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California Focus: Optimism as an accounting tool (state could brink on bankruptcy in 18 months)
OC Register ^ | 1/19/07 | Tom McClintock

Posted on 01/19/2007 11:46:43 AM PST by NormsRevenge

According to Gov. Arnold Schwarzenegger, California's financial condition is "fantastic." Spending has been brought under control, the budget has been balanced, and our debt is being paid down. ...

--snip--

... In fact, spending is growing faster than it did under his recalled predecessor, Gray Davis. The state is now running the biggest deficit in its history, and the only way it can pay its bills is because of massive borrowing carried over from 2004, ...

--snip--

The governor justifies his claim that the budget is balanced by concocting a new accounting concept he calls the "net operating deficit."

Here's how it works: To enable his claim that he is paying down debt when it is actually increasing, the governor made some prepayments during the past two years – akin to paying more than the minimum balance on your credit cards. But to hide the deficit he created on the other side of the ledger, he simply doesn't enter those payments in the state's checkbook. ...

--snip--

Meanwhile, borrowing is now completely out of control. When Gov. Schwarzenegger took office, the percentage of the general fund required to make the payments on state bond debt was 3 percent. Since then, that burden has doubled to 6 percent and will exceed 8 percent next year. ...

Ironically, the state's debt-service ratio never exceeded 2.2 percent throughout the 1960s, ... under Gov. Pat Brown.

--snip--

State revenue in 2006 was projected to grow just 1.2 percent, and actual revenue is now falling behind even this modest goal. The governor's 2007 budget is predicated on robust, 7.1 percent growth next year. If the state's economy merely does not deteriorate any further, it will produce a $7.5 billion deficit – placing the state on the brink of insolvency within 18 months.

(Excerpt) Read more at ocregister.com ...


TOPICS: Business/Economy; Culture/Society; Politics/Elections; US: California
KEYWORDS: accounting; bankruptcy; california; mcclintock; optimism
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1 posted on 01/19/2007 11:46:47 AM PST by NormsRevenge
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To: NormsRevenge

"Everything has to be provided to the people" - Rnold Schwartzenkennedy.


2 posted on 01/19/2007 11:47:35 AM PST by NeoCaveman (yabba dabba dhue)
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To: NormsRevenge

BTTT!


3 posted on 01/19/2007 11:48:30 AM PST by PGalt
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To: NormsRevenge

A large percentage of the revenue increase is by a new tax on casino's - a law not yet passed and then deemed Constitutional to tax basically another country (reservation) in your country.


4 posted on 01/19/2007 11:50:44 AM PST by edcoil (Reality doesn't say much - doesn't need too)
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To: All

There's much more to this piece, had to snip the heck out of it.


5 posted on 01/19/2007 11:50:44 AM PST by NormsRevenge (Semper Fi ...... California 2007,, Where's a script re-write guy when ya need 'em?)
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To: edcoil

That's why thousands of more machines have been and will be allowed by and approved for tribes across the state in their casinos.


6 posted on 01/19/2007 11:52:13 AM PST by NormsRevenge (Semper Fi ...... California 2007,, Where's a script re-write guy when ya need 'em?)
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To: NormsRevenge

The entire casino laws are corrupt and unConstitutional. What is we passed a law that only white people could own casino's

If the state has gambling then everyone should be able to get into that business.


7 posted on 01/19/2007 11:54:09 AM PST by edcoil (Reality doesn't say much - doesn't need too)
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To: NeoCaveman
"Everything has to be provided to the people" - Rnold Schwartzenkennedy

He meant the Mexican people.

All 120 million of them.

8 posted on 01/19/2007 11:54:30 AM PST by Regulator (Illiterate Illegals + Socialism = Bankruptcy)
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To: NormsRevenge

Dang I love Tom!


9 posted on 01/19/2007 12:14:32 PM PST by sheana
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To: NormsRevenge

You got the gist of the story. Arnold has been drinking the Kennedy Koolaid at Uncle Teddy's on Martha's Vineyard and now he is a republican in name only.


10 posted on 01/19/2007 12:22:58 PM PST by milwguy
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To: NormsRevenge
Arnold's budget planners:

Image and video hosting by TinyPic

11 posted on 01/19/2007 12:25:51 PM PST by John Jorsett (scam never sleeps)
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To: sheana

Tom's our resident "voice in the wilderness".

Too bad folks didn't or wouldn't get the message.


12 posted on 01/19/2007 12:35:44 PM PST by NormsRevenge (Semper Fi ...... California 2007,, Where's a script re-write guy when ya need 'em?)
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To: NormsRevenge
18 months. And what happens when the banks say NO to more borrowing by deadbeat California? Oh then the fiscal fun and games will begin!

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

13 posted on 01/19/2007 1:00:34 PM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: edcoil

not true. The Indian reservations are not technically part of California.
They are semi-sovereign entities owned by the tribes themselves


14 posted on 01/19/2007 1:03:53 PM PST by ChurtleDawg (kill em all)
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To: goldstategop

Coincidentally, that will be during an election year if things play out as written. I wonder if voters will be paying much attention?

You can only go to the well so many times.. or something like that. ;-)


15 posted on 01/19/2007 1:05:37 PM PST by NormsRevenge (Semper Fi ...... California 2007,, Where's a script re-write guy when ya need 'em?)
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To: John Jorsett

BTW I gave a copy of that to Tom the other day when you posted it.


16 posted on 01/19/2007 1:05:38 PM PST by ElkGroveDan (When toilet paper is a luxury, you have achieved communism.)
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To: goldstategop

Seriously, what does happen when a state goes bankrupt? How would California's bankruptcy effect the national economy?


17 posted on 01/19/2007 1:06:57 PM PST by streetpreacher (What if you're wrong?)
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To: goldstategop

if it was truly that scary, then the US itself would have crashed and burned by now.

we have a far worse debt problem on a national level


18 posted on 01/19/2007 1:07:22 PM PST by ChurtleDawg (kill em all)
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To: streetpreacher
If its an Argentine-style meltdown, it would devastate the shrinking middle class. The Democrats would be the main political victims of such a fallout. I never like to say something bead about my country but sometimes I think we may need the worst to cure people of their infatuation with socialist Nanny State schemes.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

19 posted on 01/19/2007 1:52:31 PM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
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To: ElkGroveDan
BTW I gave a copy of that to Tom the other day when you posted it.

Hey, cool! I love McClintock, and I'm happy to hear that you sent it to him. It's a famous cartoon from The New Yorker, and every time somebody in government builds a plan based on happy thoughts and unrealistic assumptions, I'm reminded of it.

20 posted on 01/19/2007 4:32:24 PM PST by John Jorsett (scam never sleeps)
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To: NormsRevenge; Right Cal Gal; whinecountry; Walkenfree; Rusty0604; FairOpinion; doodlelady; ...
PING!
The full article is worth a read. Sorry for the belated ping.

.

McClintock Ping List.
Please freepmail me if you want on or off this list

21 posted on 01/19/2007 9:01:55 PM PST by calcowgirl ("Liberalism is just Communism sold by the drink." P. J. O'Rourke)
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To: NormsRevenge
Too bad folks didn't or wouldn't get the message.

It seems that they were blinded by Arnold's "star power". I wonder if they're realizing they made a bad decision in electing a faux conservative.

22 posted on 01/19/2007 9:13:16 PM PST by janetgreen (TANCREDO & HUNTER IN 2008)
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To: Regulator
I heard today that there's only 107 million left down there. So that's at least 13 million that made itsnuck up here...
23 posted on 01/19/2007 9:13:31 PM PST by SierraWasp (Just another CA conservative floundering in the darkness of Schwartzeneggerism!!! HELP!!!)
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To: ChurtleDawg
And technically this is a piece of transparent fiction, aka a great whoppping lie.
24 posted on 01/19/2007 9:15:54 PM PST by JasonC
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To: janetgreen

maybe after the NEXT round of borrowing , some will, maybe


25 posted on 01/19/2007 9:17:03 PM PST by NormsRevenge (Semper Fi ...... California 2007,, Where's a script re-write guy when ya need 'em?)
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To: ChurtleDawg; calcowgirl

Hay Churtle! Sovereignty is exactly like virginity!! You can't surrender little pieces of it here and there!!!


26 posted on 01/19/2007 9:17:22 PM PST by SierraWasp (Just another CA conservative floundering in the darkness of Schwartzeneggerism!!! HELP!!!)
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To: SierraWasp; hedgetrimmer
Sovereignty is exactly like virginity!! You can't surrender little pieces of it here and there!!!

Now that is a keeper!

27 posted on 01/19/2007 9:20:55 PM PST by calcowgirl ("Liberalism is just Communism sold by the drink." P. J. O'Rourke)
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To: NormsRevenge; calcowgirl
Tom's our resident "voice in the wilderness".
Too bad folks didn't or wouldn't get the message.

Agreed. Of all our losses last November, that one was the hardest to take.

28 posted on 01/19/2007 9:30:49 PM PST by SmithL (Where are we going? . . . . And why are we in this handbasket????)
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To: calcowgirl
Hey! The dream in America amongst liberals was to make up for the Indian "genocide" by melding them into the American "melting pot!" On of the Marines erecting that flag over Iwo Jima was an Indian!!!

Now, with "diversity" the raging inflamation amongst liberals, the so-called sovereign entities that used to be reservations are rapidly being converted into criminal enterprises completely isolated from the surrounding communities like little cancers that metasticize the wages of the working CA poor in the name of supposed "self-sufficiency" for Indians whose little socialistic empires are getting filthy rich!!!

There have even been gun battles in the Clear Lake region between two of these criminal enterprises completing for the loot of their "oppressors!" What a potent pantload!!! But this is the kind of crappola that Liberals create with their fantasies and foolishness!!!

This is THE one area that I disagree with McClintock, vehemently!!!

29 posted on 01/19/2007 9:38:07 PM PST by SierraWasp (Just another CA conservative floundering in the darkness of Schwartzeneggerism!!! HELP!!!)
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To: SmithL

Yup... That and seeing the parental notification getting shot down..


30 posted on 01/19/2007 9:40:41 PM PST by NormsRevenge (Semper Fi ...... California 2007,, Where's a script re-write guy when ya need 'em?)
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To: calcowgirl

CA should at least have a "Gaming Commission" like NV. Now there's a "box" that Arnold should have created instead of the Sierra-Nevada CONservancy!!!


31 posted on 01/19/2007 9:41:00 PM PST by SierraWasp (Just another CA conservative floundering in the darkness of Schwartzeneggerism!!! HELP!!!)
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..and eminent domain


32 posted on 01/19/2007 9:41:05 PM PST by NormsRevenge (Semper Fi ...... California 2007,, Where's a script re-write guy when ya need 'em?)
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To: SierraWasp
We kinda have one... they just don't do much.
California Gambling Control Commission

Careful what you ask for--they may bring you the SNC Spanking Control Commission.

33 posted on 01/19/2007 9:51:26 PM PST by calcowgirl ("Liberalism is just Communism sold by the drink." P. J. O'Rourke)
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To: NormsRevenge; calcowgirl
state could brink on bankruptcy in 18 months

That right there qualifies him to serve in the Senate...

34 posted on 01/19/2007 9:56:53 PM PST by tubebender ( Everything east of the San Andreas fault will eventually plunge into the Atlantic Ocean...)
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To: calcowgirl
"the SNC Spanking Control Commission"

OMG!!! Now you've gone too far!!! (smirk)

35 posted on 01/19/2007 9:57:55 PM PST by SierraWasp (Just another CA conservative floundering in the darkness of Schwartzeneggerism!!! HELP!!!)
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To: tubebender

I don't know whether to laugh or cry over that one.


36 posted on 01/19/2007 10:02:08 PM PST by calcowgirl ("Liberalism is just Communism sold by the drink." P. J. O'Rourke)
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To: SierraWasp
...reservations are rapidly being converted into criminal enterprises completely isolated from the surrounding communities

I noticed that too.

This is THE one area that I disagree with McClintock, vehemently!!!

I agree with the principle he applied, but disagree in the reality of it. The tribes hooked up with organized crime quite some time ago and it's only getting worse. The state has only helped them grow and done very little to stand in the way of the ever-growing criminal enterprise.

37 posted on 01/19/2007 10:07:10 PM PST by calcowgirl ("Liberalism is just Communism sold by the drink." P. J. O'Rourke)
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To: Regulator
I read in the North County Timnes about two weeks ago that 40% of the medical births are to women who are here illegally. The last figure I saw on total services to illegals was $10 billion per year.

Since illegals are sending billions back to Mexico, it's easy to see why the scale is so out of balance.

38 posted on 01/19/2007 10:16:59 PM PST by carolinalivin
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To: NormsRevenge
I get the distinct impression Tom didn't like being lied to.
39 posted on 01/19/2007 10:33:30 PM PST by Carry_Okie (Islam offers three choices: fight, submit, or die.)
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To: Carry_Okie

He has stayed true to his core principles thru turbulent times. Would that some others could say the same.


40 posted on 01/19/2007 10:35:33 PM PST by NormsRevenge (Semper Fi ...... California 2007,, Where's a script re-write guy when ya need 'em?)
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To: Carry_Okie

.....or sabotaged in the final hour.


41 posted on 01/19/2007 11:23:24 PM PST by Canticle_of_Deborah (The N.O. Mass is like a box of chocolates. You never know what you're gonna get.)
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To: calcowgirl

BTTT


42 posted on 01/20/2007 3:00:34 AM PST by E.G.C.
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To: streetpreacher

Technically, states cannot declare bankruptcy. It didn't stop Orange county back in the 80's however.


43 posted on 01/20/2007 3:33:39 AM PST by Freedom4US (u)
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To: NormsRevenge
Tom's our resident "voice in the wilderness". Too bad folks didn't or wouldn't get the message.

I did--that's why I left.
44 posted on 01/20/2007 3:36:02 AM PST by OCCASparky (Steely-Eyed Killer of the Deep)
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To: streetpreacher
Seriously, what does happen when a state goes bankrupt? How would California's bankruptcy effect the national economy?

You're kidding, right?

California is the WORLD'S 5th largest economy.

45 posted on 01/20/2007 9:22:42 AM PST by Peach (The Clintons pardoned more terrorists than they captured or killed.)
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To: ChurtleDawg

That was my point - they are to themselves so trying to tax them to fund Arnold's folly will be difficult but, try being a white guy and start a casino, the state will say no.


46 posted on 01/20/2007 9:39:56 AM PST by edcoil (Reality doesn't say much - doesn't need too)
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To: Peach

It's actually the 8th according to the latest figures. ;-)


47 posted on 01/20/2007 1:55:00 PM PST by streetpreacher (What if you're wrong?)
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To: calcowgirl

Not optimism, but insanity, and hubris.

What is property in a bankrupt state worth?


48 posted on 01/20/2007 2:36:02 PM PST by editor-surveyor
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To: NormsRevenge
"That's why thousands of more machines have been and will be allowed by and approved for tribes across the state in their casinos."

That won't help without a population increase of, say 10 million?

49 posted on 01/20/2007 2:39:02 PM PST by editor-surveyor
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To: NormsRevenge

Schwartzie likes illegal aliens more than American Citizens. Face it.


50 posted on 01/20/2007 2:40:40 PM PST by BobS
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