Saturday, November 21, 2009

LA Times on California

WC Varones (WCV) has a 2 November 2009 post which refers to a 1 November 2009 Los Angeles Times opinion piece. Here's a link to WCV's post: I was surprised "LA" Times printed it too. Even LA Times apparently recognizes that California's current tax and spending policies are unsustainable without federal help, "California's public sector has pinned its hopes for avoiding fundamental reform on increased federal aid to replace dollars the state's fed-up taxpayers refuse to surrender. In other words, residents in the other 49 states--the new 49ers?--would enjoy the privilege of paying California's taxes". Why not? Californians pay Mexico's taxes? Steve Sailer (SS) at Vdare sees this article on 6 November 2009, much the way I do, link: SS notes, "The concept that Latinos don't earn enough to pay for an expensive government is pretty obvious, but it's just off the radar screen. The liberal media just see more NAMs as more justification for more government spending and more votes for government spending". Yes SS.


Anonymous said...

Oh the blind leads the blind...

New York governor sees risk of California bond default
November 13, 2009 | 5:30 am
Besides understanding his own state’s finances, New York Gov. David Paterson apparently has an excellent grasp of California’s fiscal situation.

So much so, in fact, that Paterson feels confident speculating publicly about the probability of California eventually defaulting on its municipal bond debt.

In a Bloomberg Radio interview on Thursday, Paterson described his plans for dealing with New York’s financial woes, and why it was important to avoid budget "gimmicks which grind up your credit rating."

New York still has an "AA" credit rating from Standard & Poor’s, compared with California’s "A" rating, which is the lowest of any state.

From there the governor, a Democrat, segued into California’s plight as he sees it:

"Now many of the legislatures don’t understand what a downgrading in a credit rating is eventually going to do. They need to go spend a few weeks in California, it might be a good investment for us to send them there because California is in a state which, I don’t know, in spite of the valiant efforts of their governor, I don’t know that California can remain in a place where they don’t inevitably go into default."

Did Paterson really mean to suggest that the largest state in the Union will stiff the investors who own tens of billions of dollars of its bonds?

A spokesman said Thursday that "Gov. Paterson was simply expressing the fact that states face a variety of financial risks in the current economic and revenue environment. He did not say California will go into default."

But what do you suppose New Yorkers’ reaction would be if Gov. Arnold Schwarzenegger were to opine publicly that "I don’t know that New York can remain in a place where they don’t inevitably go into default"?

For the record, the California Constitution mandates that state tax revenue must go first to pay education costs, and second to repay general-obligation bond debt. All other expenses are subordinate to those two.

Tom Dresslar, a spokesman for California State Treasurer Bill Lockyer, said the treasurer would be "happy to have not just the legislature of New York but also the governor come out to California so we can show how we have a perfect record of paying investors in full and on time, and how we will maintain that spotless record."

Plus, we have many empty hotels that would love the business of some free-spending New York pols.

-- Tom Petruno

Anonymous said...

please support the request on A New Way Forward for folks to write their Congresspersons asking for the legal and financial analysis on why in 2008 the Fed and Treasury couldn't use bankruptcy to save the banks and haircut bondholders.