Remember California is the seventh largest economy in the world

TheTrumpet.com:

Ten days remain before California will begin defaulting on its obligations.
California is in crisis. Lawmakers can’t agree on how to balance the budget. And the truth is that there is no easy solution. Painful decisions will have to be made. And no matter what politicians decide, it is clear that the good times are over for the Golden State.

“Our state faces the most challenging budget in its history,” Gov. Arnold Schwarzenegger warned. “The combined effect of our structural deficit and the dramatic decline in revenues … have produced a two-year deficit of … nearly half of our projected 2009-2010 revenues” (emphasis mine throughout).

By some estimates, California’s current expenditures through fiscal year 2010 will reach $145 billion. And state revenue will only be around $100 billion—a massive $45 billion shortfall. And that is if the economy doesn’t deteriorate more than expected, and if the state doesn’t get hit with another wave of unprecedented lightning storms, fires, drought, or other natural disasters.

But the situation is now so critical that state Director of Finance Michael Genest says that in just over a week, California will be forced to defer making payments on certain state commitments. Instead, he says, “the state will have to defer or pay with ious for most of its obligations.”

That is right; California will be reduced to sending out bits of paper indicating that at some point in the future, if finances ever allow, the state will make good on its bills.

What a dramatic turn of events for what was once arguably America’s most prosperous state.

My comment: A person would have to be nuts to want to be a politician in the midst of this financial crisis. Already there have been riots in Iceland, Latvia, Greece, and Bulgaria over the economic problems in those countries. Because of the collapse of the Icelandic Kroner the people there have experienced a severe drop in their standard of living. California has budgeted $145 billion in expenditures and will only collect $100 billion in taxes. Even a politician can figure out that this is untenable. The only hope is a bailout from Washington DC but I am against that because that means I have to pay for the stupidity of California. What aggravates me even more is that I have had to listen to stoops from California tell the rest of us in the country how enlightened and wonderful and caring the elites in California are and how they lead the country in all new trends and fads. Well they are right on that point as even the Federal government appears to be broke. If I was the Govenator I would be putting Operation Valkyrie into effect before February 1.

John Polomny
The Real Deal