California State Bankruptcy Looms

UPDATED POST 1/23/11: Congress to Consider State Bankruptcy

The nations largest economy state is about to go bust. California is facing a $41 Billion dollar deficit and the cuts already made are not enough to balance the states budget. Credit markets are chucking the state the bird and are rating their bonds as pretty much junk which adds to the dilemma. This leads me to ask or point out the obvious question if California will be the first state to file bankruptcy during this mega recession?

Over at the New York Times they have this to say on the future of California and its state governments survival…

Since the fall, when lawmakers began trying to attack the gaps in the $143 billion budget that their earlier plan had not addressed, the state has fallen into deeper financial straits, with more bad news coming daily from Sacramento. The state, nearly out of cash, has laid off scores of workers and put hundreds more on unpaid furloughs. It has stopped paying counties and issuing income tax refunds and halted thousands of infrastructure projects.

After negotiating nonstop from Saturday afternoon until late Sunday night on a series of budget bills that would have closed a projected $41 billion deficit, state lawmakers failed to get enough votes to close the deal and adjourned. They returned to the capital late Monday morning only to adjourn until the afternoon, though it was far from clear whether they would be able to reach a deal.

California has also lost access to much of the credit markets, nearly unheard of among state municipal bond issuers. Recently, Standard & Poor’s downgraded the state’s bond rating to the lowest in the nation.

**SNIPPET**

And yet dirty Republican politics moves from Washington DC to Sacramento to push the envelop just beyond the breaking point to put the fix in when it comes to elections. The piece continues…

Democrats, who had already given into Republicans’ long-held dreams of large tax cuts for small businesses and for some of the entertainment industry and a proposed $10,000 tax break for first-time home buyers, balked at Mr. Maldonado’s request that the legislature tuck a bill into the package that would allow voters to cross party lines in primary elections.

Mr. Maldonado, who is also seeking a constitutional amendment to prevent lawmakers from getting paid if budgets are late, defended his request that the open primary bill be included in the budget package. - New York Times

Is it just me or does it seem like Republicans are forcing our state and federal governments into losing situations financially simply so they can point the finger of blame in the next election? And do they think that all Americans have a ten day, three month or one year memory recollection? Will the Republican Party lead the nation to bankruptcy state by state simply because they can sabotage common sense legislative action by voting no or stuffing unacceptable poison pills into the same bills that would have saved their own state or federal government? I’d have to answer yes they will and yes they are.

Governor Schwarzenegger is going to be forced to shut down all but emergency services when the money runs out from the Sacramento treasury simply because he will not have a choice. All state services will be closed from one end of the budget process to the other. Local communities will be forced to step in where the state can no longer pay to operate services. Thank you Mr. Maldonado for shutting your state and all of its services down you selfish monster.

Now that is good Republican government, stuff it down somebody else throat aka bank account to pay for. Then again, isn’t that what the federal government has been doing to the states for the last eight years under George Bush?

I’m hoping that wiser minds prevail and sort out the details to stop California from going into bankruptcy but we shall see. Republican’s are on the war path of destruction simply because they think they can blame the political party in charge when the proverbial excrement hit’s the fan come the next election.

Papamoka