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 ...
You would be buying the Government of California. Have fun...
That requires going through a doctor to get a prescription which in itself keeps many from using it (thus reducing the potential tax revenue for the state). It really is not legal for recreational use in Ca.
No problem. Raise taxes again.
You know it’s coming.
The state will bail them out...who will bail out the state?
What about that clean air Californians are breathing? It oughta be worth something as a privilege, right?
That's the beauty of it ...
I can afford to hire Donald Trump ... just to tell each one of them ... "You're fired" ...
???
Surf’s up!
The problem is you still have to pay them for the rest of the their lives and their replacements as well.
Well, sure, which is why it’s ceteris paribus. ;) Also, their present deficit is 15 billion, not 5. Which means that at their present rate you’re looking at about 30 years. Ceteris Paribus.
Their problem is interest compounding in reverse - as they pile up more debt, the rate of increase in their interest cost will increase.
They have to cut at least 10 billion to slow the bleeding to a semi-sustainable rate.
Since when do employees that are fired keep getting a paycheck? They ... get ... nothing.
Is this an academic argument?
Yes, I agree with you. California could, in theory, reverse course and recover. But they won't, so it's a moot question.
You're not seriously trying to argue that they will change course, get their act together, cut spending, and rein in their union employee pension and health care costs, are you? As long as they can kick the can down the road one more time, they will do so.
Ceteris Paribus (there’s that word again), they’ll be insolvent in 30 years. ;)
No, I’m not arguing they will change their course. I’m arguing what will happen if they continue on their present course and assuming their behaviour will remain the same.
Apparently that’s what the term “all else being equal” means.
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