guarantee Calif. bonds so they can borrow their way out of this mess? Who knows? Calif. is an important state politically, with 55 Democrat electoral votes.
When the governor and legislators talk about balancing the state budget, they're talking about closing the gap between revenues and required expenditures, either by increasing the former or reducing the latter. The task becomes more difficult by the minute.
Looming on the not-too-distant horizon, however, are some other huge obligations that the current crop of elected officeholders has chosen to ignore, because acknowledging them would make closing the chronic budget gap just that much harder.
There is, for example, a potentially huge increase in the "contribution" that the state must make to the California Public Employees' Retirement System to cover public pensions.
CalPERS has seen its once-immense investment portfolio shrink dramatically, due to recession and some truly boneheaded investments, such as a $1 billion haircut on raw land in Southern California. Big increases in pension benefits, enacted a decade ago, are also a factor.
CalPERS won't tell the state how much its boost will be until sometime next year, but it could be hefty, unless CalPERS postpones the pain by stretching out the bite over several years – which would merely postpone the pain. An even bigger headache is a new requirement that state and local governments identify and quantify their obligations for providing health care to their retired employees. The state auditor's office and an advisory commission told the state two years ago that its unfunded liability for health care is $48 billion.
State officials were advised to commit $3.73 billion during the current fiscal year to begin shrinking the unfunded liability, but the state is paying just $1.36 billion to cover its current costs. The Legislature, under the sway of unions, rejected Gov. Arnold Schwarzenegger's plan to overhaul employee health care to save money, but he's trying again, seeking to increase the amount of time it takes...(Excerpt) Read more at sacbee.com ...
I don’t think California has a case for a bailout even on the grounds of their large illegal population. California’s illegal immigrant problem is largely of their own making. They’ve done everything short of building a bullet train to Mexico City to welcome all those future Democrat voters into the state.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.