HEY, I KNOW! LET'S SPEND A COUPLE OF BILLION ON HIGH-SPEED RAIL! THAT'LL FIX EVERYTHING!
Posted on 04/02/2013 7:42:28 AM PDT by outpostinmass2
Were California's state government a business, it would be a candidate for insolvency with a negative net worth of $127.2 billion, according to an annual financial report issued by State Auditor Elaine Howle and the Bureau of State Audits. The report, which covers the fiscal year ending June 30, 2012, says that the state's negative status -- all of its assets minus all of its liabilities -- increased that year, largely because it spent more than it received in revenue. During the 2011-12 fiscal year, the state's general fund spent $1.7 billion more than it received in revenues and wound up with an accumulated deficit of just under $23 billion from several years of red ink. Gov. Jerry Brown has referred to that and other budget gaps, mostly money owed to schools, as a "wall of debt" totaling more than $30 billion. Last November, voters passed an increase in sales and income taxes that Brown says will balance the state's operating budget and allow the debt wall to be gradually dismantled. About half of the $127.2 billion in accumulated red ink came from the state's issuing general obligation bonds and then giving the money to local governments and school districts for public works projects, the auditor pointed out. The assets built with the bonds remain on local balance sheets while the bonded debt accrues to the state.
(Excerpt) Read more at blogs.sacbee.com ...
No reason to think any deeper than that when your goal is accomplished - feeling good about yourself as being a good person because you advocate that “something be done” to “help people”.
NO it isn’t. Not for recreational use.
Drill, Baby, Drill! It would solve a myriad of issues, but it will also be a cold day in Gov Brown’s office before they allow more drilling & fracking.
Ah, well that would bump it up to about 500 or so per year per person at 5 per.
So while not quite insolvent, well down the road. About 1 percent of everyone’s income in the state now going to debt repayment - after assets are taken into account.
If California adds about 5 billion in debt a year - that would add about 166 dollars per person per year total debt and about 8.3 dollars in interest per person per year. To hit insolvency (which would be where the interest exceeds disposable income), they would hit it in about 100 years - when the interest would be about 10 percent of what the state earns in total at 5 percent.
So default is unlikely to happen at present.
Bull, anyone can get a prescription for Pot from a doctor.
How many people are left paying taxes in California? 40% tops? I would double your numbers. And California is doing nothing to stem the tide of future Calper’s and welfare cases. I put the number of years at 10.
“The assets built with the bonds remain on local balance sheets while the bonded debt accrues to the state.”
But the cities and towns send money to the state to help service that debt. The state can (generally) borrow cheaper so that’s one reason it’s done that way.
If interest rates go-up to 20% along with inflation your numbers are way off. You are assuming low interest rates and steady inflation is here forever.
Well, unless interest rates increase or there is a further deterioration in California’s finances, that’s just not going to happen, sorry.
Yes, California’s in terrible shape, but they are not quite insolvent. There is still time for California to get their stuff together and reverse things.
California’s like a business that’s in the red every month, owes more than it’s worth but they aren’t bleeding fast enough for interest rates to exceed revenue for quite some time. If California can take in 20 percent of the total income in California, then right now - their interest rates are still only about 5 percent of their revenues. Concerning, yes, but not insolvent.
Inflation helps their balance sheet, by paying back debt with cheaper dollars than the ones you borrowed.
Interest rates, yes. Interest rates will rise with default rates - but I don’t see California as seriously at risk for default at present.
HEY, I KNOW! LET'S SPEND A COUPLE OF BILLION ON HIGH-SPEED RAIL! THAT'LL FIX EVERYTHING!
If I’m taking per capita income at 40k, then debt is per capita debt and interest.
Cities are going bankrupt in California. See Stockton. Interest rates will go up, history dictates that it will happen. They are in about the same shape as GM was circa 2006. High inflation and interest rate hikes is all it would take to sink California.
That won't help libtards. They will just increase government spending as soon as that happens. Then, they will be back in the same boat.This is because libtards are stuck on stupid and never learn from their mistakes.
That money was well spent. Look at all the Democrats that were elected.
The balance of per capita in California is on the take and will never help to repay the debt. See Greece.
High inflation will hurt the taxpayers and in turn the state will collect lower taxes.
California is at risk for default since as all the major cities are essentially bankrupt or have declared bankruptcy (Stockton).
They need do a Cyprus on the bank accounts of the Hollyweird glitterati.
OK, I would like to purchase California ... send me a check for $127.2 billion and show me where to sign.
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