Posted on 12/05/2008 1:44:01 PM PST by NormsRevenge
SAN FRANCISCO (Reuters) – California is on track to run out of cash in February or March and faces a $15 billion cash shortage by the end of its fiscal year in June unless officials plug an $11.2 billion budget gap, according to the state's budget director.
Additionally, if Gov. Arnold Schwarzenegger and lawmakers fail to close the current fiscal year's budget shortfall soon, California, the most populous U.S. state, may in March delay payments to its vendors or hand them notes promising payment, according to a December 1 letter to top lawmakers from the director of the Department of Finance, Michael Genest.
A copy of the letter was obtained on Friday by Reuters.
"Specifically, it now appears certain that available cash reserves from all sources will fall below the cash cushion target of $2.5 billion in February and that the state will begin delaying payments or paying in registered warrants in March," Genest said in his letter.
"To reduce this threat, the administration is also proposing legislation to increase internal borrowable cash resources," Genest added. "However, even with this cash solution the state will not be able to pay all of its bills in the absence of quick action on the budgetary solutions."
The last time California, the world's eighth biggest economy and the largest issuer of U.S. public debt, issued payment promises to vendors was in the early 1990s.
(Excerpt) Read more at news.yahoo.com ...
Running out of money? Why not print their own? Some place in the US has but just for local use ...
VIVA Cali-mexifornia, here we come!
Quick, raise taxes. Chase even more businesses out of the state. Idiots.
How about cutting the damned budget you morons?
It has been noted here by wiser heads than me that a collapse of State Governments may be the ONLY WAY to destroy the liberal welfare state. As Edmund Burke observed " The revenue of the State IS the State".
We may be witnessing a sea change similar to the old USSR when the old system just couldn't sustain itself anymore
Maybe BO will turn out to be an American Gorbachev...trying to save a dying system and failing
The question is...what should the true Conservative, lover of limited government be advocating right now.....maybe the death of bloated big government is at hand?...should we really try to stop it?
China is not that stupid to buy S.F.; however, France kinda some to mind as a potential buyer.
California, General Motors, Fannie Mae, Freddy Mac, ... long term, I won’t miss any of ‘em. Let ‘em go. Like Peter Schiff sez, rehab might be rough, but it’s better than just buying more drugs.
As a friend of mine used to say "California is the turkey state, there is a gobbler behind every palm tree".
Question,,, SO WHAT? If all state services stopped except police/DOT in my state today, I would not be affected. Would you?
The two biggest sources of income for California is income taxes and sales taxes. Both of these will be going down severely this year, and for a few years, because of the real estate crash, and the recession. They can raise taxes, but it probably won't bring in the cash, as people are already only buying necessities.
They need to cut spending by a large amount, with as little job loss as possible though. They can also sell off assets like buildings and schools.
Not in the least but all those bureaucrats shaking coffee cups on the street would set up quite a racket.
"Chonny and Wooty, you two losers bettah make udder plans.
I gotda funny feeling the Republican Potty tinks you guys are pure crapola."
"Me, I'll kiss anybody's tookus so's I can git federal tax dollahs to bailout
bankrupt Kaliforneeah."
Then sell San Francisco to China to pay off the debt.
_______________________
China has already nixed that idea, saying the San Franciscans are just too radical
The Golden Goose has become a made in China Tin Goose.
No, I'm not kidding.
A mere year or so later, a far left group in SF was demanding to have SF secede from California. The whole state thought it would be a good idea, and agreed with the radical leftist spokesperson suggesting this idea. The SF leadership hammered the tongue of the person and group proposing such a thing. As certainly, SF can not survive on its own -- it demands subsidies from taxpayers throughout CA.
LOL! But drat, the sound would drown-out the perpetual drum-beaters and that would be *racist* (cue up Dracula face with fangs).
Understandable. And let's accept that it's not a lie, in order to hasten a bail-out.
And now we must ask "Would this be a bad thing?"
For state employees, who wouldn't get their paycheck, certainly! But, in itself, would that be a bad thing?
For municipalities, who are subsidized by state taxes, certainly! But, as above, would that be a bad thing?
For vendors, who do business with the state, absolutely! And it would definitely be a bad thing, because they have incurred real costs in providing the state with goods or services.
But, for the citizens of California, who pay taxes to the state and endure its regulations, the state's going broke would conceivably provide a political trauma that may well have beneficial side effects.
Like an intrusion of reality. For example, a recognition by thge state's voters that the state's legislature is both corrupt and incompetent. And that the political philosophies which have ruled the state for a generation are utterly bankrupt.
The state's politicians will be incapable of coming to this same conclusion, so it is totally up to the voters.
The one thing that props up "The State Inc." is the ability to raise revenue from it's "customers" through coercive means..known as "taxes". A private business that really does deliver needed and desired goods and services can never do that. A private business is always being lashed with the whip of competition. Not so with the "State Inc."
As I said in a post above, quoting Burke, the revenue of the state IS the state. We must bleed the State Inc. of it's revenue and start over. Somehow, someway we must create another way for the community of individuals and families to work collectively toward common goals without the onerous and self serving mechanism of the "State". That answer is above my pay grade but it needs to be addressed.
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