Isn't California entertaining to watch?

[Richard]

http://www.sacbee.com/830/story/2025924.html


Let us see.  Credit rating BBB, check.  Banks refusing to honour IOUs, check.  California relying heavily on bonds for NORMAL operations, check.  California budget insane, check.


This should be very exciting.  I hope someone puts up some live feeds the day the hospitals, police, school teachers, and other public "servants" stop getting paid.  It should be a most exciting time.  Pass the ammo.

[Richard]

Oh and lets throw in that although California may issue you an IOU in lieu of payment (well, that is debatable, but that is what they are doing), it is ILLEGAL for you to pay your employees with those IOUs or to send the IOUs in to the IRS as a withholding payment.  So this is abso-fracking-lutely fantastic for cash flows of companies that provide services and products to the Great State of California.

And now that the SEC declared those IOUs securities, it means you now have compelling proof you were paid with a bond and not in cash, and unless you agreed to it, it does not have to legally settle a debt.  The lawyers win!!

[Sewer]

I live in California.

So is not entertaining to watch.

[○∙◄☻¥tπ[╪AV┼cVê└]

No, the ineptitude of those running the state, particularly Arnold is not entertaining to watch.

[Marokai Backbeat]

The fact that the federal government is just standing by watching this happen during one of the worst recessions ever is maddening.

[Alexander Hamilton]

No, the ineptitude of those running the state, particularly Arnold is not entertaining to watch.

I wish he'd just do as Pawlenty has. the legislature!

[Sewer]

The fact that the federal government is just standing by watching this happen during one of the worst recessions ever is maddening.

yes and saddening.

[Magic 8-Ball]

Not particularly, no.

[dead0man]

The people of California made this bed by screwing with their property taxes and increasing the govt spending without coming up with ways to pay for them, why should the rest of the country pay for that if you guys refuse?

[Sewer]

The people of California made this

you are a dick                                   you are a dick

[Nhoj]

The people of California made this

you are a dick                                   you are a dick

How is it wrong? it might not have been the current generation that caused the problems, but California's retarded propositions helped it get into the mess its in,

[jokerman]

The idiocy of Proposition 13 coming to fruit is a beautiful sight.

[Torie]

The people of California made this bed by screwing with their property taxes and increasing the govt spending without coming up with ways to pay for them, why should the rest of the country pay for that if you guys refuse?

Because we have 50 plus electoral votes and Congresscritters?  

[Хahar 🤔]

California voters are evil.

[Torie]

The idiocy of Proposition 13 coming to fruit is a beautiful sight.

Prop 13 was ludicrous, even though over time it has hugely benefited me financially, but given the high real estate values in Cali (and that is still the case relatively speaking), it is not the lack of property tax revenues which has led to insolvency. Indeed, I think Cali is in the top 5 in per capita taxes raised among the states.  We have a very high income tax, where you hit the max rate of 9.6% at about 50K or so (10.6% actually if you earn over a million in taxable income in a year), high sales taxes, along with high property values, which even with Prop 13 generate handsome revenue. Prop 13 was ludicrous because folks owning homes or commercial property of similar value can pay tax amounts that can vary by as much as a factor of 5.  If I sold one of the properties I bought in 1979, the new owner would indeed pay property taxes about 5 times as high as I am paying. That is at once unjust and well, simply insane really.

[dead0man]

The people of California made this

you are a dick                                   you are a dick

Sure.  Not as big of a dick as the people of Cali that vote against fixing the tax problem and then bitch about the state having no money though.  Those guys make me look like a hero.

[Lunar]

We did make this.

Torie, Prop 13 created more problems than just the ability to raise money via property taxes.  It also made it impossible to pass a common-sense budget and forced a cycle of constant housing development in order to get property sold with the latest tax rates, underfunded schools in areas like cities that cannot support constant development, etc.

Other props, mandating that such and such percent go to this or that are also screwing the state over. 

[Lunar]

I should add that "bailing out" California should not be remotely on the table unless enough strings are attached that it looks like IMF money to a developing country with poor institutions and then some. Massive restructuring is required, and writing CA a check alone won't help us.

[○∙◄☻¥tπ[╪AV┼cVê└]

The fact that the federal government is just standing by watching this happen during one of the worst recessions ever is maddening.

California isn't too big to fail, which is code for "didn't bribe enough politicians".

[Torie]

We did make this.

Torie, Prop 13 created more problems than just the ability to raise money via property taxes.  It also made it impossible to pass a common-sense budget and forced a cycle of constant housing development in order to get property sold with the latest tax rates, underfunded schools in areas like cities that cannot support constant development, etc.

Other props, mandating that such and such percent go to this or that are also screwing the state over. 

Interesting comment, which I would like to pursue further with you Lunar. But at the moment, I'm wasted, and it's time to decamp from the puter.

[Marokai Backbeat]

I should add that "bailing out" California should not be remotely on the table unless enough strings are attached that it looks like IMF money to a developing country with poor institutions and then some. Massive restructuring is required, and writing CA a check alone won't help us.

I would agree with you under normal circumstances, but we're talking about the largest state in the United States population wise, almost 37 million people. In a recession like we're in, sitting back and allowing a state to collapse under it's own weight, regardless of what the causes are, is economic suicide and not only would make everything worse, but may very well erase any benefits we're seeing from federal spending already. We simply can't ignore the fact that we have 37 million people who almost have their government being completely shut down.

[Хahar 🤔]

I should add that "bailing out" California should not be remotely on the table unless enough strings are attached that it looks like IMF money to a developing country with poor institutions and then some. Massive restructuring is required, and writing CA a check alone won't help us.

I would agree with you under normal circumstances, but we're talking about the largest state in the United States population wise, almost 37 million people. In a recession like we're in, sitting back and allowing a state to collapse under it's own weight, regardless of what the causes are, is economic suicide and not only would make everything worse, but may very well erase any benefits we're seeing from federal spending already. We simply can't ignore the fact that we have 37 million people who almost have their government being completely shut down.

Well, it's not as if it isn't those 37 million people's fault.

[Brittain33]

Well, it's not as if it isn't those 37 million people's fault.

How were any of those people, as individuals, supposed to avert the current crisis?

[Хahar 🤔]

Well, it's not as if it isn't those 37 million people's fault.

How were any of those people, as individuals, supposed to avert the current crisis?

They could have easily done so collectively.

But there are a number of legislators who could have probably averted this.

[Sbane]

I should add that "bailing out" California should not be remotely on the table unless enough strings are attached that it looks like IMF money to a developing country with poor institutions and then some. Massive restructuring is required, and writing CA a check alone won't help us.

I would agree with you under normal circumstances, but we're talking about the largest state in the United States population wise, almost 37 million people. In a recession like we're in, sitting back and allowing a state to collapse under it's own weight, regardless of what the causes are, is economic suicide and not only would make everything worse, but may very well erase any benefits we're seeing from federal spending already. We simply can't ignore the fact that we have 37 million people who almost have their government being completely shut down.

Throwing money at California won't help in the long run if we don't fix our property taxation system, ballot initiatives and the number of votes that are needed to pass a budget. If the federal government can somehow force us to do this in return for money, I would be eternally grateful.