California is Insolvent

One of the largest (10th?) economies in the world is bankrupt. They are $31 billion in the hole. Yesterday’s referendums based almost entirely on the notion that additional taxes needed to be raised failed. I dare say that the California sample is large enough to draw some conclusions. It’s my view that people have had it and revenue is not the answer. Californians appeared to be telling Arnold et al that reform and cost cutting are the answer. Am I correct? What does it mean here in Massachusetts? I guess in the absence of a referendum, the pols can raise taxes. Then what? Do we throw the bums out?  

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  • gary

    You know, media is underplaying a very big event here.  There are stories, but IMHO, this should be page 1:  California heading for bankruptcy.

    $20 to 30 billion in the hole; pension fund underwater; a budget that requires 67% of a vote; revenues in free-fall; bonds that are paying an unheard of tax free 7.5% and more.

    Should California actually default on its debt, you can bet you’ll see upticks in bond rates throughout the US.    How many blue states can the federal government take under conservatorship?

    Michigan was first; save the autos, save the state.  How about California, New York, New Jersey?

    Massachusetts?

  • Vote3rdpartynow

    I wonder if Mexico will still want it back.  

    Maybe we should unload this pig on our friends to the south and kill two birds with one stone…..

  • I had just posted this.

    Old Barney things we should lend CA a hand

    http://www.latimes.com/news/lo

    Meanwhile Texas seems to being doing alright for themselves

    http://www.nbcdfw.com/news/loc