California Running Out of Money!

California State Running Out of Cash

www.latimes.com

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

California finance experts say they know of no time in recent history when the state has sought an emergency loan of this magnitude from the federal government. The only other such rescue was in 1975, they said, when the federal government lent New York City money to avoid bankruptcy.

(visit the link for the full news article)



[edit on 3-10-2008 by Mdv2]

Said Matt David, Schwarzenegger's communications director: "California faces the potential of a perfect storm created by the financial crisis' effect on liquidity.

California is among the states in urgent need of money. If they will not receive money quickly, they will not be able to run day-to-day government operations anymore, Schwarzenegger writes in a letter obtained by LA Times.

After Wall Street has been greatly affected, it's about to hit the people now. The sub-prime mortgage crisis that forced many people to leave their homes resulted in lower government tax incomes, resulting in a crisis on all governmental levels.

Schwarzenegger to U.S.: State may need $7-billion loan
In a letter obtained by The Times, the governor warns that tight credit has dried up funds California routinely relies on and it may have to seek emergency aid within weeks.
By Marc Lifsher and Evan Halper, Los Angeles Times Staff Writers
October 3, 2008

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.

The state of California is the biggest of several governments nationwide that are being locked out of the bond market by the global credit crunch. If the state is unable to access the cash, administration officials say, payments to schools and other government entities could quickly be suspended and state employees could be laid off.

..snip..

California finance experts say they know of no time in recent history when the state has sought an emergency loan of this magnitude from the federal government. The only other such rescue was in 1975, they said, when the federal government lent New York City money to avoid bankruptcy.

..snip..


The cash needs to be in the state's bank account by Oct. 28 to be available to fund a scheduled $3-billion payment to more than 1,000 school districts.

..snip..

But those payments won't be forthcoming if the state can't do routine borrowing. For now, "the window is shut, and if it stays shut, we are in deep trouble," said an administration official, who asked not to be identified, citing the sensitive talks with Washington.
..snip..

"I don't think we have ever gone to the feds," said Fred Silva, senior fiscal policy advisor with California Forward, a state budget think tank.

www.latimes.com
(visit the link for the full news article)



[edit on 3-10-2008 by Mdv2]

As a resident of the State of California, I think that the first services to be cut should be the Prison System. The Governor should order the Prison Guards to lock-down the prisons and then go home. Take a few weeks off until this gets settled and then return to work. This would not only alleviate some of Californias financial problems, but reduce the prison population in the state to near zero. Many gang problems would be eliminated, frivolous lawsuits meant to tie-up the courts would suddenly disappear, and lots of child molesting perverts and illegal aliens could be removed from the books. The only negative side effect of this would be the Psychiatrists and Psychologists suddenly out of work due to the lack of prisoners they were planning on releasing into society anyway, but they need to go get real jobs anyway.


The average yearly cost of a Prisoner in a medium security prison is now close to $96,000.00 per year.

Not sure what you mean. But shutting down the prison services would mean releasing them, not abandoning them. These people are your brother, you sister, your father, your child, and Norway doesn't have our crime rate or criminal system due to their civilized sharing, decent society. So when the s**t hits the fan, caused by these elitist scum who are orchestrating this entire agenda, don't kick the disempowered and disadvantaged. Save your anger for the elites.

I assumed this would be big news. When I saw it on television here in Holland it really shocked me. When you read about bank beings in troubles it is still on some distance.

Do you realize that this could very soon start to hit entire communities?

Amazing timing. This is feeling more and more like extortion if you ask me.

"The federal rescue package is not a bailout of Wall Street tycoons -- it is a lifeboat for millions of Americans whose life savings, businesses, retirement plans and jobs are at stake," Schwarzenegger said.

No, actually it is a bailout of rich tycoons. They just happen to have enough power to bring down everyone else with them.

This is really making me ill.

I am really disappointed with Arnold. Some of his decisions do not make sense to me at all.

Something I have noticed over the years. What ever happens in California effects the rest of the world. Real Estate, economy, etc.

CALIFORNICATION

I would like to link the following thread I started last week about Jim Rokakis, who warned the Fed and saw it all coming.

Now they are experiencing similar, if not worse, problems in Ohio:

(In case you want to watch the interview, click on the link in the quote, if it doesn't work let me know)

Rokakis: 'For the First Time I am Afraid' - Cities heading for Banktrupcy

A truly great reportage about Jim Rokakis, treasurer of the Cuyahoga County in Ohio. As a result of the sub-prime crisis, hundreds of thousands of people in his county were forced to sell their house. As a result, tax revenues have gone down badly, affecting public facilities such as schools badly.

Back in 2000 he went to the Fed in Cleveland to warn them and pushed for action to stop the dubious mortgages. Nothing was done, they didn't take him serious.
The capital city of Ohio, Columbus, blocked their proposal to take action on a local level in order to stop sub-prime mortgages from being granted.

He is very right. Now candidates are being forced to do something. But ask yourself how integer Obama and McCain are by promising to reduce taxes while there's such a huge economic mess. Instead they should be fair and tell people how the situation is.

___________________________________________________
Anyhow watch yourself. The show is Dutch, but the interview is self-evidently in English (enlarge the screen by right clicking -> 'in en uitzoemen' -> volledig scherm. Starting at 13.28 minutes):
player.omroep.nl...


At the right upper corner you see 'instelling' If you click on that, you can choose between Quicktime or Media player as well as you can choose your internet speed. Choose 'langzaam' for slow 'snel' for fast.

www.abovetopsecret.com...



[edit on 3-10-2008 by Mdv2]

reply to post by SailorinAZ


He seems to be just toeing the party line if you ask me. This is timed to sway public opinion in favor of the vote. If I had to guess, he is just following orders.

Don't blame Arnold hard to run a buisness when you have no capitol,at least he is being honest unlike some other governors,need to cut all this crap from budget the democrats brought in,I've lived in So Cal for 55 years,looks like time to move to Az,I'm afraid that the taxation will be up to 20% by 2009 just to try and keep police and fireman jobs,the mort bust literaly killed the big cash cow,I'm sure they were licking their chops when prices rose and the anticipation of all that property tax,I love the satate but getting too rich for my blood

Didn't Cali just pass a new $145 Billion budget? I think this is BS. I think Arnie was coerced into announcing this BS to help sway House votes.

The timing is just a tad too perfect

It is no BS, in many other states they experience similar problems. In Maine they literally stopped the construction of new highway due to running out of money.

Perhaps you should watch the interview with Jim Rokakis of Ohio I posted here as well.

[edit on 4-10-2008 by Mdv2]

I have an idea for Governor Arnold!
how about a winfall profit tax on all those a-hole movie stars???



[edit on 4-10-2008 by Fathom]

It just keeps getting deeper and deeper doesn't it?

They should have never done the bail out. Sooner or later we all have to pay the piper. Whether that means a few slow years or a civil war I don't know, but it can't continue like this.

Fire half the government workers or whatever it takes and get through the pain.

Instead of killing the prisoners as one person suggested maybe - they should end the war on drugs and we wouldn't have 2/3 of them. Just think we could lay of half the worthless prison guards and they'd go back to washing cars for a living or whatever it is that uneducated morons do.

Not only that we would need half the cops or courts either. Just think half the attorneys & judges would have to get honest work.

Let the damn system fail and those of us that are left will pick up the pieces and start fresh.

Just raise the sales tax to 10%. It will get there anyway, so do it sooner. Or terminate some of the services that the government provides. "Hasta la vista, baby."

As a resident of Los Angeles, I have to say that this issue is highly confusing and complex.There are many faults, the socialist government and the socialist government loving voters can be blamed but there are other factors.

California has ballot initiatives offered every election. I am sure some of you have heard of the infamous prop 187, its just an example.

Well it seems that propositions always get passed that rely on borrowing money or expanding the government in some way that would be unaffordable.

Even with the high taxes, it still isn't enough for the expenses and the government is forced to borrow some more. In fact Arnold loves to borrow and that is how he makes up for the account deficits. One can borrow only so much *cough* Federal government *cough* and the debt service gets nasty.

So with all the borrowing, increased programs via initiatives(with inaccurate cost projections), illegal immigrants, expensive infrastructure, high crime rates, high energy costs (think Enron and their expensive contracts as well as the low number of oil refineries), high number of inner city poor, housing price roller coasters every decade, and this state becomes a roiling cauldron of fiscal confusion.

Then there are the natural and man-made disasters. It seems that every year there is something. I suppose that I am still waiting for one of the volcanoes to blow.

It really shouldn't be this way. The huge port systems, the entertainment industry, and the rich agriculture should make this state extremely rich. I really hope that California isn't a trend setter because I am starting to feel that this place is cursed.

[edit on 4-10-2008 by wutone]

Originally posted by SailorinAZ
I am really disappointed with Arnold. Some of his decisions do not make sense to me at all.

Something I have noticed over the years. What ever happens in California effects the rest of the world. Real Estate, economy, etc.

CALIFORNICATION

Lol.... Arnold S. is a republican and he only do what is good for the richest, sorry that he faked it that he will help the middleclass, but isnt it clear that a rep. guy works for the rep. party and rep. voters?

Best regards.

Loke.

Originally posted by Loke.

Originally posted by SailorinAZ
I am really disappointed with Arnold. Some of his decisions do not make sense to me at all.

Something I have noticed over the years. What ever happens in California effects the rest of the world. Real Estate, economy, etc.

CALIFORNICATION

Lol.... Arnold S. is a republican and he only do what is good for the richest, sorry that he faked it that he will help the middleclass, but isnt it clear that a rep. guy works for the rep. party and rep. voters?

Best regards.

Loke.

But the rich in California are a bunch of Democrats, you should check out Hollywood and the $25,000 per plate Obama fundraisers. The richest counties in California are also mostly Democrat. Does that mean Arnold is working for them?

BTW Maria Shriver, from the Democrat Kennedy family, has Arnold by the testicles. He can only go so far in his "Republicanism".

Loke,
He may be a member of the Republican Party, but his actions are not very conservative.

There is a new emerging political thought being referred to as Conservative. Many Republicans now refer to themselves as Conservatives rather then Republicans. Even some of the old Dems are switching and calling themselves Conservatives.

Essentially, less government, less taxes, more freedoms, etc. Getting back to basics.

Arnold is a disappointment.

Well, Arnold S. better do something soon because the state of California is the one who pays my paycheck!