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Note that I say "when", not "if". I say that because significant investments were made in private equity funds during their spending spree a few years back. There is every reason to believe that those investments are going to blow up.
It is worth noting that this is the second time that private equity went on a big spending spree. The previous time was in the late 80s, and the big investors were the savings & loans institutions. Google S&L crisis for more on how poorly that turned out. Then note that the recent spending spree was over an order of magnitude bigger.
Earlier quoted context omitted.
Your down votes signal you read those facts and it upsets your beliefs. I didn't write this for people who agree with my point of view. I wrote this for you. Thank you.
You're probably getting downvoted because you seem to be implying, without real evidence, that California is bankrupt because Arnold was complicit in cheating California out of billions because of shady dealings with Enron. These are the sorts of allegations that one would typically see in a political forum populated by partisans and hacks. Downvoting is just HN's way of saying this sort of discussion belongs elsewhe…
Also I assumed everybody knows it was Davis who allowed that to happen, well before Schwarzenegger was elected.
About 25 years ago in California, Orange Country went bankrupt and public employees had to do "give backs" of (if I remember correctly) about 1/2 of their retirement funds and other concessions. I think that this will be the model for the future, but a state levels. It may not seem fair to change the rules on public employees, but effectively the rules have changed for private employees because the economy at federal…
It's worth observing that: 1) Orange County went bankrupt by cooking the books. After the scandal broke, their treasurer went to jail. 2) The Republican administration turned a blind eye to the Democratic treasurer's malfeasance because it was allowing them to keep taxes very low, which was making their government very popular. 3) The government refused to raise even a temporary tax to avoid bankruptcy, as that posit…
FWIW I live in Orange County but what really matters is what city you live in within OC.
Earlier quoted context omitted.
Your down votes signal you read those facts and it upsets your beliefs. I didn't write this for people who agree with my point of view. I wrote this for you. Thank you.
You're probably getting downvoted because you seem to be implying, without real evidence, that California is bankrupt because Arnold was complicit in cheating California out of billions because of shady dealings with Enron. These are the sorts of allegations that one would typically see in a political forum populated by partisans and hacks. Downvoting is just HN's way of saying this sort of discussion belongs elsewhe…
And what about Arnold's refusal to tax offshore drilling the same way red states like Alaska do?
Yes there need to be cuts in spending but refusing to raise a single tax is simply absurd. Both things need to happen to balance the budget.
The real problem is the need to have a 2/3 majority to pass a budget in the legislature. That is simply absurd.
As a foreigner, this is like bizarre fiction. * Arnold Schwarzenegger, a former bodybuilder champion now politician * Governor of nearly bankrupt California * A state scammed out of 40 to 50bn by Enron and pals * AS career was supported by Enron (from Forbes) * Writing an opinion column on Fox owned WSJ against state pensions My sympathies to all californians. The world owes you so much.
Your down votes signal you read those facts and it upsets your beliefs. I didn't write this for people who agree with my point of view. I wrote this for you. Thank you.
EDIT: I retract my statement that it's an ad hominem. I think the parent has a reasonable point.
No mention of Prop 13 eh? PG&E etc. are able to pay insanely low property taxes, often creating shell companies so the property can be passed between owners, while regular working schmoes pay sky high property taxes. And what about Arnold's refusal to tax offshore drilling the same way red states like Alaska do? Yes there need to be cuts in spending but refusing to raise a single tax is simply absurd. Both things nee…
Best proposition ever!
I have a feeling these graphs do more to explain the problems that Berkeley professor wrote about ( http://blogs.berkeley.edu/2010/08/24/a-letter-to-my-students... ) than the explanations he proposed.
Earlier quoted context omitted.
Everyone who buys California state bonds (which are income tax exempt) is loaning the money. The interest rate California has had to pay to entice people to buy these increasingly riskier bonds, has increased accordingly as the state's financial condition has deteriorated. It is a risky deal, and buying CA state bonds to hold until maturity is basically a bet that the state will get bailed out by the federal governme…
Yeah I knew it would be bonds, just seemed like a risky proposition. I guess any responsible economic action here isn't going to be popular so it's not going to happen? Hypothetically what would happen if the state decided to reform these pensions, slashing them right back to something they could realistically afford?