Posted on 04/25/2002 3:22:19 AM PDT by snopercod
Edited on 07/19/2004 2:10:00 PM PDT by Jim Robinson. [history]
Sacramento, California, April 24 (Bloomberg) -- California must sell as much as a record $7.5 billion in short-term debt to pay its bills in June and July, the state controller said.
The sale, which would surpass the record $5.7 billion worth of tax-exempt notes California sold last year, may be offered as soon as June, Controller Kathleen Connell said at a Sacramento, California, press conference. Governor Gray Davis must approve the sale, she said.
(Excerpt) Read more at quote.bloomberg.com ...
Governor Davis vows no tax increase.
. . . .this election year.
``The last thing I want to do is have the state in a panic because we didn't think ahead,'' Connell said.
Too late.
Eddie01 "the obvious is so hard for some"
80 billion ? how much is that per person?
I say send the bill to mexico...
Well, you don't really erase a deficit by borrowing, but if he can get the rest of us to kick in some money...
Too late dufious! Mark up another failure for socialism!
What you see happening in Kalifornia now, is what you are going to see in 2008 when Medicare enters permanent negative cash flow, and in spades when Social Security enters permanent negative cash flow in 2012. Who will buy the bonds of a government who will never ever be able to repay and will progressively be needing to borrow more each and every year forever? There is not enough resources in the United States to pay the unfunded liabilities of Medicare and Social Security. The US will default on some of the unfunded liabilities (cut promised benefits to beneficiaries who will be the baby boom generation that doesn't take no for an answer), raise taxes to pay for some of the shortfall (cutting the income of their own children and grand children depriving them of a secure retirement-what would you tell your own spendthrift profligate parent or grandparent-would you cough up or tell them to get a job), this will be when the chimes for midnight of the US will begin to chime. There will be no presidential election in 2016 because the clock will have run out before the elections can be held. Can anything be done to head this off? Maybe.
Well, you were right Revenue Anticipation Warrants (IOU's) is is! To heck with BAN's, go for the RAW's. Good call on your part. Thanks for the heads up on this.
The $7.5 billion estimate assumes that state lawmakers will pass a budget on time and permit the sale of bonds to cover the costs of power the state bought during last year's energy crisis, Connell said. She recommended Davis authorize $3.5 billion of additional warrants in case budget negotiations stall or the energy bonds are delayed. State Treasurer Philip Angelides said yesterday that the $11.1 billion worth of power bonds may be offered by September.
Let's see if we can follow this:
1)State Legislature passes budget on time - NOPE
2)State Legislature to identify and pass laws that revenue stream associated with power will pay off RAWS before sale in June - NOPE
3)Democrats running for re-election come up with plan to balance budget without raising taxes, as Gov has promised. And that plan is fiscally sound enough for Investment rating agencies to not change state bond rating to junk. --Should be fun to watch
4)Sell RAWS in early June to pay bills of state
This is better than the serial "cliff hanger" movies I use to watch as a kid during the summer at the local theater!
Specifically, the key to your assumption is that there is a demographic curve in the US that can not be changed and that the demographic curve pre-determines the amounts of people "not working and taking current level payments" and that those working will be responsible to pay all the bills. Another assumption is that current costs escalated for inflation over time and adjusted by numbers in the future age group are a good predictor of future costs.
Between now and then, I think that the US will reduce the Social Security benefits and try to find a way to reduce the increase in Medicare cost. I also expect that the US will encourage a "brain drain" from the rest of the world and change the US imigration policy to significantly modify the the demographic curve (i.e. if you are a 25 to 30 year old doctor or professional with a large family of small kids you are welcome to come to the US and get expedited citizenship, if you are over 50-forget it!) of who is paying for what. When faced with a problem of this magnatude, I suspect that politicians of all parties, will figure out creative ways to change things.
Another outcome, which I find very frightening will be the enouragement of doctor assisted suicide. If you look at typical medical care costs, they get higher when a person gets older, but they skyrocket when that person needs constaint nursing home care and/or hospitalization at the end of life. I think that there is likely to be a change in the last weeks/months of life medical ritual that has developed over the last 30 years in the US. I don't see the Government paying the bill for people to die in a hospital in the future, I think folks will be "encouraged" to die at home. How the "enouragement" occurs and how they "die" is the part that scares me.
You folks in California are crazy if you keep this guy! This does not even pass my 9 year old's sanity test. I would recommend that you guys get together and require every member of the legislator and top executives to pass an economics 101 class.
The saddest thing about this is that average sheeple do not realize that their taxpayer dollars are going to bailout that socialist hellhole of a state and should be outraged and demand financial accountability of public officials!
And last but not least, these programs are an abomination that should be eliminated from the face of the earth and should never have occured in the first place. Especially not in the USA. There is no Constitutional authority for either.
Inflation is always the political solution of choice. That's how the U.S. paid for the Vietnam war and the "Great Society" at the same time. IMHO, that's also how this recent "war on terrorism" will be paid for.
In addition, I think the SS/Medicare ponzi scheme will be "paid for" the same way. We can only hope that we don't have to go through what the Germans of the Weimar Republic did in the 1920s...
Question: how will this be enforced to let only the "right" types in, considering that we have a border that leaks like a sieve?
You have been frighteningly correct in some of your projections. I was so pleased the Regan removed inflation from the nation's economy, I just hope it does not return to the degree it has in the past. You do have a point though.
Just to let some of the natives hear about this!
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