I have no idea how this could have possibly happened ...
Posted on 01/31/2012 2:13:45 PM PST by Zakeet
If anyone is tired of the daily European soap opera with surrealistic tragicomic overtones, they can simply shift their gaze to the 8th largest economy in the world: the insolvent state of California, whose controller just told legislators has just over a month worth of cash left. From the Sacramento Bee: "California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today. The announcement is surprising since lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June." ....uh, oops? But sure, fix the problem of excess debt by more "borrowing" why not. As for the math: "But Chiang said additional cash management solutions are needed because state tax revenues are $2.6 billion less than what Gov. Jerry Brown and state lawmakers assumed in their optimistic budget last year. Meanwhile, Chiang said, the state is spending $2.6 billion more than state leaders planned on." Quick, someone come up with a plan that involves subsidies and tariffs on China, or something else that deflects from what the source of the problem really is. Because the last thing that anyone in America would want to bring up is this thing called "responsibility" for their actions, or, as in now becoming the default case, the lack thereof. And why do that, when time spent so much more productively scapegoating this, and blaming that for one's own massive errors of judgment.
From the Bee:
The Assembly budget committee is considering a bill today that would enable $865 million of borrowing from existing state accounts, Senate Bill 95. Chiang, after consultation with the Department of Finance and state Treasurer Bill Lockyer, is also seeking about $2.4 billion in delayed payments to universities, counties and Medi-Cal, as well as additional borrowing from outside investors.Absent these actions, the state would fall below its prudent $2.5 billion cash cushion on Feb. 29, Chiang estimated. On March 8, the state would actually end up $730 million in the red. The state would be below the safe cash cushion for several weeks ending April 13, save for several days at the end of March.
With such actions, Chiang believes the state would not have to use IOUs or delay tax refunds, maneuvers that have been relied upon in previous years. But Chiang also said that "more cash solutions may be required if our revenues continue to erode or if disbursements significantly exceed estimates."
So 3 years after Lehman filed for bankruptcy, everyone in the world continues to be terminally insolvent, but because everyone is in the same boat, everyone pretends not to notice and the best thing is just to blame Meredith Whitney for telling it like it is, if not getting the timing quite right? But at least the Fed isn't about to print up a tsunami of dollar-equivalent ones and zeros.
I have no idea how this could have possibly happened ...
Governor Brown has announced that citizens of california should not fear, he just promised a chicken for everyone’s pot.
Gee, maybe letting in all those illegals wasn’t such a good idea.
Idiots, Inc.
Here lies the Golden Goose. Killed by democrat/union greed.
That's easy, just raise taxes for the revenue.
That’s the solution! SELL CA to the CHINESE!;)
I hope the state does run out of cash. Run this bad boy off the cliff.
A client of mine was starting a second business in emergency medical transport. He was regulated into oblivion before he even got it started and is no longer interested in opening that business.
I have to believe entrepreneurs look at California and say,”why bother.”
Fantastic. I have a front row seat in Hollywood and deserve to see my state go down like the Titanic.
I’m expecting this to hit the People’s Republic of Illinois any day now.
Here’s to a hard landing.
Jerry Brown is the same as the cruise ship captain.
Who Me to blame?
“I’m expecting this to hit the People’s Republic of Illinois any day now.”
Same here in NJ; we’re being bankrupted by people who retired 30 years ago.
I have a different take. Entrepreneurs I met here in L.A. are mostly Obamaturds. The only thing they care about is their lib politics. And here comes the puzzle: if they are sooooooooo smart..how come they simply cannot comprehend the level of high taxation and govt regulation?
One of the studio execs I spoke with who is a closet Palin (yes, there are plenty but hidden) fan told me they had a plan to buy a small city in S Carolina high on unemployment and turn the surrounding towns into a studio lot that doubles as a town, ergo employing the locals.
The problem was the SAG and industry unions hell-bent on not making that happen, and keep the status quo.
“Governor Brown has announced that citizens of california should not fear, he just promised a chicken for everyone’s pot.”
Er, methinks he promised “pot for everyone’s chicken”.
Many of us Californians have come to the conclusion that the situation is so hopeless and outrageous that the only possible turn-around is a complete failure of the State government.
It has to happen. Not only the governor but the union owned legislature are getting greedier and greedier practicing corruption that only Illinois, New York and New Jersey can match and look at those states.
Not to worry. Jerry has plans to raise taxes that he’s going to convince the voters to go along with in the next election. What could go wrong. /s
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