Obama to Cali: No Bailout
Hmmm:
WASHINGTON–The Obama administration has turned back pleas for emergency aid from one of the biggest remaining threats to the economy, the state of California.
Top state officials have gone hat in hand to the administration, armed with dire warnings of a fast-approaching “fiscal meltdown” caused by a budget shortfall. Concern has grown inside the White House in recent weeks as California’s fiscal condition has worsened, leading to high-level administration meetings. But federal officials are worried that a bailout of California would set off a cascade of demands from other states.
With an economy larger than Canada’s or Brazil’s, the state is too big to fail, California officials urge.
The state’s warning that it may have to totally eliminate traditional welfare looks a bit more sincere right now.
(begin sarcasm)
I blame Bush. After all:
- He’s the one who has allowed California’s welfare rolls to grow, as a percentage of the population, from 2-1/2 times the national average to almost 3-1/2.
- He’s the one who would refuse to drill for oil off the state’s coast, or probably anywhere else, in the name of the what may be the greatest hoax in human history.
- He’s the one who, excuse the pun, coasted during the 2003-2007 prosperity when he could have hacked away at waste and inefficiency with much less pain.
Oh, I forgot.
(/sarcasm)
It wasn’t Bush. I meant Arnold Scharzenegger, the decade’s biggest disappointment as governor thus far. Not the worst; that goes to IL’s Blagojevich. Not the most clueless, which OH’s Bob Taft totally owns. Not the most treacherous, which goes to Objectively Unfit Mitt Romney hands-down. And not MI’s Jennifer Granholm, whose actions are almost as bad as Arnold’s (but you can’t say she’s a disappointment, because she’s done the dumb things you’d expect of a Democrat).
Given that Ohio’s Kiddie Calculator Corps, er, I mean the state’s Office of Budget Management, run by Pari “in typical …. fashion, (her) answer was confusing” Sabety, has discovered another $2.3 – $3.2 billion-dollar hole in the state’s finances, Obama’s reax should make Team “Turnaround Ohio” Strickland more than a little nervous.
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UPDATE: No, I didn’t miss the POS (Perfectly Obviously Shoddy) claim in the first excerpted sentence that CA’s financial mess is “one of the biggest remaining threats to the economy” — as if there are very few remaining. It’s just that I can’t respond to it without breaking into uncontrollable, rolling on the floor laughter.
See, everything is a “crisis” now. The “crises” moniker is the Dems favorite tool to justify government spending and intervention.
Hey, Cali, fix your own mess and don’t try to drag the rest of us down by hooking us up into your financial foul-ups.
Comment by zf — June 16, 2009 @ 6:09 pm
Budget train wreck imminent…
Committee rejects additional state worker pay cuts
A legislative budget committee on Wednesday rejected Gov. Arnold Schwarzenegger’s proposal to cut state employees’ paychecks by an additional 5 percent, as part of the ongoing effort to balance a badly out-of-whack state budget.
The committee also voted to increase the state’s tax on cigarettes from 87 cents a pack to $2.37, and impose a new tax on oil produced in California.
The governor has made it clear he will veto the tax proposals – and any others included as part of a budget-balancing package.
The 6-4 votes came along strictly partisan lines, with the committee’s majority Democrats voting to squash the governor’s pay cut idea and raise taxes, and Republicans siding with Schwarzenegger on both issues.
http://www.sacbee.com/capitolandcalifornia/story/1953080.html
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NO!, Really????
L.A. County officials offer a novel idea to save millions
Supervisors suggest putting unemployed parents to work caring for their own children as part of proposed changes to CalWorks and other state government aid programs.
http://www.latimes.com/news/local/la-me-calworks17-2009jun17,0,6294929.story
Comment by dscott — June 17, 2009 @ 10:06 am
[...] Protein Wisdom: David Letteman, Intentionalist Bizzyblog (One of our key business pundits): Obama to Cali: No Bailout Possibly related posts: (automatically generated)San Angelo SuspicionsUCLA Makes Lateral Move [...]
Pingback by Off to Richmond, VA! UCLA’s Accidental Diversity! « Temple of Mut — June 17, 2009 @ 1:56 pm
Apparently, Arnold is growing a backbone…of sorts.
…The plan includes about $2 billion in new oil production and cigarette taxes to help bridge the $24 billion budget gap, and a $15-per-vehicle registration fee to finance the state park system…
…The governor reminded reporters at a gathering outside his office that the state budget adopted in February for the fiscal year that starts July 1 included more than $12 billion in tax increases, which he supported.
“To now, four months later, come out with another tax increase is irresponsible,” the Republican governor said…
http://www.sacbee.com/capitolandcalifornia/story/1956231.html
It’s interesting how Democrats choose the short term fix in the face of how self defeating their choice is in the long term. Almost all of these proposed hikes will have the predictable impact of lowering consumption due to price pressure. You can’t repeal the law of supply and demand. The really stupid one is the oil production tax, oil is fungible, talk about a disincentive to produce oil compared to other states!
Comment by dscott — June 18, 2009 @ 11:52 am
Arnold tells Dems to strap on a pair – literally
The Governor Sends Regards
http://www.nytimes.com/2009/06/19/us/19gift.html?ref=us
Mr. Schwarzenegger, whose manly posturing either charms or repels, depending on one’s inclination, was left Thursday explaining his manner of negotiating, after The Los Angeles Times reported that he had sent an oblong, melon-size sculpture of bull testicles to Darrell Steinberg, president pro tem of the Democratic-controlled State Senate.
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Of course liberals in California still don’t get it and are totally clueless as to how they got there.
California crisis solvable
http://www.the-signal.com/news/article/14595/
We need health care, scholarships, AIDS funding, parks and dozens of other vital programs. We realize that all will be cut, but we want all to be cut less.
It is time that the Republicans stop shielding the huge multi-national corporations like oil, tobacco and developers and begin to serve the people and the state of California.
We could solve our budget problems if these corporations were required to pay their fair share.
Comment by dscott — June 19, 2009 @ 9:34 am
#5, That a cute story, but I’d be more impressed if Arnold hadn’t been such a political girlie-man for the past 3-4 years.
Comment by TBlumer — June 19, 2009 @ 9:45 am
Moody’s Joins S.& P. in Warning on California Debt
http://dealbook.blogs.nytimes.com/2009/06/19/moodys-joins-sp-in-warning-on-california-debt/?hp
The California Legislature is deadlocked over the state’s budget, with Republicans refusing to pass a budget that increases taxes and Democrats refusing to make huge cuts in entitlement spending. The state’s budget deficit for 2010 is expected to be a stunning 20 percent of its general fund budget, or more than $20 billion, Moody’s said.
California already has the worst credit rating of any state in the country at A2 on the Moody’s ratings scale, which is only five places above speculative-grade, or junk-bond, status. That means a multinotch downgrade threatens to push the state into or dangerously close to junk status. The further down the credit scale California goes, the higher the state’s cost for financing, which could make it prohibitively expensive to raise cash to finance public works projects.
Comment by dscott — June 20, 2009 @ 2:04 pm
One rational thought:
And in the state prison system, Schwarzenegger banks on saving $182 million by commuting the sentences of 8,500 of the 19,000 illegal immigrant felons and turning them over to federal authorities for deportation.
But prison and finance officials say the governor can unilaterally commute only the sentences of those convicted of a single felony — about 3,000 inmates. Under state law, commutation for the rest would require permission from four justices of the California Supreme Court.
http://www.latimes.com/news/local/la-me-budget24-2009jun24,0,273571.story?page=2
Comment by dscott — June 24, 2009 @ 4:18 pm
Train wreck alert: http://online.wsj.com/article/SB124636651067972935.html
It seems Arnold has grown a spine and is looking to his legacy.
Without a compromise, roughly $3 billion worth of IOUs will be issued in July to everyone from contractors to welfare recipients.
Democratic Assembly Speaker Karen Bass and Mr. Steinberg accused the governor of using last-minute maneuvers to push a laundry list of policy reforms rather than addressing the budget gap.
“It’s not the way to go about working with people,” Mr. Steinberg said. “It’s not the way to go about working with your partner.”
Democrats want to solve the deficit by cutting spending by $11 billion, raising the vehicle license fee by $15 to keep state parks open and increasing taxes on tobacco products and companies that drill for oil.
Gov. Schwarzenegger has proposed more aggressive cuts of $16 billion, including dropping health care for 930,000 low-income children and eliminating the state’s main welfare program. He also would borrow $2 billion from local governments, take $6 billion from other government accounts, accelerate personal and corporate income tax collections, and cut state employee pay by another 5%.
Now what’s a vendor to do if issued an IOU? Would they decide the receivables are simply not worth the false promise of business with no profit and stop doing business with CA? I guess filing a claim in Court against would be a useless proposition? Will these IOUs come with interest? At what rate?
Comment by dscott — June 30, 2009 @ 3:16 pm