First AIG, now California ...

http://www.latimes.com/business/la-fi-calif3-2008oct03,0,5726760.story

SACRAMENTO -- California Gov. Arnold Schwarzenegger, alarmed by the ongoing national financial crisis, warned Treasury Secretary Henry M. Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the federal government within weeks.

The warning comes as California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent.

 

Since it's well proven Californians send $50 billion + more to the Federal government then it gets back in services, maybe Cali should just keep its money!

 

I don't understand exactly?
Why does Cali. need the money?
They rely on short-term loans as a routine?
What is wrong with this picture?

 

Our state is bankrupt. We keep going thru accounting hocus-pocus like borrowing from next quarters' tax receipts... and, I shit you not, floating loans based on future lottery proceeds.

The state is broke even though we have one of the highest state income tax rates, highest gas taxes, and highest sales taxes in the country.

And these are the "good times" - wait until next year's budget.

Our country is bankrupt. Insolvent. Whatever word you want to use. I keep saying it, and people keep arguing with me. And every day, it becomes more and more clear.

 

That's the whole gist of the credit crisis. There's a gap between when you send out the bills and when you collect the money. So you take out a short-term loan to get you buy, and pay it back when the collections come in. That's why there's so much talk of business failures if the credit market dries up, because if banks aren't lending to anybody, then no one gets the capital they need to conduct business.

 

And by anybody, he means the likes of GE, AT&T, etc. If they can't get credit, God help any of us.

Watch for student loans to be the next sinkhole that opens up.

 

UPDATE-1stADD: Governator institutes hiring freeze, payroll cuts; also vetoes Democratic package of spending cuts and tax increases designed to alleviate some of the problems. State agencies must reduce payroll by 10 percent, employees must take two days off a month without pay. State will run out of money in February, according to state officials.

http://www.huffingtonpost.com/2008/12/19/schwarzenegger-orders-hir_n_152513.html

 

Um ... what? I'm no economist, but that doesn't quite add up. Could the Legislature not start with the package it voted upon and build upon it?

 

Fuzzy math

 

California can't even afford a razor? Damn, they are broke.

 

Donner Party is making a comeback.. mark my words.