Author Topic: What would happen if...  (Read 4615 times)

Werewolf

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What would happen if...
« on: May 26, 2009, 05:19:30 PM »
...California actually did go Bankrupt or couldn't sell any revenue bonds?

It wasn't too long ago that the notion of a state going bankrupt would have been considered wholly ludicrous. No one would have given a 2nd thought to the possibility.

Now, though, it could happen and maybe not just in CA. CA seems the best candidate though with a possible $42B shortfall and a credit rating in the dirt. The state's obligations are possibly just too great to ever recover from.

What happens if CA goes belly up? It can't pay it's bills and no one will loan it any more money? What are the short term consequences?

In the long run do the rest of us living in fiscally responsible states get to pay for CA's failed experiment in socialism?

Or do the people of CA just have to suck it up and suffer the consequences? What form might those consequences take?

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digitalandanalog

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Re: What would happen if...
« Reply #1 on: May 26, 2009, 05:29:48 PM »
They would try to auction off L.A. first. Of course no one would buy it.

Seriously, the feds would find some to bail them out on the other states's dime and then declare direct control. Bye bye sovereignty.

Standing Wolf

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Re: What would happen if...
« Reply #2 on: May 26, 2009, 06:54:50 PM »
Quote
What happens if CA goes belly up? It can't pay it's bills and no one will loan it any more money? What are the short term consequences?

Do you even need to ask, friend? Everybody in the country will be required to bail out that "state."
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HankB

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Re: What would happen if...
« Reply #3 on: May 26, 2009, 06:56:53 PM »
I would think a lot of other states, with problems of their own, would object.
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Scout26

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Re: What would happen if...
« Reply #4 on: May 26, 2009, 07:01:05 PM »
I would think a lot of other states, with problems of their own, would object.


Nope, CA would just be the first domino.....
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Re: What would happen if...
« Reply #5 on: May 26, 2009, 07:50:05 PM »
...California actually did go Bankrupt or couldn't sell any revenue bonds?


It's a revenue shortfall, not the end of the world.  They either cut spending, raise taxes or sell off assets.  Realistically, they'd cut spending. 

CA has bluffed that they will cut essential services first. 
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lee n. field

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Re: What would happen if...
« Reply #6 on: May 26, 2009, 09:16:44 PM »
Quote
CA has bluffed that they will cut essential services first. 

That's always the threat.
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Standing Wolf

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Re: What would happen if...
« Reply #7 on: May 26, 2009, 09:32:09 PM »
Quote
I would think a lot of other states, with problems of their own, would object.

I'm sure they would; I'm equally sure more would turn to the federal government with extortionate demands of their own, crying, "Me, too! Me, too! Me, too!"
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De Selby

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Re: What would happen if...
« Reply #8 on: May 27, 2009, 06:42:14 AM »
California has some of the lowest effective corporate taxes in the country.  Just because people dabbled in allowing civil unions and San Francisco doesn't care about them doesn't make it a "socialist state" (whatever we mean by that.)

It also can't go bankrupt.  But it can just fail to pay its bills. 

California's financial problems come from lots of things, but chief among them is its extremely tough criminal laws.  That gives the state a huge criminal population, and prison guards, due to their powerful unions, make extraordinary paychecks to guard all the prisons.

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Re: What would happen if...
« Reply #9 on: May 27, 2009, 11:17:06 AM »

California has some of the lowest effective corporate taxes in the country.  Just because people dabbled in allowing civil unions and San Francisco doesn't care about them doesn't make it a "socialist state" (whatever we mean by that.)

It also can't go bankrupt.  But it can just fail to pay its bills. 

California's financial problems come from lots of things, but chief among them is its extremely tough criminal laws.  That gives the state a huge criminal population, and prison guards, due to their powerful unions, make extraordinary paychecks to guard all the prisons.


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makattak

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Re: What would happen if...
« Reply #10 on: May 27, 2009, 11:21:48 AM »
California has some of the lowest effective corporate taxes in the country.  Just because people dabbled in allowing civil unions and San Francisco doesn't care about them doesn't make it a "socialist state" (whatever we mean by that.)

It also can't go bankrupt.  But it can just fail to pay its bills. 

California's financial problems come from lots of things, but chief among them is its extremely tough criminal laws.  That gives the state a huge criminal population, and prison guards, due to their powerful unions, make extraordinary paychecks to guard all the prisons.



Huh, I think some people disagree.

http://www.taxfoundation.org/files/sbtci_rankings2006-2009-20081030.pdf  (California is ranked 48 out of the 50 states)

Also, I think the companies voting with their feet disagre, but I'm sure Caliifornia really is a great place to have a business.
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Firethorn

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Re: What would happen if...
« Reply #11 on: May 27, 2009, 11:57:01 AM »
but I'm sure Caliifornia really is a great place to have a business.

As long as you're a business California 'likes', and therefore gives favored tax status to, or aren't making any money.

If you're not a green company it starts making sense to move out once you've built the business and started making money.

Scout26

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Re: What would happen if...
« Reply #12 on: May 27, 2009, 12:58:45 PM »
California has some of the lowest effective corporate taxes in the country.  Just because people dabbled in allowing civil unions and San Francisco doesn't care about them doesn't make it a "socialist state" (whatever we mean by that.)

It also can't go bankrupt.  But it can just fail to pay its bills. 

California's financial problems come from lots of things, but chief among them is its extremely tough criminal laws.  That gives the state a huge criminal population, and prison guards, due to their powerful unions, make extraordinary paychecks to guard all the prisons.



Thank you for validating one of Einstein's Theory's....

 ;/ ;/ ;/ ;/ ;/
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Werewolf

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Re: What would happen if...
« Reply #13 on: May 27, 2009, 04:48:05 PM »
California has some of the lowest effective corporate taxes in the country.  Just because people dabbled in allowing civil unions and San Francisco doesn't care about them doesn't make it a "socialist state" (whatever we mean by that.)

It also can't go bankrupt.  But it can just fail to pay its bills. 

California's financial problems come from lots of things, but chief among them is its extremely tough criminal laws.  That gives the state a huge criminal population, and prison guards, due to their powerful unions, make extraordinary paychecks to guard all the prisons.


ROFLMAO!

So it's your contention that CA's financial troubles - to the tune of $42B - are due to them having so many people in prison and so many prison guards.

Man those CA guards must make some really big bucks. Or all those criminals are living the life of Riley in prison or even more likely - it being CA under discussion - both.  Laughable. A state doesn't rack up a $42B deficit because it's got too many prisons, prisoners and guards. If it does it has a way more serious problem on its hands than just not being able to pay its bills.

OH! and what ever YOU may call it - if no one will loan CA money and it can't pay it's bills it is bankrupt for all practical purposes.



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grampster

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Re: What would happen if...
« Reply #14 on: May 27, 2009, 06:41:55 PM »
California, as always, leads the way.  In this case California is the blueprint or textbook on modern day leftist liberalism, unfettered socialism and a policy of ignoring illegal immigration.
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Re: What would happen if...
« Reply #15 on: May 27, 2009, 09:18:35 PM »
If I bid $1.00 at the bankruptcy auction, do I get just the state or all its debt too?

If I am the winning bidder, I have plans to move it across the continent.  The "Left Coast" vs. "East Coast" liberal thing has been driving me nuts for years.  I'm going to simplify it by lashing California to Massachusetts and leting the tides drag them both under at once.  If I've got the charts figured out right, the whole shebang ought to bump into Jersey and open a hole that will make the Titanic's look like a paint scratch.

We end up with a fishing reef about equal to the Great Barrier Reef, except slimier.

stay safe.

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Re: What would happen if...
« Reply #16 on: May 27, 2009, 09:47:16 PM »
We end up with a fishing reef about equal to the Great Barrier Reef, except slimier.

Crabs gotta eat, too.
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Antibubba

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Re: What would happen if...
« Reply #17 on: May 27, 2009, 11:25:59 PM »


We're too big to fail!   ;/

Seriously though, the laws regarding budgets here are a bit different.  For example, just to pass a budget requires a super-majority, which is two thirds of the Assembly; this was set into place to prevent a mere majority to dominate state spending.  The result has meant a lot of back room deals and pork.  The second issue is the ballot initiatives, which allow voters to circumvent the Legislature entirely to enact laws--another means to avoid self-serving Legislators (odd how distrustful many Californians once were of politicians, including the politicians who wrote the current state Constitution!). 

I'm never going to be a huge fan of taxes, but if you want to run a state there has to be adequate means of revenue.  Our roads are the worst in the country.  Our public schools are, I think, 44th in the nation.  Our prison guards, Werewolf, belong to a union that wields great power in Sacramento; a starting Correctional Officer can, with overtime, make six figures.  Our prisoners are not living the good life because they are warehoused at 2 to 3 times capacity--so bad that a special administrator was brought in by the Federal courts because conditions were so poor. 

What we'll probably see within a year is a Constitutional Convention.  That is going to be a six-ring circus.
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Airburst

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Re: What would happen if...
« Reply #18 on: May 28, 2009, 01:08:23 AM »
What we are looking at in cali could very well be what is in store for .gov in the next two or three years. Printing money like it is going out of style and running trillion dollar deficits will eventually catch up to us. I am, for the first time very concerned about the next twenty or so years that I figure I have left on this planet.

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Re: What would happen if...
« Reply #19 on: May 28, 2009, 01:16:53 AM »
California has some of the lowest effective corporate taxes in the country.

I see no need to further add to the responses to the rest of your post, but I will say this: California - with its entirely unchecked local governments, ultra-zealous environmental regulators, and demonstrably activist judicial branch - would be among the last places in America that I would choose to start a business.

Just try to imagine how desirable it must look *right now*, with the government deciding whether to tax its way out or spend its way out... no, thanks, I am not impressed by California.  Grand experiment in big government that went wrong a good long while ago.

coppertales

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Re: What would happen if...
« Reply #20 on: May 28, 2009, 10:18:46 AM »
CA can sell the lower third of the state to the mehican drug gangs.  I bet the gangs would jump on that with the ready market already in place.

Realistically, BO's government will bail out the state and the rest of us will pay for it.......chris4

Werewolf

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Re: What would happen if...
« Reply #21 on: May 28, 2009, 10:48:53 AM »
California is already asking for loan guarantees from the Federal Government. Not CASH but loan guarantees.

Is the first step down the road to a federal bailout?

California to U.S.: Back us up for new loans

Quote
California is not asking for cash, like the tens of billions given to AIG, General Motors or Morgan Stanley. Instead, the state with the worst credit rating in the nation is asking that Washington act as a sort of co-signer on the state's borrowing, to be backed up with money from the Troubled Asset Relief Program
Emphasis mine...

Like I said: The first step down the road to bailout. We all end up paying for the failed experiment that is the CA welfare state.
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richyoung

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Re: What would happen if...
« Reply #22 on: May 28, 2009, 12:29:40 PM »
This is nothing new - New York City was going bankrupt during the Ford presidency, and had enough political pull that they basically manuvered the New York State government into the verge of bankruptcy as a way of blackmailing the Fed to bail them out - I don't remember how it ended exactly - the Trez Sec, (Simon?) said if they DID bail them out, the terms had to be so onerous that no other city or state would want to go down that road.  May have cost the Repubs the '76 election and given us Smilin' Jimmy the Roofer.  I guess it worked though - at least until now....
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K Frame

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Re: What would happen if...
« Reply #23 on: May 28, 2009, 12:35:47 PM »
Yep, NYC was in a lot of trouble back then.

The whole mess prompted this headline in the NY Daily News...




One of the true classics of modern journalism. :D
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Werewolf

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Re: What would happen if...
« Reply #24 on: May 28, 2009, 12:41:01 PM »
Yep, NYC was in a lot of trouble back then.

The whole mess prompted this headline in the NY Daily News...




One of the true classics of modern journalism. :D

Now - if only Obama would...

<smacked in head by reality>

Never mind...
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