Gerry, We Need ‘Ya
Because all those electoral votes are coming to Washington with their hand out
SACRAMENTO, Calif. (AP) – If AIG was too big to fail, how about the world’s eighth-largest economy?
In a move with only one modern-day precedent, California Gov. Arnold Schwarzenegger and Democratic lawmakers are pressing the Obama administration and members of Congress for federal loan guarantees to help the state out of a desperate, multibillion-dollar jam.
California is not asking for cash, like the tens of billions given to AIG, General Motors or Morgan Stanley. (MS) 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.
Remember those innocent days our youth, when we were told that we “had” to give billions to Chrysler and GM or they might *gasp* have to declare bankruptcy? Remember how horrible-henny-penny-the-sky-is-falling we were told that would be? And now that we’ve collected on the daily double by both giving them billions and having them none-the-less declare bankruptcy…what was the point of wasting those billions? And the billions we’ve wasted on AIG, et al? Well, ok, trillions. My bad.
California has to cut their spending, and completely expunge their legislators (as does NJ).
California leaders say that would make it easier and cheaper for the state to borrow money on the bond market, reducing the interest rate by as much as half and saving taxpayers hundreds of millions of dollars.
How about this: save taxpayers hundreds of millions by not spending hundreds of millions.
The Obama administration has responded cautiously to the idea, and members of Congress from other states worry that it would put the federal government in the business of backing municipal bonds – a job traditionally held by investment banks.
They worry also that the U.S. government could overextend itself and risk its triple-A credit rating if California and other states or cities in distress start coming to Washington hat in hand.
Could overextend itself? Could?
As an aside, oh for those happy, simpler times when the Dow being down 12 whole points would be reported as a “skid.”
Nanny State | tree hugging sister | 
May 29, 2009 7:05 am
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How about this: save taxpayers hundreds of millions by not spending hundreds of millions.
Oops. You misspelled that last word.
The concept of simply not spending money is alien to these people. ALIEN.
Save by… cutting spending?
Crazy talk!
12 points as a skid.
Be careful what you wish for Bingster, we may get there in the next decade. The DOW was under 1000 then, we will probably revisit those days of yesteryear.
California’s solution, just like for GM and Chrysler and AIG and everyone else, IS bankruptcy. As unprecedented as a state declaring bankruptcy may be, this is why we HAVE a bankruptcy code and bankruptcy courts. No more fucking bailouts.
FWIW, thankfully I don’t think even Obama will bail out California. It’s not because he doesn’t want to, but because he knows it’s one thing he could do that would all of sudden cost him a significant chuck of what remains of his already down-to-earth level of popularity.
I wanted to turn it into an actual post at Banjo, but I’m too tired. Short version is a news story I saw this morning: the CA legislature shot down a whole boatload of spending bills (half a kudo to them). Some dickwad in the state Senate introduced a bill to provide health care to ALL Californians, at an estimated cost of $210 BILLION.
This is a year in which the PROPOSED budget (LARGEST IN STATE HISTORY) is $110 billion. On which there is ALREADY a $24 billion dollar shortfall.
Said dickwad needs to be beaten with a stick.
Said dickwad needs to be beaten with a stick.
More like a fireplace poker just for the blatant low balling of costs.