California risks "insolvency" amid budget woes: government

California risks "insolvency" amid budget woes: government

www.reuters.com

SACRAMENTO, California (Reuters) - California Gov. Arnold Schwarzenegger said on Thursday the state "faces insolvency within weeks" and he will put new policies on hold until there is a deal to close the budget gap, which will top $40 billion over the current and next fiscal year.

"It doesn't make any sense to talk about education, infrastructure, water, health care reform and all these things when we have this huge budget deficit," Schwarzenegger said in his annual state of the state speech.

The Republican governor and Democrat-led legislature are at adds over how to fill the current year's budget shortfall and are poised for a struggle to balance the budget for the state's next fiscal year, which begins in July.

"The reality is that our state is incapacitated until we resolve the budget crisis," Schwarzenegger said.

"The truth is that California is in a state of emergency," he added. "Addressing this emergency is the first and greatest thing we must do for the people. The $42 billion deficit is a rock upon our chest and we cannot breathe until we get it off."

Schwarzenegger's speech stood in sharp contrast to his previous state of the state addresses. It was short, blunt and focused on the urgent task of balancing the state's books.

(visit the link for the full news article)

I have been warning about this in post after post and now here we are. My predictions are now coming true, and as I suspected, California will be the first to go:

www.abovetopsecret.com...

www.abovetopsecret.com...

We will see hyper-inflation very soon. When the US Federal Government becomes insolvent in the eyes of our foreign creditors this year we will be left with a bunch of worthless dollars in our hands.

www.reuters.com
(visit the link for the full news article)

Are there any Californians out there that have a closer view of what is going on? It seems that the MSM is being very quiet as to what this sort of news is suggesting. Why is this not bigger news?

Hey Bank of America is about to get up 200 billion dollars more of tarp money to be wasted like they did already with the first bail out, they used some of the money to invest in China.

How about investing if freaking America and the states

[edit on 15-1-2009 by marg6043]

They can't invest in America because they're obligations on paper are to our foreign investors who are growing tired of financing our out of control consumerism.

Borrow, Spend, borrow more, spend more..That is what the republicans and democrats are proposing we do. Exactly the same damned thing that got us into this mess to begin with.

We're going to see sky high prices caused by an artificial demand bubble that will dwarf the 70's. Combined with the way t-bonds and t-bills have been trading, the Fed's actions on interest rates, the bailouts, and Obama's HUGE spending ticket, we are going to be in for one hell of an inflationary spiral in the very near future...Group this with massive layoffs, foreign money leaving the US for safer investments, US credit rating being dropped below BBB, wave after wave of defaults, credit card cuts in the trillions, tax hikes that not even god would levy, and you have yourself a recipe for collapse and revolution.

The government can bail out the bankers, but not Cali?

Right now the government couldn't bail out a Popsicle stand, let alone a bank...But they're doing it anyway.

I turely dont understand California. Can someone explain it to me? The state has nearly 37 million people, 12 million more than the 2nd most populated state which is Texas, many of whom I assume pay taxes. On top of that, the state is home to more Fortune 500 companies than any other state with the exception of New York, which also has money problems dispite being the financial center of the world, and Texas which is doing ok finacially speaking. They also pay a dollar more in gas and pretty much everything else that has a tax(es) attached to it than any onther state, again with the exception of possibly New York. All of the things a state would need to prosper and they are in the hole 40 Billion dollars?

I have been warning about this in post after post and now here we are. My predictions are now coming true, and as I suspected, California will be the first to go:

This reminds me of this magazine cover... Schwarzenegger Skull and Bones, in your face photo. California has always had its problems but I do find it a hell of a coincidence that Arnold, with his suspected Skull and Bones/Illuminati/NWO links, would be the one in charge when California economically crashes into the ocean.

[edit on 15/1/09 by Pfeil]

Well, when you have liberal spending habits with conservative tax cuts you get California. They tax all the wrong things and spend on all the wrong things, and then they have to cry to the federal government for a bailout no one can afford. We are well on our way to a hyper-inflationary spiral and California, being the 7th largest economy in the world, will lead the way when foreign investment in California goes elsewhere to prevent further loss. After that it is going to be a domino-effect with state after state losing it's credit rating. And the final nail will be the insolvency of the Federal Government. All of this will happen THIS YEAR. MARK MY WORDS. THIS YEAR.

Thought i'd add this to this thread as well.

I'm glad i don't live there and i hope other states aren't on the brink of doing something similar to this.

For 2009, the base budget rose to US$515.4 billion, with a total of US$651.2 billion when emergency discretionary spending and supplemental spending are included.[1] This does not include many military-related items that are outside of the Defense Department budget, such as nuclear weapons research, maintenance and production (~$9.3 billion, which is in the Department of Energy budget), Veterans Affairs (~$33.2 billion) or the wars in Iraq and Afghanistan (which are largely funded through extra-budgetary supplements, ~$170 billion in 2007) - the United States government is currently spending at the rate of approximately $1 trillion per year for all defense-related purposes.

en.wikipedia.org...

how about cut defence to 400Bil? still more then any other Nation
and use the 100+ left to bail the state out

seriously how can a country have such a large defence budget and arm other countries for Free and not be able to support its own states

something is seriously wrong,

Defense spending is one of those things that we do needlessly. We need to be REDUCING our nuclear weapons stockpiles not doing more research on them. Defense spending is out of control and alot of this money goes to black project sinkholes that no one ever knows about and that is priced in the trillions.

reply to post by projectvxn


I think we need defense spending (how much is debatable)...what we don't need is our military all over the world meddling in other peoples affairs.

This is a great burden on our economy...oh...and it COSTS LIVES.

We need to bulk up our borders and coasts...this country is going to need protection now more than ever....we are vulnerable right now..the country is weakened....wouldn't now be a great time for an attack on the US?

I agree, but within the margins of common sense. We certainly do need to pull back the empire. And reduce our nukes. Not increase spending on both. As it is really a waste of money. We're talking trillions as you very well know.

reply to post by Pfeil


You want to know whats wrong with Cali??

ILLEGAL IMMIGRANTS.

California is a main doorway to Mexico.

They come to California and eat up all the free benefits they can get their hands on that taxpayers pay for, and cause a whole mess load of other problems. They find work that is under the table, and set up taco stands, or their own street corner business, and sell stuff without tax's illegally.

They pretty much take take take, and don't give anything back.


[edit on 15-1-2009 by ALLis0NE]

Illegal immigrants do not take that big a piece of the pie. They are a huge drain but it is not constructive to focus on illegals alone. There are HUGE welfare issues in California that do nothing but drain the system and in the end will not be there to help anyone.

Most illegals are jumping ship anyway, because they, like everyone else but politicians and economists, can read the writing on the wall...And that writing is in both english and spanish.

Originally posted by projectvxn
Are there any Californians out there that have a closer view of what is going on? It seems that the MSM is being very quiet as to what this sort of news is suggesting. Why is this not bigger news?

Because California's approach to the problem is totally logical. The reason we haven't seen more in the MSM is because it is opposite of what we're doing at the Federal level and therefore contradicts Mr. Obama and we all know that the MSM is in love and lust with him...

How in the hell is this logical to you? Spend like a liberal and reduce tax revenues like a conservative? That sounds like sound policy to you? America is on it's way to hell and people who think our approach is "Logical" are driving the bus.

No offense intended, and I may be getting you wrong here, but what California is doing will destroy her and within a matter of weeks.

Flag this thread. More people need to see this. As this is the first domino to fall in the giant Ponzi scheme we call the American Economy. People need to see what is going on. I hope this information can at least save a few people from being blind sided.