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The PJ Tatler

by
Bryan Preston

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April 2, 2013 - 8:08 am

Stockton, CA has made news this week for being the largest US city to declare bankruptcy, but could the state of California itself also be bankrupt? According to a new state auditor’s report, if the state were a business it would be operating deep in the red and may be insolvent. If it were an individual and given the spending ethics the state has operated under, California would be scheming to fake its own death for the insurance money.

Were California’s state government a business, it would be a candidate for insolvency with a negative net worth of $127.2 billion, according to an annual financial report issued by State Auditor Elaine Howle and the Bureau of State Audits.

The report, which covers the fiscal year ending June 30, 2012, says that the state’s negative status — all of its assets minus all of its liabilities — increased that year, largely because it spent more than it received in revenue.

About half of the $127.2 billion in accumulated red ink came from the state’s issuing general obligation bonds and then giving the money to local governments and school districts for public works projects, the auditor pointed out. The assets built with the bonds remain on local balance sheets while the bonded debt accrues to the state.

The remainder, however, is all on the state’s ticket. “Expenses that exceeded revenues and increased long-term obligations resulted in an 81.4 percent decrease in the total net assets for governmental and business-type activities from the 20-10-11 fiscal year,” said the report.

California has gotten into the death spiral that it’s in because it keeps enacting tax and spend liberal policies. Rather than learn anything from this, Democrats nationally want to turn every state into California.

A Republican Party with its head in the game would use California’s pathetic record under Democrats to warn voters elsewhere against following California’s lead. But we don’t have a national GOP with its head in the game.

Bryan Preston has been a leading conservative blogger and opinionator since founding his first blog in 2001. Bryan is a military veteran, worked for NASA, was a founding blogger and producer at Hot Air, was producer of the Laura Ingraham Show and, most recently before joining PJM, was Communications Director of the Republican Party of Texas.

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Unless "game" is synonymous with "between their butt cheeks"...we most certainly do not have a GOP with their head in the game.
1 year ago
1 year ago Link To Comment
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This could actually be a good thing. Just think of the possibilities.

In exhange for bailing them out, the state government has to accept certain conditions.

1) Federal oversight of all state functions down to the level of dog catcher.

Not saying this would be an improvement but it does accomplish a few things. If they don't run the state any better than they do the federal government then the incompetence becomes impossible to conceal. This would put a real crimp in the overall idea that the government remain an ever expanding entity.

It would also send a cold chill down the spines of other state governments as the full ramifications of bankruptcy sink in.

2) the state has to divest itself of any disposable assets in order to pay it's bills - off shore drilling, anyone?

3) Federal oversight can mandate taxation policy. How long before the businesses in the state stampede for the border?

4) Return the state to territory status. this would allow for the opportunity to break this monolithic state up into multiple smaller States that can be readmitted into the Union as their areas become financially viable.

At least for a while, there would be no senators nor Congress critters from California screwing things up for the rest of us in the federal government.

Or we could just bribe Mexico to take it back since a huge chunk of their population already lives there.
1 year ago
1 year ago Link To Comment
Unless "game" is synonymous with "between their butt cheeks"...we most certainly do not have a GOP with their head in the game.
1 year ago
1 year ago Link To Comment
I was listening to Bill Bennett this morning and he had a guest on in the first hour (I didn't listen to this hour) who insinuated that the Obama Administration might be looking to bail out California. Dr. Bennett pointed out that if this were to happen many states would seriously consider secession. I don't know if it would get that far and Dr. Bennett himself did not support this type of talk, but I would gander many states that have been more responsible than California would be mighty upset that it was getting bailed out at the expense of the other 49 states.

It is quite fascinating and sad that California, which is one of the most resource rich entity on the planet, is in the sorry state it is in. This is the logical end step for extreme Leftism.
1 year ago
1 year ago Link To Comment
The claim that California is "to big to fail" is hogwash. Let them fail. These are the same idiots that while deeply mired in debt are pushing ahead for high speed rail-the mother of all boondoggles. Why should Floridians have to pay for Californian's irresponsibility? What's next? Do we bail out Detroit? (oh wait, bad example) Honestly, California squandered their tremendous resources. I have no sympathy.
1 year ago
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