So what happens if California files Bankruptcy? (2009, credit rating)

[jram36]

i left california and hell i left usa, i live in mexico. i feel sheltered from all that is evil in usa. your laws and taking of constitutional rights that are making the poor suffer. hah i'd rather catch swine flu if it where as serious as said to be wich its not. come to mexico and see. im caucasion californian but not anymore. usa can go to hell. burn devil burn

[bmd69]

Your house will be worth Nothing!

[1AngryTaxPayer]

Originally Posted by jram36

i left california and hell i left usa, i live in mexico. i feel sheltered from all that is evil in usa. your laws and taking of constitutional rights that are making the poor suffer. hah i'd rather catch swine flu if it where as serious as said to be wich its not. come to mexico and see. im caucasion californian but not anymore. usa can go to hell. burn devil burn

You left your English here too.

[Kibby]

Originally Posted by dcashley

A state government cannot declare bankruptcy. There is absolulty no provision in law for it.

When you think about it .... there was no provision in law for the Unions to take over GM and Chrysler and the asset protected investors to get kicked to the curb at the bottom of the list .... BUT, it happened.

I'm not altogether sure that "law" means anything any more if Washington get's involved. They pretty much do what they want .... "law" has lost it's meaning today.

California clearly can't survive with the "Green" regulations and the Union gold plated retirements that are sucking the state completely dry - but I don't see an answer because both of those are 'protected' at the highest levels. I actually expect that the Government with "save" the welfare folks, the Greens and the Unions (under the table of course) ....... everyone else is on your own.

A bigger problem may be coming down the pike - imported energy (no money, no power) and imported water (no money, no water) -- I don't even see these issues addressed. You think that other states are going to accept those worthless IOU's??? Get real, get worried.

[drshang]

It will wreck the municipal and state bond markets to the point where it will increase the cost of capital for every state and local government in the country, likely enough that it would be cheaper to hand California a check for its deficit (read: federal bailout) than it would to let it go bankrupt. Not to mention the lost productivity and other issues that stem from a bankruptcy.

In short, the feds won't let California go bankrupt because, financially, it doesn't make sense. It could also put a big dent into the federal government's bond market - if the price of t-bills falls (meaning yields rise meaning the government pays more to finance its trillion+ dollar deficit) and it is effectively more expensive for the feds to borrow money.

Basically, IMO, it is almost certainly not going to happen. One thing you all need to keep in mind is California is not the only state that has some serious, serious budget issues. It's the biggest state so it gets the most publicity but there are several other states in pretty deep trouble as well.

[mdvaden]

Originally Posted by Lovehound

California won't file for bankruptcy. I don't think that's even possible.

Eventually, and probably rather soon, the Democrats and Republicans will sort it out, deals will be made, and the new budget will be signed.

In the mean time some state services will go dark, some state employees will get reduced wages or temporary layoffs, and the taxpayers will be inconvenienced by the unavailability or postponement of some services or in some cases longer lines.

Oh yeah, and if you're due a state tax refund it will be delayed until the state legislature sorts it out.

My bet is that the heat will be turned up quite a lot beginning next week (Monday, February 2nd) and I expect it will be settled before the end of the month.

Not possible.

There is always something that can be cut, even if it's extreme and painful (to the porkbarrel keepers)

It's really weird watching your state. It's not a joy-ride in Oregon, but it's sort of odd watching the state to the south collapse, when it has such a grand abundance of so-called "enlightened" and "compassionate" leaders who drove it into the ground.

Maybe if our leaders fall on yours, it can soften the fall.

[ryanst530]

Originally Posted by jram36

i left california and hell i left usa, i live in mexico. i feel sheltered from all that is evil in usa. your laws and taking of constitutional rights that are making the poor suffer. hah i'd rather catch swine flu if it where as serious as said to be wich its not. come to mexico and see. im caucasion californian but not anymore. usa can go to hell. burn devil burn

Alright... moving on

[Kibby]

Originally Posted by drshang

It will wreck the municipal and state bond markets to the point where it will increase the cost of capital for every state and local government in the country, likely enough that it would be cheaper to hand California a check for its deficit (read: federal bailout) than it would to let it go bankrupt. Not to mention the lost productivity and other issues that stem from a bankruptcy.

In short, the feds won't let California go bankrupt because, financially, it doesn't make sense. It could also put a big dent into the federal government's bond market - if the price of t-bills falls (meaning yields rise meaning the government pays more to finance its trillion+ dollar deficit) and it is effectively more expensive for the feds to borrow money.

Basically, IMO, it is almost certainly not going to happen. One thing you all need to keep in mind is California is not the only state that has some serious, serious budget issues. It's the biggest state so it gets the most publicity but there are several other states in pretty deep trouble as well.

General consensus seems to be opposite to what you are saying. A bailout wouldn't really help anything - California is broken and throwing more money at it is just enabling an addict. As you noted - several states are in the same boat ... and pretty much for the same reasons - bailout even one state and 49 will get in line for their share of the goodies.

Not only are the citizens fed up with the bailouts but the Government is BROKE. California is on their own - don't expect a white horse to come to the rescue.

It's political suicide to save one state that can't control their spending, and ask for all the others to pay for it.

[njguy]

Originally Posted by jram36

i left california and hell i left usa, i live in mexico. i feel sheltered from all that is evil in usa. your laws and taking of constitutional rights that are making the poor suffer. hah i'd rather catch swine flu if it where as serious as said to be wich its not. come to mexico and see. im caucasion californian but not anymore. usa can go to hell. burn devil burn

I have an online friend that recently made the CA to Mexico move and said the same thing about the Swine Flu not being nearly as bad in Mexico as the US Media makes one here in the states to believe. One has to take note that the US media seems to have their own type of agenda as far as news reporting and the like which makes many articles of news "slanted".

[Alexus]

As California goes, so does the nation. Bush apparently didn't understand this, and greatly hampered the state. There will be federal bailout to compensate for 8 years of Bush anti-CA practices to make the necessary correction.

After such a bailout, tougher immigration legislation, a revisit of how revenues are obtained and an adjustment, a greater investment in high-tech and medical technology, a review of the h-1b visa program and its effect on displacing qualified american workers, and so forth.