California Aid Request Spurned By U.S.

Washington Post ^ | June 16, 2009 | David Cho, Brady Dennis and Karl Vick

[Lorianne]

The Obama administration has turned back pleas for emergency aid from one of the biggest remaining threats to the economy -- the state of California.

Top state officials have gone hat in hand to the administration, armed with dire warnings of a fast-approaching "fiscal meltdown" caused by a budget shortfall. Concern has grown inside the White House in recent weeks as California's fiscal condition has worsened, leading to high-level administration meetings. But federal officials are worried that a bailout of California would set off a cascade of demands from other states.

With an economy larger than Canada's or Brazil's, the state is too big to fail, California officials urge.

"This matters for the U.S., not just for California," said U.S. Rep. Zoe Lofgren, who chairs the state's Democratic congressional delegation. "I can't speak for the president, but when you've got the 8th biggest economy in the world sitting as one of your 50 states, it's hard to see how the country recovers if that state does not."

The administration is worried that California will enact massive cuts to close its deficit, estimated at $24 billion for the fiscal year that begins July 1, aggravating the state's recession and further dragging down the national economy.

After a series of meetings, Treasury Secretary Timothy F. Geithner, top White House economists Lawrence Summers and Christina Romer, and other senior officials have decided that California could hold on a little longer and should get its budget in order rather than rely on a federal bailout.

[wiggen]

since you don’t seem to actually read-i am saying,pay attention now,that govt spending is NOT stimulative. N O T.

[Fredgoblu]

My apologies, Wiggen. Your first comments were slanted toward government sympathy, so I didn't read your post as a whole.

The bottom line is that real people will be hurt by the excess spending that California has wrought to date. The only way out of their hole is to stop digging/spending. There will be pain. But more government spending (by the other 49 states) isn't the answer...as you point out.

[wiggen]

ty kindly. one problem with california melting down financially is that there are many major states(economically) not too far behind with the same issues that brought down the auto makers. I think thats the reason cal. was told no. it has the potential to get extremely ugly.

[Windflier]

Don't get mad at me for not being able to parse your actual meaning out of what you posted. If you meant one thing, then you ought to have said that, and not something that indicates the opposite.

Here's your post:

spending is stimulus. say you close a day care center. free day care,ok? employees fired-they don’t spend. a few fammilies might not be able to afford pay care so one might quit a job.

i’m not saying this is a bad thing mind you. they need to melt down and get their house in order.but yea,cuts will be a drag n the economy.(some programs you can be sure spend more than they generate. most probably,but still will slow the economy at first.)