Massive Loan for State (California) Weighed

[RamboLiberal]

http://www.latimes.com/news/local/la-me-reversal11nov11,1,1739688.story?coll=la-home-headlines

As Gov.-elect Arnold Schwarzenegger prepares to take office, his aides are testing the waters for a possible budget solution that would include having the state go into debt to pay off a substantial portion of the coming year's deficit.

Officials with the new administration say they are still developing their budget plan, and its final elements remain unsettled.

But aides to Schwarzenegger have approached financial institutions to discuss how the state could go about securing a loan large enough to cover the entire deficit, according to sources on both sides of the discussions. That bond could be as large as $20 billion, perhaps more. The sources spoke on condition that they not be identified.

The queries, according to one source who has been involved in the discussions, focus on what kind of guarantees would have to be built into a budget to reassure bond buyers that the debt would be repaid.

Such a loan would be based on the assumption that the economy is already beginning to revive, which would cause future tax revenues to rise. If the state can get past this year's deficit, according to that line of thinking, future budgets could be kept in balance by a mandatory cap on state spending.

[pfitz59]

1. Following the BFEE game plan!

Foist the bill onto futuire generations! Thought the Gropinator was gonna eliminate the deficit, not mask it withloans!

[proud patriot]

4. Plus those with the money to buy the bonds

stand to make a profit from the intrest .

*sarcasm*(let the good times roll Woo Hoo)*end sarcasm*

Typical

[nextbillgates]

2. Huh?

As Gov.-elect Arnold Schwarzenegger prepares to take office, his aides are testing the waters for a possible budget solution that would include having the state go into debt to pay off a substantial portion of the coming year's deficit.

Going into debt to pay off the deficit? Okay.

Maybe I'm confused. Isn't that kind of like paying a credit card bill with another credit card?

[SoCalDem]

3. If Enron gave us our money back, we would be on our way to solvency

and we could put a %100,000.00 pay ceiling for all state employees..:)

[Don_G]

5. Maybe Arnie Can Talk To His Good Buddy

I'm certain that Kenny-boy can refund the money after a heart-to-heart talk with the Terminator.

[Emillereid]

6. This is the great solution we were promised?

We needed an action hero with a broom to come up with "Why don't we just borrow the money to fix the budget?"I thought he was going to find all that unnecessary spending? Didn't Ahhnuld dump on Davis for fixing the budget with loans? Besides I thought we only faced an eight billion dollar deficit next year -- why does he need to borrow 20 billion?

[sandnsea]

7. Eliminate the car tax

Wasn't that the figure if the car license tax was rolled back, $20 million?

And wasn't the big thing against Davis that California's credit rting would be lowered even more if they took out another loan?

Or is this just 'old news'?