I Know Calif is in Trouble... But What Is The Likely Outcome/Solution To Such A Serious Problem?

[Blackhatjack]

It is one thing to lament the terrible shape Calif is in today, but I am not hearing any kind of solutions put forward that will come close to 'fixing' the budget problems.

I read where the State Treasurer said the Legislature had to have a budget passed and in hand by June 15 in order to have time to borrow sufficient funds to avoid defaults on June 29, which would further debilitate their credit rating and make it virtually impossible to avoid bankrupting the state.

If this is true, there ought to be a ton of suggestions on the table how to avoid this ... and yet I hear all Repubs will do is vote no on any budget bill put before them.

Put the hype aside and tell us what you think the ultimate outcome will be for Calif.

Thanks!

Edit to Add: Is Anyone going to profit from Calif Defaulting? ARe they shorting investments that will dive in value once Calif defaults?

[Nipper1959]

1. The foundation is rotten

The ability of the general public to rule by referendum has ruined the state. Fundamental reform of the constitution must take place for a long term fix. In the short run the citizens need to pull their heads out of their asses and realize that nothing comes for free. Taxes are the price of admission to a democracy and good government. The government is the problem mantra must be confronted head on because sometimes government is the only answer that works.

[Blackhatjack]

2. So is the State going to Default before any serious action is undertaken?

Just wondering if people who live there have a better perception of what is actually going to happen.

Some people won't accept reality until it rises up and slaps them in the face... is that what is going to happen here?

[BeFree]

9. Who counted the votes?

Calif. was one of the first to have electronic voting machines. Given the history of those machines and the fact that they have pretty much been outlawed, what makes anyone think the votes in any referendum were counted correctly?

[shanti]

3. arnold's taking suggestions

*snort*

no really, check out the sacramento bee!

[votingupstart]

4. massive spending cuts

unless you either get a new source of income you will have to quit spending as you wont have any money -

[Blackhatjack]

6. Has anyone put forth a budget with spending cuts large enough to stop the bleeding? n/t

[votingupstart]

10. short answer - no

they would basicaly have to stop 99% of the governmental functions for 7-8 months

42 billion in debt and "estimated" 91 billion in revenues.

[Demeter]

5. California Needs a New Constitution

And a lifetime ban for some of the players.

[MasonJar]

7. California made a big error in kicking out Gray Davis for the Terminator

What were they thinking? Davis had no prayer with Enron cheating California citizens with energy lies and Cheney backing the equivocations.

[Blackhatjack]

8. As an outsider, that is the way I see it .... the Bush/Cheney Admin was complicit ...

... in upholding those horrendous electricity contracts that Gray Davis was forced to sign under duress.

What has been accomplished since Gray Davis was recalled? Nothing that I can see.

[AndyTiedye]

19. Arnie Was In On It

Published on Sunday, August 17, 2003 by CommonDreams.org
Ahnuld, Ken Lay, George Bush, Dick Cheney and Gray Davis
by Jason Leopold

Arnold Schwarzenegger isn’t talking. The Hollywood action film star and California’s GOP gubernatorial candidate in the state’s recall election has been unusually silent about his plans for running the Golden State. He hasn’t yet offered up a solution for the state’s $38 billion budget deficit, an issue that largely got more than one million people to sign a petition to recall Gov. Gray Davis.

More important, however, Schwarzenegger still won’t respond to questions about why he was at the Peninsula Hotel in Beverly Hills two years ago where he, former Los Angeles Mayor Richard Riordan and junk bond king Michael Milken, met secretly with former Enron Chairman Kenneth Lay who was touting a plan for solving the state’s energy crisis. Other luminaries who were invited but didn’t attend the May 24, 2001 meeting included former Los Angeles Laker Earvin “Magic” Johnson and supermarket magnate Ron Burkle.

While Schwarzenegger, Riordan and Milken listened to Lay’s pitch, Gov. Davis pleaded with President George Bush to enact much needed price controls on electricity sold in the state, which skyrocketed to more than $200 per megawatt-hour. Davis said that Texas-based energy companies were manipulating California’s power market, charging obscene prices for power and holding consumers hostage. Bush agreed to meet with Davis at the Century Plaza Hotel in West Los Angeles on May 29, 2001, five days after Lay met with Schwarzenegger, to discuss the California power crisis.

At the meeting, Davis asked Bush for federal assistance, such as imposing federally mandated price caps, to rein in soaring energy prices. But Bush refused saying California legislators designed an electricity market that left too many regulatory restrictions in place and that’s what caused electricity prices in the state to skyrocket. It was up to the governor to fix the problem, Bush said. However, Bush’s response appears to be part of a coordinated effort launched by Lay to have Davis shoulder the blame for the crisis. It worked. According to recent polls, a majority of voters grew increasingly frustrated with the way Davis handled the power crisis. Schwarzenegger has used the energy crisis and missteps by Davis to bolster his standing with potential voters. While Davis took a beating in the press (some energy companies ran attack ads against the governor), Lay used his political clout to gather support for deregulation.

http://www.commondreams.org/views03/0817-07.htm

Consumer advocates with the Foundation for Taxpayer and Consumer Rights, Heller and Balber said today: "The California energy crisis was the culmination of a decade-long push to remove consumer protections and regulatory oversight of California's electric power system... Leading the charge was Ken Lay, the former CEO and Chairman of Enron, whose close ties with the Bush family were supplemented by campaign contributions both in Washington and across the country, notably including more than $100,000 to California Governor Gray Davis. It was, of course, no surprise that Governor Davis failed to meaningfully take on the power industry's manipulation of the California energy market during the crisis, opting instead to sign overpriced power contracts and force consumers and taxpayers to pay for the miserable failure of deregulation. Although Californians lambasted Davis for his unwillingness to stand up to the power companies, people also knew that Ken Lay and his ilk were to blame for the billions of dollars that were being siphoned out of the state on a monthly basis.

"In order to counter the virtual public consensus that deregulation ought to be dumped, Ken Lay, during the spring of 2001, began a series of high-powered meetings to salvage the deteriorating argument for his energy scheme.... He met privately with Vice President Cheney in the days leading up to the administration's publication of what became an extremely Enron-friendly National Energy Plan. Successful on the national front as a result of his longstanding relationship with key Republicans, Lay hoped to regain his footing in California by forging ties with prominent Republicans in the state. In May of 2001, Lay convened a private meeting with junk bond king Michael Milken, Los Angeles' then-Mayor Richard Riordan and Arnold Schwarzenegger, at which Lay reportedly presented his vision of solving the state's energy deregulation crisis by, absurd as it sounds, expanding deregulation. The meeting, about which the public still knows very little, may become a major issue now that Schwarzenegger is no longer just a Republican movie star..."

http://www.accuracy.org/newsrelease.php?articleId=460

[Blackhatjack]

11. I posted the OP to concentrate more on the possible short term solutions...

This is potentially catastrophic situation FOR THE WHOLE COUNTRY if Calif Defaults.

So if Calif is the patient that has been brought into the ER with a faint heartbeat, losing blood fast, and unable to breath... what do we do RIGHT NOW, ... NOT LATER... to avoid certain economic death?

[Blackhatjack]

12. IF Repubs want to be the 'Party of Ideas' once again, what are they proposing?

They now claim the mantle of 'fiscal conservatives'.... so where are their proposals?

[Blackhatjack]

13. I'd like to hear from DUers who presently live in Calif ... what do you think? n/t

[mitchtv]

21. Remove commercial properties from Prop 13 coverage

that was the original mistake.

[Blackhatjack]

23. How much of today's $51bil Deficit is attributable to that?

[mitchtv]

25. I couldn't say, but BOA and Wells Fargo and the rest

have been abusing the law for years .13 has been around for years and It's purpose was to protect seniors who were being taxed out of their homes. Not BOA flipping and long leasing properties,with every kind of loophole they can buy. I dare say we would not be in this deep if the Corps had been taxed at regular rates not 1972 rates.

[1]

14. short term? california can only cut spending. and prople will suffer...

the people of california will need to get pissed, in sufficient numbers, and then enact the necessary changes to their way of government to fix this in the long term.

pissed.

in sufficient numbers.

[Blackhatjack]

15. Do you think there is going to be a mass exodus of people leaving Calif?

There are obviously more people stuck who cannot leave, but if the situation becomes untenable those who can will leave a disaster area.

Will businesses close and move?

[1]

16. i don't know. people have always amazed me in how they step up to disasters. this is a disaster...

the people of california are good people.

i think california is going to come out of this just fine. but it is going to be a bumpy ride...

[Blackhatjack]

17. The least able to cope will be hit the hardest ....

When the safety net for the needy disappears things can become desperate quickly.

When the entire government is unable to provide services, you can imagine that the needy won't even be on the radar screen.

[1]

18. "the needy won't even be on the radar screen." i don't believe this...

i think the message will finally be brought home about what our responsibilities are.

its easy living when life is good. life is not good now in california.

now that life might suck (relativity) for all (a little bit), i think true change will occur...

[Blackhatjack]

20. I hope you are right ... and I agree Californians are good people...

I think optimism may be their greatest asset right now.

[1]

22. i know californians are good people. look at the programs they have put in place!

i think they naively believed that their government would adequately fund those programs, and they were wrong about that.

so, through this tough time, they will no longer expect their government to do the right thing.

they will make it law!

[madville]

27. How do you fund programs with no money available?

You can create programs all day but in the end someone has to pay for it. I would feel great about building a homeless shelter for families in my backyard, but with no money for a structure, meals, or sleeping arrangments, it's gonna be a shitty shelter.

[Blackhatjack]

28. To an outsider it looks just like a consumer credit card situation today....

.... all future credit has been cut off, all outstanding balances have been subjected to inflated interest rates because of a tanking credit rating, and there is a real possibility that future income will be less than that received just a few months ago.

SAme situation ....

[1]

30. exactly! and that is the problem...

the people of california expected that once these programs were enacted that they would be funded.

this has not shown to be true.

now, the people of california will have to ensure that these programs are funded when they are enacted. not just some hope of a 2/3 vote at some later date (that thought has to die.)

granny in your million dollar home? pay the proper taxes. just like the rest of us do.

arnold and kobe? its time to step up to the plate. do your part.

the money is there. the right people just have to start paying it.

[JVS]

24. This was covered months ago

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5091538#5091538

[1]

26. really? then give us the "25 words or less" answer...

i'm not up to reading 10,000 threads/posts of anger and hopelessness and flames without solution.



what, exactly, was covered "months ago" my buddy JVS???

[QueenOfCalifornia]

29. I will still get to be

the Queen...:P

[Lindsey]

31. I've loved CA everyday since I moved out here 20 years ago....

but I'm really worried. I work at a vocational school and the main program the students use to pay for child care is getting cut. That means about 40% of our students will have to withdraw which will be incredibly bad for our school and especially bad for the students who will have no training; so they'll end up in Fast Food joints and retail outlets. Education is the key factor to being able to provide for yourself and your family. And it's so sad because these young people need a skill and they want so badly to make something out of themselves. I'm really distressed about it......

[Blackhatjack]

32. And that is the tradeoff that people have to consider ....

...higher taxes mean these very students are able to not only become higher taxpaying members of society, but the quality of their lives is so much higher.

Weigh that against the wealthier citizens of California being able to keep their taxes lower.

Fairness often is not a difficult concept when you put live breathing faces on those affected.