1 Wow, Maetenloch, that idea of stripping a state of its statehood and reverting it to territorial status blew my mind a little.

2 Let's not gloat over this. A lot of people are going to be hurt.

3
1. Who cares?

2. Fuck 'em.

4
The important thing is that California died doing what it loved to do.

/nods.

5 Hmm. I wonder if you could declare a state a financial disaster area and place it -- and its budget -- under martial law...

6 "... reverting it to territorial status"

... and readmission might consist of 2 or 3 states, thus partitioning the problem areas into smaller areas, with less political muscle.

7 California's 2010-11 budget is $86 billion dollars and about 23% of that will have to be borrowed to make up for the budget deficit.

The feds are financing them now. Hopefully the Repubs will stop this next year.

As for rescinding their Statehood I don't think congress has that authority.

I think what will happen is that they will just default on their bonds.

8 Dude. I like the State-Territory-State idea. Especially since CA is the only Western state which skipped the territory phase. It's Karmic. (and I say this as a life-long Californian.)

9 ... and readmission might consist of 2 or 3 states, thus partitioning the problem areas into smaller areas, with less political muscle. Posted by: Arbalest at December 21, 2010 03:27 PM (KHA4G) And two senators each, at least four of whom will be Democrats. Pass.

10 Give Gov Moonbeam a few months. Working hand-in-hand with the same elected slime who got CA into this mess, he can screw things up so badly that the only solution will be to sell the whole friggin' state for scrap and let the illegals -- who are already de facto citizens there -- have the dirt.

After four decades of voting "no" on every damn proposition, bond issue and free-spending Democrat legislator in the Fool's-Gold(en) State, I say: shit on 'em. The loons in the state (and their enablers, who fell for the fake promises every time) got what they wanted. I hope they choke on it.

11

BOHICA baby.

The Gov., Moonbeam Brown is going to try to repeal Prop 13 by lifting the caps on business property taxes, making it even more difficult to do business in California, driving business out of California, reducing tax revenues and increasing the deficit... etc, etc, etc,

Boned, boned, boned we are.  

12 sell Malibu to Exxon.

13

Good article about the last State bond default (Arkansas)

14 1:  Ironically, it's also my preferred way to take this, after a fashion--you want a bailout, you go back to Territory until you can actually handle your own affairs responsibly.

Why yes, it would also happen to take a bunch of reliable Dem electoral votes off the table.  Which is why it would never happen, even though it's probably the most sensible of all possible options.

15 Maybe they could make California a federal district like Washington, D.C.? Of course, given how much a shit hole most D.C. is, this may not be the greatest idea I have ever had.

16 I thought Drew would have raced to get here.

17 Or, maybe make one of the conditions of a federal bailout that the entire state government has to be audited by a bigtime accounting firm, and all expenditures above a certain level have to be matched to some form of either revenue or cost cutting.

18 Maet, your post reminded me of this little gem: California Treasurer Calls for Ban on Muni Credit-Default Swaps.

Blame the messenger, right?

19 Fuck California.  I'm tired of the shit that comes out of that state.  They deserve the misery they've set up for themselves.  I just don't want any Oklahoma money being jacked and sent to those despicable America haters. 

20

I, as one Kahleefornian, welcome our new Chicom overlords.

We had a Red Star on our flag out of the gate!

21 And two senators each, at least four of whom will be Democrats. Pass.

Posted by: joncelli© at December 21, 2010 03:29 PM (RD7QR)

It might only be 2. The SF Bay area is only about 5 million people, and while SF is very 'D', San Jose (more people, since 1998 or so) is less so.  And from reading HillBuzz (Real support for Sarah Palin; real exposes of Islam ... parallel universe inversion there?), there's a chance SF might go 'R' in 2012.

22 I don't think the states will default on their bonds unless they have absolutely no other recourse. More likely, they will strip-mine every thing of value in the state to satisfy the senior debt-holders: they will tax, they will sell property, they will cut services, they will shake every bush and tree for free dollars. In California's case, it will require a level of austerity that the liberal denizens of that state may not accept -- their cherished social programs will have to die on the altar of austerity so that investors can be paid. Given the class-war (and race-war) rhetoric this will incite, I wonder how it will play out. But no: I think state bonds are (relatively) safe. It's munis you have to worry about: big cities like L.A., San Diego, San Francisco, Chicago, New York, etc. are deeply in hock in munis, and will have to roll that debt soon. However, investors are beginning to "short" lots of munis by purchasing CDS, which means that the perception of munis being a very safe investment vehicle is starting to crack. Cities will have to pay more to roll their debt, which means even *more* austerity, etc. (And lots of Muni bondholders left twisting in the wind, I'm betting.) The problem is not one of liquidity (cash flow), it's one of solvency (an ability to meet current and future obligations). By any reasonable standard of solvency, California and Illinois are completely bankrupt. But they have no legal mechanism other than brutal and prolonged austerity to get themselves out of the mess, and with their liberal populations, it's not clear how this will play out. (Greece and Ireland are looking at exactly the same predicament over in Europe, with Portugal and Spain to follow.)

23 The Magic of Compound Interest.  Is there nothing it can't do.

24 Not to mention the fact that this would be hugely unpopular with California voters and their representatives.

What California voters?  If CA suddenly became a Territory, they wouldn't be eligible to vote any more- unless they moved to a State.

That said, what about simply imposing a trustee for fiscal matters: that is, all other Government functions still handled by a Republican form of government, but the budget handed down "from on high" and non-negotiable until the problem is fixed?

25

The feds are financing them now. Hopefully the Repubs will stop this next year

 

The same Repubs who appear to be lining up to ratify a treaty in a lame duck session? The same ones who set a record for breaking their own pledge on sticking to budget and tax items only?

 

Not bloody likely.

 

26 17
Maybe they could make California a federal district like Washington, D.C.? Of course, given how much a shit hole most D.C. is, this may not be the greatest idea I have ever had.
Posted by: Penfold at December 21, 2010 03:33 PM (1PeEC)

Absolutely not, because Congress would run the whole state as well as they've run DC. Revert to territorial status or get the hell out.

27 .....their cherished social programs will have to die on the altar of austerity so that investors can be paid. Given the class-war (and race-war) rhetoric this will incite, I wonder how it will play out.

That's a feature, not a bug.

28

Errr... are you saying Congress could just revoke California's statehood?  With a vote?  I'm not so sure about that...  I mean, I suppose it isn't expressly prohibited... but we fought a Civil War to keep states in the Union.  And yeah, I don't think being a territory counts as a substitute.

Anyway, you mention that as a soverign, the State of California could just default on its debts, and there would be no recourse to sue.

If that is the case, why couldn't they just default on the union pensions and  contracts?  Haven't courts allowed lawsuits to proceed when states tried to not pay pensioners and government employees what they were owed?

29 19 Maet, your post reminded me of this little gem: California Treasurer Calls for Ban on Muni Credit-Default Swaps.

Blame the messenger, right?

Posted by: Andy at December 21, 2010 03:37 PM (5Rurq)

That fat lardass asshat Lockyer says the risk of default is ZERO! Bwahahahaaaa.

Too much dope smoking goin' on in this fucked up place. Reeks...

30 Posted by: ed at December 21, 2010 03:40 PM (QLhy5)

Except that's more or less exactly what Reconstruction was.  The CSA was never viewed as a foreign government, the States were viewed as insurrectionist.  So after the war, the States were moved back to Territory status and then re-admitted one-by-one when they met certain requirements.

31 What's this talk of California defaulting or even getting bailed out? The state is overflowing with super smart hipsters who will be bailing YOU out once they come out with the newest Apple application that creates millions of green jobs

All with half their medical marijuana laced brains tied behind their backs

32 1. You will bail us out via the Fed and some sort of monkey business. 2. ??? 3. Profit! Thank you, by the way. We spent your money years ago and loved it!

33
it's funny...as missile-defense shields are being outlawed, we're worried about a word that Haley Barbour might have said in 1982.

34 Not likely, but if it became a territory that's 2 lib dem senators without a vote.

35 The same Repubs who appear to be lining up to ratify a treaty in a lame duck session?

No, they are not the same.

36 That said, what about simply imposing a trustee for fiscal matters: that is, all other Government functions still handled by a Republican form of government, but the budget handed down "from on high" and non-negotiable until the problem is fixed?

Posted by: AllenG

 

We can't get the idiots in Congress to vote anyone's interest but their own. or that of the Dems. look how the precious Republicans parrtoted the Dem party line on DADT. Only the Republicans would be stupid enough to meekly suggest that the tens of millions of people in California be placed under a financial trustee. Watch and see; Obama will use this for his triangulation. he will engineer the buyouts and dare the Republicans to instill any sort of fiscal restraint. Between class warfare, the race card and the sight of evvviiilll Rethuglicans 'punishing California', they will cave. Then watch the other screwed up states get in line.

37

I Wike wardass fatass'es! *drool*

(drops trou)

38 32 What's this talk of California defaulting or even getting bailed out? The state is overflowing with super smart hipsters who will be bailing YOU out once they come out with the newest Apple application that creates millions of green jobs

All with half their medical marijuana laced brains tied behind their backs

Posted by: Bret Arends, Buttboy to Jim Cramer at December 21, 2010 03:41 PM

That's my boy! California has their best years ever coming ahead, so don't dump those munis ....

BUY BUY BUY BEFORE YOU'RE PRICED OUT !!!!!

39 The same Repubs who appear to be lining up to ratify a treaty in a lame duck session?

No, they are not the same.

Posted by: Vic

You're right. Financial matters require only 61. A treaty requires 67. And they appear to be getting it.

40 Posted by: Vic at December 21, 2010 03:42 PM (e4sSD)

Indeed, I expect the Senate Repubs are lining up to ratify START largely BECAUSE of the incoming freshmen: they've heard the call of history, don't ya know.

41 And we keep electing liberals WHY!?!?  See what socialism brings?

42 35 Not likely, but if it became a territory that's 2 lib dem senators without a vote.

Posted by: Guy Fawkes at December 21, 2010 03:42 PM (xQAv5)

I'll still let them vote.

43 Another thing to note: have had a beneath-the-radar federal bailout of the states going for a couple of years now: the "Build America Bonds", or BABs. Munis normally are tax-free, but States bear the back-end cost of providing interest-free gains to the purchasers of the bonds. With BABs, Uncle Sugar covered 35% of this cost, thus allowing states to issue a lot more debt than they normally would have been able to with straight Munis. Well, no more: the BABs expire, and there's no funding for them in the budget going forward (nor is the GOP likely to allow the program to go forward in the new Congress).

44 Maybe CA could be sold to another, more fiscally responsible state and put under that state's administration?

Shit, it's what the feds are doing with banks every day: they sweep in, shut the banks down, and sell them to other, better-connected banks. Of course we end up paying for the losses, but it's only paper, right?

45 Posted by: Blue Hen at December 21, 2010 03:42 PM (R2fpr)

I wish I didn't think you were right.

46 What California voters?  If CA suddenly became a Territory, they wouldn't be eligible to vote any more- unless they moved to a State.

Posted by: AllenG (Dedicated Tenther) at December 21, 2010 03:38 PM (8y9MW)

Yeah but California representatives would get to vote on the vote to make CA a territory. I'm guessing they'd be against it.

47 it's funny...as missile-defense shields are being outlawed, we're worried about a word that Haley Barbour might have said in 1982.

Posted by: Soothsayer

 

Worried? No. Writing him off? Yup. And we're back to the early 70's with a terrible START treaty. And I honestly thought that Obama might have learned something from his pathethic performance in Poland and the Czech Republic.

48

Well, I'm not going to fight and die on my historical comparison to the Civil War.

I remember Lincoln was saying things like "The Southern States have not succeeded from the Union.  That is impossible.  They are in a state of insurrection, and haven't sent representation to Congress, but they haven't left the Union."

But anyway, I'm dubious of this plan to strip California of its Statehood.  It seem like, "what's the point?"

49 The United States shall guarantee to every State in this Union a Republican Form of Government

I don't know whether to laugh or cry.  I do know that my skittle shitting unicorn will kick Cthulhu's ass before the United States returns to a constitutional republican form of government.

50 38

I Wike wardass fatass'es! *drool*

(drops trou)

Posted by: Bwaney Fwank at December 21, 2010 03:43 PM

Taxes ARE punishment, congressman. If you weren't such a pillow biter you'd be lining up to see how Maria can hand out the punishment

51 What kind of taxes do territories have to pay?

52 The standard Lib comeback to this is as follows:

The State of California pays out more in Federal taxes than it gets back in payments from the Feds. Therefore, bail us out, suckas.

53 "I honestly thought that Obama might have learned something from his pathetic performance in Poland and the Czech Republic."

Posted by: Blue Hen at December 21, 2010 03:46 PM (R2fpr)

Oh, my. You previous posts have been remarkably level-headed. Did you fall and hit your head?

54 Maybe CA could be sold to another, more fiscally responsible state and put under that state's administration? Ohhhh, if only Utah would buy them. They would be mopping up exploded brains for weeks afterward.

55 Cal-lee-forn-yah, here I come!

56

AllenG (Dedicated Tenther) at December 21, 2010 03:41 PM (8y9MW)

Comment #49 is for AllenG.

57 Posted by: MrScribbler at December 21, 2010 03:45 PM (Ulu3i)

Speaking as someone with (peripheral) knowledge of the situation: that's a relatively misleading way of describing what the FDIC does.

However, for your main point: who'd want 'em?  When the FDIC does that, if they can't find another bank willing to take over (Indy Mac bank had this happen in 200 the Federal Government has to take over.  We've already pointed out why that would be bad.

58 The problem with reverting California back to territory status is that a large part of it's American born population were born in other states

59 Posted by: Blue Hen at December 21, 2010 03:46 PM (R2fpr)

Oh, my. You previous posts have been remarkably level-headed. Did you fall and hit your head?

Posted by: CharlieBrown'sDildo

 

The fried chicken thread. I barely escaped. But it has effected me. I went to .....pieces.

60

Thank God we have a conservative House.

61 Downgrade California from a state to a territory.

62 Sell California to the Mexicans for a penny an acre. Hell, they're pretty much occupying the place anyway.

63 Posted by: ed at December 21, 2010 03:46 PM (QLhy5)

Yeah, he did.  And we're still ambivalent about President Lincoln down here.  But then some idiot thought things might get better if our only Northern ally got a bullet in his brain-pan, and VP Johnson took over, and got steam-rolled by the rather more vindictive congress.

64 Well Congress could rescind its statehood and make California a territory again until its affairs were in order and then re-admit it A HAHAHAHAHA Of course, I know you weren't really serious. Remember this state is deep, deep ultramarine blue. Two words: Electoral college.

65 Taxes ARE punishment, congressman. If you weren't such a pillow biter you'd be lining up to see how Maria can hand out the punishment

Posted by: Maria Bartiromo at December 21, 2010 03:47 PM

It's hilarious that the DUmmies and the Pitbulldoglake bunch are claiming that Bawney destroyed Maria in that interview

Bawney just huffed out his usual hot air without answering questions. Besides, anyone watching would have given the win to Maria if she'd only sat there putting on lipstick

66 Posted by: ed at December 21, 2010 03:46 PM (QLhy5)

Yeah, he did.  And we're still ambivalent about President Lincoln down here.  But then some idiot thought things might get better if our only Northern ally got a bullet in his brain-pan, and VP Johnson took over, and got steam-rolled by the rather more vindictive congress.

Posted by: AllenG

 

What part of "with malice toward none, and charity toward all didn't you get? oy.

67 The first thing to do is divide CA into 2 states, North CA and South CA, then take RI and give it to CT, keeping the 50 stars.

Then Nuke it from Space, and then divide TX into 3.

Problem solved.

68 Posted by: kbdabear at December 21, 2010 03:50 PM (vdfwz)

So?  They'd still be American Citizens.  IIRC, the exact same thing happened during the Western Progress: people born in the East moved west into the new Territories to find their fortunes.  While their location of residence was a Territory, they couldn't vote in National Elections, as soon as they assumed Statehood, their votes counted again.

In this case, if they wanted to, they could move.

69 So if California became a territory, it would invalidate the California Constitution, the California Judiciary, the Federal Judiciary, and the California Legislature.

Where the fuck do I sign up?

70 navybrat ...  I would point out that basically every state pays out more taxes than they get back in Federal payments since much of Federal spending is not directed back at states but to the military and entitlements like SS ...

71 The first thing to do is divide CA into 2 states, North CA and South CA, then take RI and give it to CT, keeping the 50 stars.

Then Nuke it from Space, and then divide TX into 3.

Problem solved.

Posted by: Guy Fawkes

 

Next:  Reverse Seperation Day, and Delaware is once again the 'three lower counties' of Pennsylvania. Our politics are so fucked up, we might as well.

72 What is being proposed?

1) Strip (via Congressional action) CA of its Statehood
 or
2) Require CA to vote itself back to territory status before receiving bankruptcy status, assistance, etc.

If California is in enough pain, #1 seems unnecessary, as #2 seems easy enough to enforce.

73 "So What Happens When California Goes Bankrupt?"

Well, the voters reelect the same Liberals/Progressives/NoLabelists that bankrupted them, Silly. Was this a trick question?

74 Whatever has to happen to CA, IL, NY, etc., to get their heads out of their asses is going to be ugly, brutal, and violent.  The burning begins in the states and cities that have gone belly-up.

75 Then Nuke it from Space, and then divide TX into 3.

Hey!  My State is off limits (and Relatively sane, let me remind you): How about just convincing Puerto Rico, and The Phillipenes, to apply for statehood?

76 1) Strip (via Congressional action) CA of its Statehood
 or
2) Require CA to vote itself back to territory status before receiving bankruptcy status, assistance, etc.

If California is in enough pain, #1 seems unnecessary, as #2 seems easy enough to enforce.

Posted by: Arbalest

 

#3 all ballots are in English only. Picture ID is required. Federal troops will support the vote.

 

77 73:  My proposal's the second.  Don't know if anyone else has talked it, in these parts at least.  First is way too problematic to pull off, at least without some other extenuating circumstances.

(Which may come about anyway.  Once the services and bennies get cut off, unrest and civil collapse could well serve as pretext for #1...)

78 As long as you still have a credit card where you can charge a cash advance to use to make the minimum payment on all your other credit cards, there's no problem. Trouble only arises when you can't get another new credit card from another new bank.

79 There's lots of combining and dividing that could go on. Northern CA, WA, and OR should be one state, as should the Dakotas, Montana and Idaho, and everything north and east of NY state. THEN place CA under fiscal martial law and have them be run by the US Army and American Express.

80 I think the Philippines have left the station.

81 State sales tax here, with what the county piles on, is 9.75%. State income tax is already pretty damned high. I think Gov. Moonbeam will institute a VAT-style tax. For the children. He won't do a damned thing about the teachers union, the union state workers, etc because he's always been a bag boy for the unions. Then he'll repeal Prop 13, collapse the state's economy completely, and thereby be qualified to run for President.

82 Look, CA is already getting cash from the feds... the $40 million per day loans for unemployment bennies is only one example. Pay it back? Why? Who can make us Clownifornians do it? Every politician needs our ordinary and electoral college votes far too much. CA can just kick the can down the road, it will never outright default. It will "restructure." We are creative here on the western edge of sanity. fast forward to 2012 "Yes, Mr. Bondholder, you can redeem your matured bond if you like, but could you wait just another ten years? We promise to make it up to you. It's just that if you redeem now there's this new emergency tax or redemption fee of 50%, so if you could just wait a bit. Don't you love our weather?" "So you don't want to take our CA state government credit cards or sell to us on government account, Mr. Retailer? You'll only take cash from us? Well, we may just have to get an injunction against you in court to prevent you from doing any business at all in CA with anyone, because you're preventing government from acting in the public interest, or something. We'll make it up as we go along and get judges to help us. Anyway, sell us stuff on our terms or we'll get our courts to force you out of business altogether in CA. We have all the guns and police, remember. Don't you love our state's scenic beauty?"

83 72. NO WAY! Uh . . . sorry, we DON'T want Delaware back! How about instead you guys take Philadelphia and Delaware Counties?

84

#3 all ballots are in English only. Picture ID is required. Federal troops will support the vote.

Posted by: Abraham Lincoln ( i save the country and my memorial doesn't even rate a door? at December 21, 2010 03:58 PM (R2fpr)

An option, but probably unnecessary, as anyone able to move to Mexico or points south will likely have already done so.

85 Plus, if Cali is a territory then the Repubs are a lock to win the Presidency. Let's do this!

86 1 Wow, Maetenloch, that idea of stripping a state of its statehood and reverting it to territorial status blew my mind a little.

Posted by: ace at December 21, 2010 03:21 PM (nj1bB)

Indeed. Imagine that, say, just before 2012 elections. Bwah ha ha.

Oh, no wait, imagine Nancy Pelosi being escorted out since she no long represents a state of the union? lol!

87 @71 excellent point, and I agree.

Such rationale is lost on the proggies.

88 Posted by: Randy, a CA resident at December 21, 2010 04:01 PM (D0PNd)

Maybe we could get, as one last act of charity to California, the Federal Government to buy everyone in every other state a year's supply of popcorn.

89 Let Germany take over California--they founded San Diego, if I'm not mistaken.  They could inject a sense of fiscal responsibility, the spirit of hard work, quality ski resorts, and high-quality highways. 

90 Oh, shit. What if Obama has designated us as collateral for all that money from China? At least we'd get some manufacturing back...

91

The standard Lib comeback to this is as follows:

The State of California pays out more in Federal taxes than it gets back in payments from the Feds. Therefore, bail us out, suckas.

Yeah, but what makes it such a stupid argument is that if every state "got back" as much in federal spending as it's citizens paid out in federal taxes, there's be no money left over for the actual federal government functions such as national defense.

California made this mess all on their own; it wasn't the Feds who directed them to go on a hiring spree while also agreeing to outrageously expensive employee benefit packages.

92 Well a big fuck you to all you gloaters. You think every voter in California is a leftard? Guess again, assholes. And when something bad happens to you and yours, expect me to be cheering for your own personal demise. Lose your job? Fuck you, you had it coming. Lose your house? Fuck you, you deserved to lose it. Your kid gets sick? Fuck you, you had it coming. How easy it is to act like you assholes....

93 You will know that a city or state has gone into a death-spiral when they issue new bonds (debt) to pay off other, maturing debt. This is the governmental equivalent of using cash advances on one credit card to pay the minimums on another credit card -- it's the terminal phase before collapse. Illinois is already at that point, pretty much, and California might be -- their numbers are so fudged and screwed up that it's hard to tell. That's another rule I would put in place for any states to receive federal aid: they have to conform to the same GAAP rules that American companies do. They'd have to release transparent, actuarially-sound, and GAAP-approved statements at the end of every fiscal quarter. They'd have to meet certain benchmarks (though what the punishment for *not* meeting them is, I don't know). The reason that states and municipalities have gotten away with these unfunded entitlements and bond-issues for so long is because they don't have to use the same accounting rules as companies do.

94 It's easy to set up California as a territory; try doing that to Illinois--avaricious Hoosiers, cheese-intoxicated Wisconsinites, and ethanol-seeking Iowans will descend on the state like so many Yankee carpetbaggers. 

95

I think state bonds are (relatively) safe. It's munis you have to worry about: big cities like L.A., San Diego, San Francisco, Chicago, New York, etc. are deeply in hock in munis, and will have to roll that debt soon.

This is how I see it also. Remember that state general obligations are backed by the state's full faith and credit, which means they must raise taxes to fund debt service. It isn't even contestable. So raise taxes they will and they will pay. And they will cut services, but of course there will be less tazpayers to service since they'll bolt. Long-term problem, not a crisis.

General obligation bonds do not and will not be "worth zero". If they couldn't raise taxes and cover debt service, they'll just restructure the debt and you'll get, say, 65 cents on the dollar.

BAB's are a wash. The state foregoes the tax-free status of their issuance so they pay more in interest. But the Feds subsidize that. The difference to an issuer between the net cost of the subsidized bonds or their own lower interest tax-free bonds is minimal and doesn't have much to do with the decision to issue bonds. There are fewer restrictions on what you can do with the proceeds if you go the BAB route.

The real knock on BABs is that the Feds get their fingers in your pie and by subsidizing you, they control you.

96  I know the answer!

Monorail !

97 ace: "Wow, Maetenloch, that idea of stripping a state of its statehood and reverting it to territorial status blew my mind a little."

Not a problem. We'll name it Northwest Aztlán. Or Cannabistan.

98 Actually, due to inflated property prices, California underpays income tax to the federal government.  High property taxes and the mortgage interest deduction reduces the aggregate taxable income of Californians. 

99 99:  Wait, weren't those mortgage interest deductions on the chopping block recently...?

That would have been a sight to behold...

100 It'll be an interesting experiment, seeing how liberals react to the meltdown of their welfare-state in California and Illinois. Bond debt is senior to a lot of other debt in these states, which means that in order for bonds to get paid, liberals are going to have a lot of their pet programs canceled outright or severely scaled back. A case in point: retiree expenditures (pensions + healthcare) are already pulling money away from the California university system. So you have one entrenched liberal interest-group (public-employees and their unions) against another liberal interest-group (academics, teachers, and their unions, not to mention students who must now pay higher tuition costs). As California is now almost unanimously Democrat in its politics, there is almost no other alternative than for them to turn on each other at this point.

101

Let Germany take over California--they founded San Diego, if I'm not mistaken.  They could inject a sense of fiscal responsibility, the spirit of hard work, quality ski resorts, and high-quality highways. 

Yeah, but think of what would happen to the CA porn industry.  That might be a dealbreaker.

102 Good post at Mish's on the BABs that Monty mentioned.

Like he said, there's already been a running bailout of the states through BABs (along with the feds backstopping extended unemployment insurance payments and God knows what else).

The music's about to stop playing, and California, Michigan, Illinois, Massachusetts, etc. are going to find themselves without a chair.

103 Pr0n and marijuana. Our great exports.

104 California is the large malignant tumor that nobody will cut out, and now it's metastasizing.  It's probably too late, nothing will be done which must be done, and the politicians will keep hoping for a miracle to make it all go away. 

105 I say just let the US House cut off all fed funding to CA until they get tired of wallowing in their own shit.  Let them riot.  Let them burn.  Maybe enough of it could self destruct to allow a little sanity to return.  But I dream.

106 The real knock on BABs is that the Feds get their fingers in your pie and by subsidizing you, they control you. Well, not really, in my view. The real problem with BABs is that they let the municipalities take on a lot more debt than they otherwise could, due to the federal subsidy.

107 Kalifornia Hinter Alles

108 As California is now almost unanimously Democrat in its politics, there is almost no other alternative than for them to turn on each other at this point. Posted by: Monty at December 21, 2010 04:10 PM (cIqas) JUGULA! JUGULA!

109 Posted by: Andy at December 21, 2010 04:11 PM (5Rurq)

I hope Michigan dodges that particular bullet: they just implemented some sliver of sanity with their own elections in November.  It would be good to see them rewarded (relatively speaking) for their belated good sense.

110 >> BAB's are a wash.

Spongeworthy, read that post I linked at 103.

The writer makes a good case as to why this was a fallacious assumption.

111 As California is now almost unanimously Democrat in its politics, there is almost no other alternative than for them to turn on each other at this point. Are you not entertained?

112

That's another rule I would put in place for any states to receive federal aid: they have to conform to the same GAAP rules that American companies do.

That would be silly, since businesses are very different, customers and taxpayers being very different also. State and local governments have GAAFR, which is every bit as stringent as GAAP, if not more.

113 Actually nothing will happen to Illinois or California - the Federal Government will continue to borrow more money to purchase state debt.
Nothing will change except the day of reckoning will be pushed back and will ultimately be much worse. We have already  become Venezuela. Our next stop is Zimbabwe.

114

Tupac really nailed down California's future...

115 You will know that a city or state has gone into a death-spiral when they issue new bonds (debt) to pay off other, maturing debt. This is the governmental equivalent of using cash advances on one credit card to pay the minimums on another credit card

It allowed us to pay off our loan years ahead of time and snooker the American people with a sappy tv commercial. The MFM goes along with the scam, so who'll be the wiser other than you unpatriotic Beck worshipping wingnuts

116 I have posted to this effect before, as I live in No. Ca.

Yes, CA is in deficit, up to 28 billion depending on what you read.

Where the hell do I move to get away from the 14 trillion dollar FEDERAL debt?

Costa Rica? Belize? Switzerland?

117 Are they going to auction off California's assets?  I got dibs on Katy Perry.  And Napa Valley. 

118 Posted by: navybrat at December 21, 2010 04:15 PM (zBUlJ)

I understand Nicaragua is nice.

119 We have to be worth something in an auction, right? We're unforgettable!

120
And I honestly thought that Obama might have learned something from his pathethic performance in Poland and the Czech Republic.

Now who's being naive, Blue Hen?

121 State and local governments have GAAFR, which is every bit as stringent as GAAP, if not more. Alas, no. GAAFR lets states hide a lot of shit because, e.g., they can always fall back on the 'we can tax the plebs' argument. The tax-power is bullshit, because it makes assumptions about future income that has a lot of imponderables to it (i.e., the willingness of the plebs to allow a tax to be placed on them). Also, GAAFR until recently did not count pension and healthcare obligations as "debt", which kept a lot of that bad shit off the books. (I think it's still that way, but I might be wrong.) If states and cities were forced to account for pension and healthcare obligations as debt in the same way that companies are, they'd go insolvent in a millisecond. (Which is probably why no one wants to do it; that looming mountain of entitlement debt scares the shit right out of everyone. No sane tax-regime in the world is going to make that debt-load good.)

122 You will know that a city or state has gone into a death-spiral when they issue new bonds (debt) to pay off other, maturing debt. This is the governmental equivalent of using cash advances on one credit card to pay the minimums on another credit card

Good thing I never have to deal with that. Now if you'll excuse me, I have to order more rolls of paper and green ink. Oh, and helicopter fuel

123

Speaking as a native Californian,

If California just decides to default on their debts, its not some nameless or faceless country that gets the shaft.  Its other states, and Californians themselves.

California owes a relatives business money, and that is happening all over the state.  Public employees absurd pensions? go ahead with that.  Stop paying it.  There will be dancing in the streets.  During this horrible recession (its around 13% officially, over 20% when you count people who 'gave up'.. whatever that means)... well during this recession, the teachers and every other public employee hasn't suffered AT ALL.  They live in a bubble.  They've been getting their raises every six months during this horror, and none of them can be fired.

So the effective unemployement rate in CA is:  Public employees: 0% unemployment.   Private:  Probably ~40% total.  Thats why people like myself are so fucking mad.

I've got a teacher in my family, and she complains when she's made to pay a co-pay when she visits the doctor!  You'd think the world was ending!  I've got to pay a $30 co-pay, and an absurd amount of money for insurance every month.. which they don't.

The Public employees simply don't get it.  They don't know what a recession IS.  They've never experienced one.. although they complain that 'its tough out there'... ggrrrrr.   These are the liberals California has become infamous for too.  Live in a bubble, teach class on weekdays, and go shopping every weekend.  Thats the truth.  I've seen it myself.

I can't tell you the last time I WENT SHOPPING.  When they complain about how horrible republicans are because they might freeze their pay (in the past), I bring up all these facts about myself and how the other half live and that they should be damn thankful for everything you've got!

They will usually change the subject, and I'll later find out that they were talking behind my back that i've (fill in latest liberal meme here).

 

Its shocking.  Its unexplainable.  even the governor elect moonbeam had a meeting with the teachers and their union and they STILL were proposing new programs, until Bill Locklier (D) treasurer stood up and told them they must live in a fantasy world because he's talking 25% cuts across the board.. at a minimum.  The room went silent, but later on they talked as if they heard nothing.  The union has brainwashed them and I honestly don't know what the hell is wrong with these people

Thanks for reading from a native californian who knows wtf he's talking about!

124
Well a big fuck you to all you gloaters. You think every voter in California is a leftard? Guess again, assholes. And when something bad happens to you and yours, expect me to be cheering for your own personal demise. Lose your job? Fuck you, you had it coming. Lose your house? Fuck you, you deserved to lose it. Your kid gets sick? Fuck you, you had it coming. How easy it is to act like you assholes....

hahahaha, I'm suing you for copyright infringement!

125 So how much might it cost to fence the border with 20' high chain link topped with razor wire and put in say a 300' deep mine field to contain the contagion?  Might need guard towers every half mile or so with machine guns to mop up any leakage so that'll raise the cost a tad.

Might be the best "infrastructure" investment the rest of the nation ever makes.  I'm just saying...

126

The writer makes a good case as to why this was a fallacious assumption.

No, he doesn't. He explains why it isn't a wash to the taxpayer. My point is that it is virtually a wash to the issuer, and isn't driving issuance to any great degree. At least the subsidy isn't.

Look, as Treasurer of the Moonachie Water Authority, I can issue 8% bonds and get 35% of the interest paid by Uncle Sam--those are my BABs. Or I can issue 5% bonds without a subsidy, but with a lower interest rate because they are tax-free. Oh, and it isn't even my money but my ratepayers. Pretty close to a wash, no? And that's what the market looks like right now and pretty much has since the BAB prgram began.

 

127 The idea that the Federal government could strip a statehood away is so far from constitutional I'm not even sure why it was brought up in the Bainbridge comments.

The only way a state could revert to a territory would be by the state legislature amending the state constitution and petitioning Congress to change the status.

128 >> If states and cities were forced to account for pension and healthcare obligations as debt in the same way that companies are, they'd go insolvent in a millisecond.

I'd stop short of giving U.S. GAAP too much credit in this regard. While it's better, Rosy Scenario is still the head pension accountant at every company with a defined benefit plan.

The main reason most companies don't have this huge overhang is the 401(k). Unionized ones like the automakers, airlines, etc. that have to carry big DB plan obligations strangely seem to go bankrupt on a pretty regular basis and offload this turd onto Uncle Sugar (i.e., the PBGC).

129

John Frum, I'm truly sorry.  California is one of my favorite destinations, and I have many friends and family there.  Unfortunately, decades of mismanagement have ravaged California--if it were a car company, I'd liken it to Studebaker.

If you're truly in the market for a good state, come to Virginia--we have four seasons, good beaches, wine, skiing, crabcakes, and a badass attorney general.

130 The scenario you described in the post seems most likely to me. But we've already had modern day examples of 'investors' getting screwed on a default. Does GM ring a bell? Government took over GM and basically defaulted on anyone that had GM stock. whats the real difference with California here? State vs company. The Federal government will just let it slide after massive bailout attempts first.

131

I have posted to this effect before, as I live in No. Ca.

Yes, CA is in deficit, up to 28 billion depending on what you read.

Where the hell do I move to get away from the 14 trillion dollar FEDERAL debt?

Costa Rica? Belize? Switzerland?

Think of the federal deficit as your mortgage, and the state budget as a car payment.

Struggling to make a mortgage payment for a place to live might be tough, but doing it while also trying to make payments on a new Ferrari is what'll break you.

132

@67: Abraham Lincoln ( i save the country and my memorial doesn't even rate a door? at December 21, 2010 03:54 PM (R2fpr)

1. Who said the country needed saving?

2. The Alberto Fujimori "Me take Constitution, thow out window" approach toward "saving" it paved the way for the modern leviathan.

So yeah, thanks.

133

If states and cities were forced to account for pension and healthcare obligations as debt in the same way that companies are, they'd go insolvent in a millisecond.

But that would be silly, wouldn't it? I mean, we both know what happens if a company begins building in pension costs to its cost structure, right? Goodbye, customers, to competitors who don't account that way. That's why companies need to have uniform accoutning methods, for an even playing field.

But taxpayers can't flee to other companies. They can flee, bit it is a long-term phenom, not like the instant market feedback in free enterprise. That said, I cannot tell you how many OS's (prospectuses) I have read that raise serious red flags over pension obligations, and they are trying to sell me their bonds, too!

GAAFR standards have been modified to better account for pension obligations. Otherwise we'd probably know nothing about them!

134 Personally, I don't give a fat rat's ass what California does, as long as I don't have to fucking pay for it. They dug their hole, let them handle it. And anyone dumb enough to invest money in the State of California deserves to get their ass reamed.

135

@67: Abraham Lincoln ( i save the country and my memorial doesn't even rate a door? at December 21, 2010 03:54 PM (R2fpr)

1. Who said the country needed saving?

2. The Alberto Fujimori "Me take Constitution, thow out window" approach toward "saving" it paved the way for the modern leviathan.

So yeah, thanks.

Posted by: Fa Cube Itches

3. There was that awkward firing on Ft. Sumter in there somewhere.

136 My guess is a series of rolling defaults by local municipalities.  Bondholders might eventually be made whole, but the effective maturity date of your paper might be extended by 10 or 20 years.  Something akin to the '94 Orange County default, but on a massive and protracted scale.

Having made a prediction, I would also add that making these predictions is a waste of time.  The unintended consequences of something like this are incalculable and you still have the problem of a structural deficit that has no politically feasible solution.  Defaulting on debt will only delay the inevitable. 

The whole country isn't going to band together to stick it to California, not when the bulk of the populace lives in states that are in a similarly boned situation.  The California electorate is not going to impose draconian austerity measures on themselves.  I'm afraid we're in a bit of a pickle.

137 As of 2pm today, the Fed has bought more than $1T of Treasury debt.
We're Saved!

138 If the federal government can make fiscal decisions for a state through legislative, executive, or judicial fiats, what power is there in a "guarantee" clause? The states are already denied a republican form of government.

139 But, you know who really loses when Cali goes down the shithole .... Mexico.

Lets give it back to Mexico...in exchange for favorable prices on fine liquid Pemex products.  I'm just thinking out loud here...

140 Rosy Scenario is still the head pension accountant at every company with a defined benefit plan Hah! That's a good one, and very true too. Most pension committees I've seen still project 7.5-8% return rates on their funds, even with all the evidence out there that 4.5-5% is the more-accurate "safe" rate of return (and I'd peg it even lower, at 3.5-4%). The difference, though, is that even companies with DB plans still have to fund those plans more aggressively than states or cities do; states and cities can skate on a promise to raise taxes if the investments don't perform as expected. Left unsaid, of course, is how they plan to fill holes of tens of billions of dollars -- as is the case after the Great Recession. You'd need ten years of stellar returns in the 8-10% range to "smooth" that hole away, and I think those kinds of gains are very unlikely in the world economy going forward. Every indicator I've seen is that (at least in the Western industrialized world), growth rates are going to be very slow indeed.

141 @138- Yeah.  Blame John Brown.

142 Not to mention the fact that this would be hugely unpopular with California voters and their representatives.

Pardon my French, but FUCK the California voters. The majority of them keep on voting for the same tax-and-spend politicians over and over. They re-elected that moron Barbara Boxer. They put Jerry Brown into the governor's office again, for a third time.

143 the Fed has bought more than $1T of Treasury debt

So I guess that'll be the end of the QE currency devaluations, eh?

144 Watching cCalifornia voters is like watching an imbecile play with a loaded gun.

145 I can see the CA advertisements now, trying to attract people to the state:  "If your horny, come to California.  We'll fuck you good.  We'll fuck you real good".

146 Hey, Joe! We sooo hooney. We love you longtime!

147 Posted by: maddogg at December 21, 2010 04:37 PM (OlN4e)

Except you can step in to stop the imbecile before he hurts himself or anyone else.

148 Pardon my French, but FUCK the California voters.

The smart ones already beat feet and fled 20 years ago when the handwriting was on the wall.  This is what happens when you let retards run a state.

149 P.A. this is what I am talking about. There is NO ultimate accountability as long as we are on a fiat monetary system. They can just print the bills up and pay us. As a matter of fact, the Feds have been doing precisely that, to the tune of 40million a day in "loans" to California.

We are way down that rabbit hole.

150 so the fed basically putting california into receivership until their finances were in order, wouldn't be popular with voters and residents there.

I'm thinking of a phrase and it rhymes with Too Fucking Bad.

151 California's going to be fine, we just passed Cap & Trade which is going to create a few million new Green Jobs.  Nothing to worry about here.

152 What are the chances they sell off everything? Snow Crash time,baby!

153 You will know that a city or state has gone into a death-spiral when they issue new bonds (debt) to pay off other, maturing debt. This is the governmental equivalent of using cash advances on one credit card to pay the minimums on another credit card -- it's the terminal phase before collapse. Illinois is already at that point, pretty much, and California might be -- their numbers are so fudged and screwed up that it's hard to tell.

Municipalities have been doing this for 25 years.  They're called "pension obligation bonds."  It was a good pitch at the top of the market, borrowing money at 5% to make 10%.  Doesn't work so well when you've borrowed at 5% to make 2%. 

154

@138: "3. There was that awkward firing on Ft. Sumter in there somewhere."

Hmmm, yeah, in the middle of sovereign waters which you were sending munitions.  That's an act of war, pal.  That little nugget frequently gets omitted.

Plus, you still haven't explained why the country needed "saving."  The United States was at no risk, it was just smaller.

Pretty funny that a guy who speechified about "government of the people, by the people, and for the people" wasn't exactly down with the concept in practice.  "The people" voted themselves out of the union, after all.

155 I love San Diego and wouldn't want to live anywhere else but we are in desperate financial trouble in this state and no one in government has the balls to do what needs to be done.  I can't see anything but disaster ahead.  This time the unions will turn on each other because there is no other choice.  We also have the glorious Global Warming Initiative that the new Democrat AG will enforce vigorously. If it's possible we will hemorrhage even more jobs.  All this and you know what the LA County Board of Supervisors debates for 9 hours two weeks ago?  Fucking banning plastic bags and making people pay 25 cents for a paper bag.  WTF??

156 What are the chances they sell off everything?

I'll give'em a $1.50 for Torry Pines state park.

157 @157 I appreciate what you have pointed out, but any adherence to past rules or practices have been casually thrown aside in the last couple of years.

Rules are for Republicans.

158

@161: "All this and you know what the LA County Board of Supervisors debates for 9 hours two weeks ago?  Fucking banning plastic bags and making people pay 25 cents for a paper bag.  WTF??"

Hey - Soviet Monica imposed a leaf blower ban in about the same timeframe, too.

I love the whole plastic bag thing.  The only reason we have them at all is because the watermelons (green outside/red inside, not racial thingy) said that paper bags killed too many trees.

159 Municipalities have been doing this for 25 years. Yep -- San Fran is next on the list. Basically, the city government morphs from a governing body to a pension committee for city retirees. Kind of like how GM was basically a pension and healthcare firm that had a money-losing sideline in making cars. The problem is going to become acute when services are slashed and taxes go up -- I think that there's a limit, even in California, to the amount of bullshit up with which people will put (or pay for).

160 Nothing is really theirs to sell.

Roadbed and right of ways for all the state highways.  Sell all that shit to someone willing to put in toll booths and do the maintenance.

Trim back the borders of state parks by say 500' and sell off high priced "elite" building lots.

There's lots of things that could be done if there were any will to do something.

But that's the problem, there is no will, because CA is a universe where the fundamental laws of physics are different.

161

Its shocking.  Its unexplainable.  even the governor elect moonbeam had a meeting with the teachers and their union and they STILL were proposing new programs, until Bill Locklier (D) treasurer stood up and told them they must live in a fantasy world because he's talking 25% cuts across the board.. at a minimum.  The room went silent, but later on they talked as if they heard nothing.  The union has brainwashed them and I honestly don't know what the hell is wrong with these people

Comes from living in an environment in which there are no wrong answers.

162 State and local governments have GAAFR, which is every bit as stringent as GAAP, if not more.
Spongeworthy
__________________________

Uhhhh, Spongeworthy, if GAAFR is so god*amn  'stringent'  as you allege, then how the hell did CA become bankrupt seemingly overnight without GAAFR giving us the appropriate warning signs??????

163

Hey - Soviet Monica imposed a leaf blower ban in about the same timeframe, too.

I love the whole plastic bag thing.  The only reason we have them at all is because the watermelons (green outside/red inside, not racial thingy) said that paper bags killed too many trees.

I remember the anguish the bunnyhuggers had in trying to decide which was better- plastic bags that weren't biodegradable, or paper bags made of trees.

It was mostly during the aftermath of the "garbage barge" drama when everyone started freaking out because lefties kept repeating the myth that we were running out of landfill capacity.

164

Comes from living in an environment in which there are no wrong answers.

Posted by: Randy, a CA resident at December 21, 2010 05:00 PM (D0PNd)

 

Yeah, that "New Age" horseshit is showing everyone that moral relativity has a high price.  Like I said.  California can go fuck itself.  It's a relative thing.

165 California's going to be fine, we just passed Cap & Trade which is going to create a few million new Green Jobs.  Nothing to worry about here.

Thank you, Arnold Schwarzenegger.

166 Hmm.  Bennie tells Timmie to print up a trillion or so and send a few billion to Jerry.  Jerry sends some bonds to Bennie who puts them in a box.  Everything fixed and until there is an audit.

167 Late to the party, but I would say no to reducing California to a territory.  Once they're a territory, they'll still be eligible for federal goodies as US citizens, but they'll pay no taxes, a la Puerto Rico.  They'll never rejoin the Union, and become a permanent money black hole.

168

@169: "Comes from living in an environment in which there are no wrong answers."

The fuck you talkin' 'bout, "no wrong answers," Willis?  Every election we reiterate that the convservative answer is wrong.  Every election we reiterate that the common sense answer is wrong.  Every election we reiterate that Charles Fuckin' Darwin was wrong. 

169 Oops, wrong sock.

170

@172: "It's a relative thing."

No, that's our bit, not California's.

171 For starters, it seems bankruptcy should require CA to return to the basic concepts of the Preamble, promote the general welfare (not welfare of unions, politicians, greens, attorneys and the poor in specific but everyone's welfare), preserve liberty to ourselves and posterity (no more buying today's votes by enslaving future generations to pay for it), etc, etc. 

172

Yeah, just give CA to Mexico.

Then my house would be in Mexico already and I could retire and would not have to buy a house in Mexico where I can afford to retire.  Que Bueno!

173 We're boned.

174

CA = Buffalo X 150

Only worse. Buffalo ended up with a control board, which CA apparently can't. They would have been better off with bankruptcy, though.

It's worth noting that - like Buffalo - CA is not only "stuck on stupid" - it's more like "they have monuments to stupid". Note that, despite all the congressional seats that are changing hands, not one House seat changed hands in CA (out of 53!). They kept their Democrat senator, and not only went with the Democrat for governor, but brought back a previous governor, who presumably helped create their situation!

175 Privatize it.  CA^google

176 Of course it does snow in that region in December.  I've been hiking there in summer, and there is usually plenty of snow about.

However, the interesting aspect of the story is that 10 years ago the global warming alarmists were predicting that our (Australia's) skiing industry would be gone in ten years.

177

It gets even better than that. Radical SF Gay leftist Mark Leno has been trying to ram thru SB810 which will ban all CA private health insurance  and force everyone into a Mediciad pool run by the SEIU ( DMV crowd) and tax all CA citizens. This radical plan has the full support of the SEIU and the Marxist Cal Nurses Union  . Yes the CNA which cooked up the Gloria Allread  phony illegal scam .  Moonbeam was put in office by the SEIU and CNA.

Once this sucker get passed it will be a 200 billion dollar " Thelma and Louise moment . Off the cliff and Good Bye Commiefornia !

178 Oops.  Wrong site. Too many tabs open.

179 In the early 1990s, Stan Statham, then an assemblyman from Redding, embarked on a quixotic campaign to split California in three.

To his surprise, there had been 26 other attempts to break California in pieces.

In the end, the campaign became a kind of national running joke about the wackiness of California.

http://tinyurl.com/2a3quck

180 3
1. Who cares?

2. Fuck 'em.

Posted by: Soothsayer at December 21, 2010 03:25 PM (uFokq)

3. In the ass

4. Hard

181 Schwarzenegger was a lot better when he drove a bigass Hummer and had an actual penis.

182 Pay the fuckers in Zimbabwe dollars and then shoot them in the head.

183 My prediction is Moonbeam crushes the unions, and cuts spending. Nixon to China thing. This has happened in many countries when they finally go into financial death spiral, the lefties actually become fiscal righties.

184 How much is the entire Redwood Forest worth to the logging companies?

185 tack on interest to those bonds and it's a 5 or 6 billion $$ boondoggle. but hey, we showed the biblehumpers, and good.

186 A lot of the Cal. problems can be traced back to SCOTUS decisions in Baker v. Carr and Reynolds v. Sims. The former allowed the courts to muck about in political questions, such as apportionment. And the latter required the upper houses of state legislatures be apportioned by population instead of, say, counties. The rural counties used to act as a brake on the populous areas in the Cal. State Senate. But no more. Not for a long time.

187 Why worry: don't they lust for la reconquista? Just let 'em go. Remember what Johnny Carson told us: California is like a bowl of granola. After you get rid of the fruits and nuts, all you have left are the flakes.
Is there a way we can send New England back to Canada with the other Loyalist Subjects?

188

Great post, but I suspect that it contains an important though technical error. It is difficult to demonstrate, perhaps even to indicate, that a state is bankrupt due to insolvency, where its debts exceed the economic value of its assets. The primary economic asset of a state is its power to tax. Admittedly, valuing that asset is very iffy. In this case, I suspect that California's capacity to tax is sufficient to pay its legal debts. This is why I believe that states should NOT get bankruptcy protection and also why states should NOT be bailed out by the federal government. If California can pay its debts simply by taxing its own citizens to pay for what those citizens have approved at the voting booth, why in the world should the citizens of other states contribute a dime. (Of course even if California cannot pay, there is no reason for help from those in other states whose citizens have not got any of the benefits (joke here) of California's profligacy.)

I understand full well that California will probably elect not to tax its citizens to its capacity and so will default when there is no fiscal necessity to do so. That will lead to bankruptcy due to illiquidity, the inability (or unwillingness) to pay debts as they come due. Without the protection of the bankruptcy law, California will be denied access to the credit markets for decades and will be forced to live within its means. In the case of Pennsylvania, which defaulted on its bonds in the 1840's, my recollection is that it was denied access to credit markets until it actually paid off its bonds with interest. (I may be wrong; it has been a long while since I looked at the Pennsylvania experience.) It would actually be amusing if California's bankers eventually get paid in full but its public employee unions do not, but times have changed since the 1840's.

People forget that bankruptcy is both an economic situation and a legal process. The basic aim of the legal process is to eliminate the economic situation and to permit the debtor to get on with his or her normal life. No one sane should want to enable California to get on with its normal life. 

I say, "NO BANKRUPTCY RELIEF FOR PROFLIGATE STATES."

189

Asics running 

Asics running shoes 

Asics gel   

Asics tiger

190 California is in the that it is because of too many give-aways, particularly illegal aliens.  Their school system, public health, and welfare programs are killing the state....English as a second language and practically free college tuition at the 106 community colleges throughout the state are going to sink the state's budget.   Tuition at community colleges needs to be raised along with overhauling the pension system for police, firefighters, and correctional officers would also save billions.

191 It's right here that yesterday in Bible study we were discussing what evil angels do, and the topic came around to discrimination. I said there are two kinds of research paper discrimination. The first is what we think of usually - when we make judgments based on what doesn't matter, like not voting for somebody because of their race or gender research paper. That's bad discrimination. But there is discrimination that's good and necessary. For instance, "You have no way to pay this loan back; therefore I'm not going to give it to you." When we don't properly discriminate, evil thrives research paper. I explained that the KGB wanted to get rich, powerful people in media, education, and business to believe it would be good to have a society with NO discrimination research paper. That doesn't just mean we don't have the bad discrimination, but also that we don't have the good discrimination. So there's no difference between those who work and those who don't, research paper those who make sound choices and those who don't, etc. Everyone is guaranteed the same outcome regardless of what they do. Nothing we do matters research paper. That's what communism is, and people who live under it often end up alcoholics or an average of 6 abortions in their lifetime. If what we do doesn't matter, we lose the will to live. That's the legacy of communism research paper. I mentioned that Yuri Bezmenov was amazed at how the openly-communist folks from the '60's are in control of media, education, and business. And wherever someone totally controls the flow of ideas research paper, it's ripe for the devil and his surrogates to lie and deceive. As long as the realities of life and the truth are observable to everyone, we're not going to wander too far from reality research paper. But when the truth is hidden, people can't learn from reality. Then I made my fatal error. I mentioned that all of the news companies have the proof that Obama is a member of The New Party - a branch of the Democratic Socialists of America research paper. I was going to say that they won't let anyone know that truth research paper. We can make our choices for whatever reason we think best, but when someone needs to deceive us, evil is at work and we need to watch out. Before I could finish, though, a lady jumped up waving her arms and shouting that we shouldn't talk about this in church. Church is for how we're supposed to become better people research paper. Then she and her husband stormed out. Later, someone commented that the devil can work wherever he wants to, and if we refuse to consider his role in any area of our life, we give him free rein there research paper. Another added, "I think it was clear that the devil was right here in Bible study - and didn't like being recognized." It's right her