The Next Big Bailout? California's Dream Becomes Our National Nightmare


After voters rejected propositions designed close a looming budget shortfall of $21 billion, California's dream has become our national nightmare.

Given the state's economic size, huge population and Electoral College importance, most observers believe some kind of federal bailout will soon be forthcoming.

California's referendum process is "dysfunctional" and the state is now paying a heavy price for the "split personality view" that you can maintain service without the tax revenues to pay for it, says University of Texas professor James Galbraith.

While very critical of the state, "the barn door is already opened on rewarding bad behavior," Galbraith says. "And you can't begin to compare the behavior of states and banks."

The economist and author declined to predict whether the government will bail out California, but notes $21 billion is a lot less than has been pledged to Bank of America, Citigroup, AIG, or myriad other financial firms. Even a federal guarantee of the roughly $2.8 trillion of U.S. muni debt outstanding would be but a fraction of the total cost of the financial sector's bailouts to date.

Regardless of what form, if any, a bailout of California (or other states) takes, Galbraith believes aid to states is an important "stabilizing factor" in the current environment, citing the "vital public services" they provide as well as related jobs. Had more been done at the beginning of the crisis to support the states (vs. the banks) it would have had a "substantial mitigating effect on the massive loss of jobs," he argues.


http://finance.yahoo.com/tech-ticker/article/252585/The-Next- Big-Bailout-California's-Dream-Becomes-Our-National-Nightmare?tickers= %5EDJI,%5EGSPC,BAC,C,AIG,IIC,NCO?sec=topStories&pos=9&asset= &ccode=

I say put the Army Corps of Engineer to work and sink the whole damn state into the Pacific Ocean.

hell now graysteed that is no way to be , it is unexcetable and way too realistic of a aproach !


more like us is what we need fanta46

Feeling competitive, huh, Fanta?

California is the poster child of American socialism.


The way it looks from an inside of rot, is that a lot of people here are waiting for the Governator to start cutting all those services we don't need. But, he doesn't. He just keeps threatening us with a possibility of having to cut firefighters, police and teachers.

What a revolt!

Why can't he start cutting with millions upon millions of bureaucrat offices, and then the services for "poor". That is a subject of it's own.

Everybody knows living in California is very expensive. So, if you feel like you're about to go hungry, may-be a more regular state is a better choice? All these people that want to be bailed out in California, they all already have a lot more money than those living in other states. If they simply moved, they would be super fine. It's only Californian prices, that they can't afford.

Anyway, we just voted down several of the government's tricks to raise our taxes. WE WANT THE HUGE WELFARE CUT. CAN'T AFFORD IT? MAY-BE CALIFORNIA REALLY ISN'T FOR YOU! I wonder if this is going to be heard, or if we simply going to be bailed out as if we were asking for it.

Competitive?

LMAO

All I know is that the residents of 49 other states are going to have to carry the burden of this.

I guess this is what happens when you elect actors, and non native Americans to boot, to run your affairs!
Aye?

Easy there, Fanta.

I am not fond of what Shwartzenegger is doing, but that doesn't mean that it follows from him not being native born American.

FDR was a native born. Look what that rat did!

As far for the bailout... We bailed out your unions. O.K.? Now, you will bail out our lifestyle. ...pro quo.

NC is a right to work state!

If NC elected a Non-Native as Gov it would probably cause a war here.

WHERES MY BAILOUT

California shelters more Illegals than all the rest of the shelter States combined.
They need the money to support all the social services the Illegals require.
And if BHO says they need us to pay for it, it must be the best thing for the Nation.
The other day, a man at the hardware store was complaining about the cost of everything gowing up.
I asked him who he voted for. He said, Obama. I gave him the White House phone number and told him to call and tell them about it.

if people want to complain about bailouts and earmarks...call those in charge....like congress and the president that allow them

I'm about done complaining, Rose.
All thos BHO supporters are getting just what they voted in.
We, to those Politicians and BHO, are nothing but a big bunch of suckers who will just allow them to break our backs and the neck of our once great nation.

It's not like anything had changed since FDR was president. None of them ever cared for American people.

(There is a rumor that JFK did. I don't know that. Because he was killed, there is no way to find out. Had he lived, he could have thrown his famous executive order away himself.)

There is no other State in the Union as liberal as Calif nor do I know of another which votes on bills by referendum.

Californians created their own problems. You cant push the blame off on any other state or the Union!

Cali HAD the fifth largest economy in the world. It is now a big cluster-fick!

Doesn't work this way, Fanta. First you were telling us how all of us need to bail out your friends in auto business. Did you exclude Californians from paying that? Nope.

This is what a typical communist does. He says ALL need to pay for what he needs, but then he says that what you need is just wrong.

I paid for your pie, even though I was against it. Now I want a piece of your pie, Fanta. How do you like your own medicine?