"In the contest to be America's most spendthrift state, New York and California are typically ahead of the pack. But here comes the not-so-Golden State charging back into the lead. Last week, Governor Arnold Schwartznegger announced he will declare a 'fiscal emergency' in January, which he said has become a 'common thing in California'. ... The bean counters in Sacramento are now projecting the state's budget deficit at $14 billion, and climbing. ... State outlays have nearly tripled to $142 billion this year from $51 billion in the early 1990s. ... California is also losing many of its most productive workers. Over the past decade nearly 1.5 million more Americans fled California than arrived; 275,000 left last year alone, according to Census Bureau data. An influx of foreign immigrants has maintained the state's overall population, but those departing include upwardly mobile middle-class families moving to lower-tax states with more affordable housing", WSJ, 28 December.
How nice of the WSJ to tell us Californians follow Lenin's dictum and "voted with their feet". At its current rate in 15-20 years no one will live in California except: venture capitalists, movie stars and illegal aliens. This shouldn't bother the "open borders" WSJ. Who does the WSJ think uses California's government services? Fortunately, California does not have its own: currency and Helicopter Ben, yet, to balance the budget, with inflation.
How nice of the WSJ to tell us Californians follow Lenin's dictum and "voted with their feet". At its current rate in 15-20 years no one will live in California except: venture capitalists, movie stars and illegal aliens. This shouldn't bother the "open borders" WSJ. Who does the WSJ think uses California's government services? Fortunately, California does not have its own: currency and Helicopter Ben, yet, to balance the budget, with inflation.
3 comments:
So what do you know about munis?
I've got some Calif AAA insured munis. I know the insurance is worthless, but I understand these are "pre-refunded," meaning the municipalities have already set aside dedicated, escrowed funds to pay off the bonds. That means I'm OK, right?
I never heard of a pre-refunded muni bond until today. You write, "That means I'm OK, right"? I think you're asking: will I get paid. Bearing in mind, I dislike all bonds, I conclude you will be paid ahead of other California muni bondholders because it will be easier for the bond issuer to default on other muni bonds than to alter your escrow arrangements. My information source about "pre-refunded" munis was "Bond Perspectives" From Morgan Stanley (MS). MS states, "the issuer uses the proceeds of the new deal to purchase U.S. Treasury securities and places these securities in an escrow account. The proceeds are then used to pay interest and principal on the original debt until the bond is called". I have another muni bond post coming in a few days.
Due to the gerrymandering of willie Brown and others california state government is incapable of addressing any of the major problems facing the state.Incumbents are reelected something like 98% of the time and thre is no competition within districts.LBJ would whistle in admiration were he alive.
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