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Who thinks California is going to be bankrupt here soon ?

Discussion in 'Political Zone' started by Kangaroo, Feb 2, 2009.

  1. Kangaroo

    Kangaroo Active Member

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    http://www.reuters.com/article/domesticNews/idUSTRE5110S420090202

    Currently they are short 15 Billion and almost out of cash; ontop of that they are expected to be 25billion short next year on the budget so they have to cut even more for 2010

    They article talks about how California unemployment is one of the highest at over 9%

    I think this recession is going to cause complete Bankruptcy of the State and make them cut all the extra programs they have. So what do people think
    California holds back payments amid budget crisis

    Mon Feb 2, 2009 9:46am EST
    By Jim Christie
    SAN FRANCISCO (Reuters) - Like thousands of other Californians, Marcus Sanders would like a tax refund to help his family as recession tightens its grip on the economy and while he looks for full-time work.

    When California's state government will release its refunds, however, is uncertain.

    The payments were due to start on Monday but State Controller John Chiang has said he will hold back the refunds for at least 30 days because the state must close a $15 billion shortfall in its current budget and needs its dwindling cash for more pressing payments, including debt service.

    Sanders, a 46-year-old lawyer and corporate consultant in Antioch, California, who is getting by on contract work, said he appreciates the state's financial predicament and would be willing to wait on a tax refund to help. But not every household may be able to afford to do the same, he said.

    "Every bit of cash you get in a tight time, you'll use it," Sanders said.

    Sarah Gilson of San Francisco also is concerned about Chiang's decision. The recent law school graduate does not expect a tax refund but sees withholding them as a blow to the state's already ailing economy and as lowering her odds of landing a job at a law firm.
    "I don't see how that stimulates the economy," Gilson said. "People look at my resume and are impressed with what they see but they're just not hiring."

    Gilson said she faces cutthroat competition. She said one law firm recently pulled a job notice from her law school's job office within a few hours of posting it. The firm had received 400 applications.
    "You're not even getting reply e-mails thanking you for your application because so many people are looking for work that firms can't process them," she said.

    STATE BURNS THROUGH CASH

    California has fallen on hard times. The housing slump and foreclosure crisis hit it harder than most other states and tumbling consumer spending in recent months has roiled its economy, the world's eighth largest.

    California's unemployment rate jumped to 9.3 percent in December, well above its 5.9 percent a year earlier and the month's national average of 7.2 percent. Economists predict the state's rate will soon cross into double-digits, compounding its government's financial troubles, rooted in worse a than expected fall in revenues.

    One of the state government's most pressing troubles is that its cash account will be tapped out within weeks unless Gov. Arnold Schwarzenegger and lawmakers close the state's current budget shortfall -- then they must close the next fiscal year's budget gap, projected at $25 billion.
    California's financial crisis has unnerved Wall Street -- it has warned of possible downgrades to the state's already low general obligation bond rating -- and is adding to a gloomy outlook in storefronts, government offices, labor halls and corporate boardrooms across the state.
    "Everybody is concerned about this. The state is on the edge of going into the abyss," said Bill Hauck, president of the California Business Roundtable, which represents the state's largest employers.

    IN LIEU OF PAYMENT

    For businesses providing goods and services to the state, its thinning cash account is especially concerning as Chiang, in addition to withholding tax refunds, is planning to issue notes from the state promising payment instead actual payment.

    With recession likely to drag on for some time and lenders tightfisted, companies doing business with the state government need reliable revenues, not promises, said Ruben Barrales, chief executive of the San Diego Regional Chamber of Commerce.

    "Many of our members are bracing themselves," Barrales said, adding that, "Some are questioning whether to go after state business ... or if they win a job to accept it."
    Subcontractors on state projects likewise are anxious because contractors many not be paid, said Andy Berg of the San Diego chapter of the National Electrical Contractors Association: "Contractors always say 'I haven't got the money because I haven't got paid yet.' At least this time they'll be telling the truth."

    In anticipation of state IOUs, contractors are cutting hours for subcontractors or idling them, scrapping equipment orders and hoarding cash, Berg said.
    For some the measures may be too little too late. "If you've done $5 million worth of work and you're waiting for a paycheck, that'll put some of the biggest contractors out of business," Berg said.
  2. iceberg

    iceberg detoxed Zone Supporter

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    maybe we can give california to the chinese in leu of payment of our debt. : )
  3. DaBoys4Life

    DaBoys4Life Benched

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    I think California is going to defect back to Mexico.
  4. sacase

    sacase Well-Known Member

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    Cali needs to cut some of their programs, period. This is a prime example why liberalism doesn't work
  5. jwhardin

    jwhardin Member

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    Maybe if they cooperated with Federal Immigration Services and quit providing sancturary to illegals they could better control their budget
  6. iceberg

    iceberg detoxed Zone Supporter

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    i think we'd get more from china.

    thanks 'roo!
  7. Doomsday101

    Doomsday101 Well-Known Member

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    Mexico can't afford to take on California debt. :laugh2:
  8. burmafrd

    burmafrd Well-Known Member

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    Hey Chang have we got a deal for you.......

    one slightly used state and we through in a 80's action star as governor for free....
  9. Cajuncowboy

    Cajuncowboy Preacher From The Black Lagoon

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    :hammer:

    No better example than Cali.
  10. trickblue

    trickblue Old Testament... Zone Supporter

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    and who do you think will bail them out when that day comes?

    I'll give you a hint...

    You'll be funding their bat-**** crazy programs one day in the near future... ;)
  11. Aikbach

    Aikbach Well-Known Member

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    Yeah, they really want an immigration problem to deal with.;):D
  12. Aikbach

    Aikbach Well-Known Member

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    California is not corrupt enough to suit Mexican standards but its getting there.
  13. ninja

    ninja Numbnuts

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    Uncle Obama will write a check to cover the $15 Billion budget shortfall this year and $25 Billion next year.

    It is like the Prodigal(?) Son story in the Bible. Kid goes out, blows all his money, comes back, and daddy welcomes him back. The other son gets torqued off. Me, I never understood that story.

    California is the prodigal son, Obama is the daddy, and the other states are the loyal son. And this time the prodigal son brought back a bunch of hungry, drug-addicted, stupid friends who want to continue the party. Daddy, meet San Fransisco, aren't they a bunch of nice guys?
  14. CowboyMcCoy

    CowboyMcCoy Business is a Boomin

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    They have a lot of problems there. Overspending is just one of them.
  15. JBond

    JBond Well-Known Member

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    Obama is going to make sure those of us in Kansas pay for the idiotic decisions made in California.
  16. trickblue

    trickblue Old Testament... Zone Supporter

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    along with catering to every nutjob cause...
  17. Doomsday101

    Doomsday101 Well-Known Member

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    Biggest problem is they have managed to run out much of the big business who are now moving to other states which has lowered their tax revenue and at the same time they refuse to curb spending. I don't feel sorry for the state of california they have put themselfs in this position with their own actions and now wants others to bail them out
  18. zrinkill

    zrinkill Diamond surrounded by trash

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  19. iceberg

    iceberg detoxed Zone Supporter

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    hmmmm we owe china a lot of money.
    california will cost us a lot of money to bail out the extreme liberals. again.

    wonder if we can...

    nah, the chinese would never go for it...
  20. Doomsday101

    Doomsday101 Well-Known Member

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    Sell it to the Hollywood elite they are full of great ideas. :lmao2:

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