John Seiler at Cal Watchdog wrote yesterday on what happens when California repudiates its loans. Would it it be the end of the world? Probably not.
With debt service is $5.5 billion this year and will go go north of $11 billion within three years, default might actually it might be a good thing. California could sell assets, eliminate non-core programs and boondoggles like high speed rail, restructure its work force and employee agreements, as well as unfunded pension and healthcare liabilities.
This would be a good time to close down business as usual in the legislature as well.
Bill Gram-Reefer is Editor & Publisher of Halfway To Concord, founded in 2004. Halfway To Concord is the leading online source for community-driven political news, events, and opinion for Contra Costa County and the San Francisco East Bay.
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Chiang was on CNBC and said “UNTIL” there is a legal challenge to paying the pensions, they will be paid. Notice he did not say “IF”.
Where are those activist attorneys when we need them?
State Controller John Chiang announced that he will have to begin issuing those IOU’s within the next 2 to 4 weeks depending upon cash receipts.
The state needs to have a budget but the Governor has drawn a line in the sand over pension reform. I doubt if he can hold.
@rootvg:
I’m inclined to agree with your cynical assessment that “Sacto isn’t going to change.”
If your stomach is up to it, see more re the power of public sector unions at:
http://biggovernment.com/sparker/2010/08/15/in-washington-its-the-money-that-talks/#more-157181
We’ve discussed leaving but we can’t. The opportunities in our chosen field are here and that’s all there is to it. We discussed going back to the midwest but the opportunities are so few and the salaries so low and even the stability of employment there suggests the level of risk is just too high. We’re stuck here.
Yes, two and two are still four. I sometimes wonder if I’m one of the few who still believe it.
Sacramento isn’t going to change. Did you know that California is the only state where union membership has actually increased over the past ten years? Why? I think it has to do with immigration. We’ve brought so many people here from nations with dysfunctional or otherwise socialist political traditions that we have seems normal to so many Californians. That isn’t going to change and in fact I believe it’s going to get worse before it gets better.
I still say the Dems (due to their strength in the north) will eventually get two thirds in Sacramento, hike the taxes and simply tell us to go to hell. It’s Democrat group based coalition politics and that’s how it works. It really doesn’t work but if you come from the developing world you don’t know the difference.
Wyoming looks even better
Yes, Richard. That’s what California needs but the extent to which progressivism is literally baked into the state’s culture suggests otherwise. This isn’t the East.
East West doesn’t make any difference
2+2=4
Reality will win out eventually even in California
The ugly consequences of overspending can be handled. In 1975, New York City was not able to pay its bills. Default was near. In June 1975, the New York State Legislature set up an organization called the Municipal Assistance Corporation (MAC — sometimes called Big Mac). MAC created, in effect, a financial junta to run New York City’s finances. MAC fired municipal workers and cut spending. After a few years, New York City was solvent. California needs something akin to MAC.
Richard S. Colman
Orinda, CA
Aug. 14, 2010
End of the world or not, it won’t happen. There would be too many far reaching implications nationwide and there’s still a Democrat President and Congress in office.
Bob Brinker gets calls about this all the time, and his answer is always the same. Cal will be bailed out. It’ll happen…and when the Dems get two thirds of the legislature they’ll lay it on the taxpayer. This is what happened in New York City. Bloomberg came out and said NYC isn’t for middle class people and if you can’t afford it, move out. That’s what’s gonna happen here.
Nothing happens – same as always.
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