If Jerry Brown becomes governor, California will fall into the economic abyss at an increasing rate. I expect California will be utterly bankrupt within two years with Jerry Brown and he will be begging for a federal bailout.
“If Jerry Brown becomes governor, California will fall into the economic abyss at an increasing rate. I expect California will be utterly bankrupt within two years with Jerry Brown and he will be begging for a federal bailout.”
California and most other states have already received large bailouts. The federal government has loaned most states unemployment compensation. In addition, stimulus spending has boosted state budgets in Medicaid and education. However, now the reverse effect will magnify state budget problems. The DC rats have dropped many entitlement bombs on the states. Most stimulus spending cam with conditions involving more state spending. The health care bill in particular has onerous unfunded mandates on Medicaid funding and other subsidies.
The question is which state will be the tipping point for another Sept 08' - Econ Collapse?
NY? CA ? or MI? as "Porkulus" money balancing the budgets goes away?
Will it be their Union Pension Liabilities and the new FASB rules associated with it ( Look for the post here from "RedState" it was a dilly )?
If the GOP takes the house and senate, can you imagine the chaos at the stand off as these states fall in to Chapter 11? Can you see Obama trying to do an end-around via treasury and float them money? Can you say Constitutional Crisis?