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| Economy | |
| California Formally Requests TARP Bailout | |
| 2009-05-15 | |
| California Treasurer Bill Lockyer asked U.S. Treasury Secretary Timothy Geithner on Wednesday to authorize assistance for his state from the federal Troubled Asset Relief Program, warning that depressed tax revenues may cut into basic services and halt the building of infrastructure. In a letter, Lockyer asked Geithner for TARP assistance for California and "other financially strapped states and local governments which face a severe cash flow crunch." "If we cannot obtain our usual short-term cash-flow borrowings, there could be devastating impacts on the ability of the State or other governments to provide essential services to their citizens," Lockyer wrote.
Ah, yes, the usual suspects... In addition, Lockyer warned in the letter that California's cash flow problems may lead to trouble accessing the long-term bond market, which could "eventually even halt our infrastructure construction programs." Lockyer estimated that California's cash flow shortfall in fiscal 2009-2010 will be more than $13 billion. Is that before or after the SEIU got Obama to help them out with their "contract negotiations"? But weakness in the credit markets will cause difficulties in short-term borrowing to make up that difference, Lockyer wrote, necessitating the use of TARP money to help make funds more easily available through banks. Under a plan outlined by Lockyer in his letter, if a government is unable to repay loans made using TARP funds, the Treasury would use TARP money to "purchase the non-performing assets." Like Vallejo? Under that scenario, the state or local government would then directly repay the Treasury under the terms it had with the bank, according to Lockyer's plan. If the entity in question couldn't pay the bank under the original terms, how the hell are they gonna pay the Treasury under the original terms? Lockyer has stated previously that he believes the Obama administration has the authority to use TARP to guarantee state-government borrowing. Well, yeah, he must since he can fire the CEO of GM and determine what Chrysler's ad budget should be.... | |
| Posted by:Cornsilk Blondie |
| #17 GERMANY is also "broke", ala FREEREPUBLIC. OTOH, since the Ninth declared the USA an illegal and unconsitutional nation anyhoos, it should be fine and legal for DA ARNUUUULD to seek independent = sovereign CA State bailout from CHINA, widout that pesky USGovt = Congressional permission, oversight, etc thingys??? |
| Posted by: JosephMendiola 2009-05-15 23:57 |
| #16 remove the ninth circus delete the current state senate and house in a chapt 7 bankruptcy hold new elections with both current parties disbarred. |
| Posted by: 3dc 2009-05-15 22:33 |
| #15 I think every person who wants to govern must first build a successful Sim City, City, it looks like most have no idea how a city works at all. Make it a requirement and weed out all the idiot wannabes running today's cities. |
| Posted by: Redneck Jim 2009-05-15 16:03 |
| #14 The state and local governments are REALLY desperate for revenue these days. Just yesterday I saw 2 motorcycle cops writing tickets to high school students on their bikes. They've already overharvested speeders on the freeways. |
| Posted by: Iblis 2009-05-15 13:35 |
| #13 How to raise $13 Billion. Enforce excessive noise regulations on Harley's. $100 fine first offense $200 fine second offense $500 fine third offense Forth offense confiscate the motorcycle and sell it to Chinese. There, California budget shortfall problem solved. |
| Posted by: GolfBravoUSMC 2009-05-15 13:18 |
| #12 come on over, Army of Steves -- CA Rantburgers (and Lizards -- quite a lot of them in the Greater Bay Area as well as So Cal) are standing by to launch Operation "Those Pork-Busters Came In -- Cleanin' Up The Town". With unlicensed nuclear particle accelerators in all our backpacks (they only LOOK like leaf-blowers). And afterwards, popcorn, tea, and cookies. |
| Posted by: Querent 2009-05-15 13:10 |
| #11 Move Gitmo crowd to Alcatraz. Begin self-help inmate rehab of facility immediately upon their arrival. Pocket SECDEF Gate's $ 50m from operational day one! Charge another $ 50m per year in detainee tuition, Red Cross swimming classes, room & board, etc. The money's tempting but I think we'd save even more if we moved all the state legislators to Alcatraz. But, hey, Alcatraz prolly has room for Gitmo detainees and the legislators too. Maybe the Gitmo guys would convert the legislators to Islam. |
| Posted by: Ebbang Uluque6305 2009-05-15 12:35 |
| #10 A message will be sent loud and clear next Tuesday how Californians feel about our FAT state government. |
| Posted by: crazyhorse 2009-05-15 12:23 |
| #9 I doubt you could cut 10% from their budget. The problem is that the overwhelming majority of their budget (like the Feds and the other states) is either contracturally obligated (and thus only modified by bankruptcy or Obama intervention) or required by court order. Not true. When the Richmond school district went bankrupt several years ago it was noted that administrators outnumbered the teachers. Same is true in agencies across the state. The bureaucracy is bloated and overpaid. An across the board headcount reduction of 10% wouldn't even be noticed by recipients of state services. |
| Posted by: DoDo 2009-05-15 11:53 |
| #8 As California goes, so goes the nation. When California goes up, we get the trickle down from their sucess. In Oregon we calls this trickle down "golden rain". When things are bad in California they may not get quite as bad elsewhere, but it lasts longer. |
| Posted by: Richard of Oregon 2009-05-15 11:44 |
| #7 charger, Will non-Californian taxpayers now get to vote Only if they're illegal immigrants. |
| Posted by: Glenmore 2009-05-15 11:22 |
| #6 Steve White, I doubt you could cut 10% from their budget. The problem is that the overwhelming majority of their budget (like the Feds and the other states) is either contracturally obligated (and thus only modified by bankruptcy or Obama intervention) or required by court order. |
| Posted by: Glenmore 2009-05-15 11:21 |
| #5 Will non-Californian taxpayers now get to vote in Californian elections? |
| Posted by: charger 2009-05-15 10:41 |
| #4 Move Gitmo crowd to Alcatraz. Begin self-help inmate rehab of facility immediately upon their arrival. Pocket SECDEF Gate's $ 50m from operational day one! Charge another $ 50m per year in detainee tuition, Red Cross swimming classes, room & board, etc. |
| Posted by: Besoeker 2009-05-15 10:30 |
| #3 I could cut 10% from the California budget with a day's work. Let me have Old Spook, TW, tu3031 and Badanov and I'll cut 25% by the end of a week. tu3031 and I would be rendering the books, Old Spook would glare menacingly at the now-terrified legislators, Bad would rewire their computers, and TW would be swinging the periwinkle Cluebat of Destiny™ right and left. |
| Posted by: Steve White 2009-05-15 10:17 |
| #2 Lockyer estimated that California's cash flow shortfall in fiscal 2009-2010 will be more than $13 billion. And the Fed's 2009-1010 shortfall will be about $3 trillion. Lockyear does realize that the Obama admin will spend $2 for every $1 it takes in taxes this year? This year's Fed deficit of $1.8-2.0 trillion is more than the entire capital spending of the entire United States, even in a good year. In terms daytime TV viewers can understand, it's as if the fat Oprah was loosed upon America's seed corn reserves and there won't be any left for planting next year. |
| Posted by: ed 2009-05-15 10:17 |
| #1 ...warning that depressed tax revenues may cut into basic services and halt the building of infrastructure. Cause every service is essential and every dollar spent by the Gov is critical to the very existence of the world. [How the heck did they manage in the 60s when they didn't have a gazillion programs and entitlements?] Take TARP and become a territory again. Your Senators and Representatives lose their votes in Congress until [some Southern states have had this experience] you get your house back in order. |
| Posted by: Procopius2k 2009-05-15 09:31 |