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Originally posted by projectvxn
I made a post about this in another thread...I heard about it on Fox News of all places...Which by the way, I have a strategy for. But I will get to that in a minute.
Like California, this is going to push the state of Kansas into default. This is the first step of insolvency. More and more states will follow and President Barack Obama will then introduce a bill to congress(Or congress will introduce it's own bill) that will appropriate3 trillion dollars to the states to cover their expenses...Since this won't stop here and this new bailout bill won't do anything about this problem. The Bonds will collapse. Not just Treasuries, but munis and other localized bond markets. Then we'll be left holding alot of green toilet paper.
This is only the beginning. States will be doing this left and right throughout the rest of the year until the Federal Government economically nukes the entire country.
LOS ANGELES, Feb 15 (Reuters) - California lawmakers narrowly failed to pass a $40 billion budget on Sunday, casting doubt on Gov. Arnold Schwarzenegger's ability to prevent the nation's most populous state from sinking into the abyss. Bleary-eyed senators in the state capital of Sacramento adjourned for the day after all-night horse-trading failed to generate the one Republican vote needed to ensure passage of the bitter mix of tax hikes and spending cuts. California, the world's eighth-biggest economy, is constitutionally barred from running a budget deficit, and has begun forcing state employees to take unpaid leave. State spending on infrastructure work has also largely wound down, adding to the drag on the broader U.S. economy, which appears to be facing a long and deep recession. Budget negotiations will resume on Monday, said senate leader Darrell Steinberg, after taking pity on lawmakers who had been confined to their offices by party leaders.