Schwarzenegger requests $7 billion federal bailout for California.
Schwarzenegger requests $7 billion federal bailout for California.
California Gov. Arnold Schwarzenegger “warned Treasury Secretary Henry M. Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the federal government within weeks.” Schwarzenegger’s plea comes as the state is “close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans”:
The warning comes as California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent.
The state of California is the biggest of several governments nationwide that are being locked out of the bond market by the global credit crunch. If the state is unable to access the cash, administration officials say, payments to schools and other government entities could quickly be suspended and state employees could be laid off.
The Atlantic’s Marc Ambinder calls Schwarzenegger’s request “easily the biggest story of the day.”
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Is this as bad of a sign as I think it is?
October 3rd, 2008 at 11:35 amHey AHHHHNAAHHLLD: Quick, get to da choppa, give me your hand! We’ll got to China and terminate their banks! Only girly men ask for handouts!
October 3rd, 2008 at 11:36 amhell yeah! i want a billion dollar bailout! er RESCUE i mean…. a billion for everyone!!!
another republican who doesnt handle money well? im as shocked at this as i am about the Jehovahs witness that woke me up this morning…. i told them i loved their song.
October 3rd, 2008 at 11:39 amI wonder if the GOP still wants to change the Constitution to let Ahnuld run for Pres?? LOL
Another example of fine GOP leadership.
October 3rd, 2008 at 11:41 amWhat state will be next?
October 3rd, 2008 at 11:43 amWhat everyone does not seem to realize is that everything we be very bad in the world for a long time because people were very greedy with no oversights!
ILLINOIS needs some too!!!
October 3rd, 2008 at 11:44 amThis won’t be the last state to make such a request if credit markets do not become more liquid quickly. Could be a bad sign. Could be a nudge to congress. We will know pretty soon because some states and municipalities will be looking for cash by the end of the month.
October 3rd, 2008 at 11:44 amWhy don’t we just ask China to float us some more loans?
Oh wait, that’s right, even China, with their goal of owning more of the country than we do, has decided we’re too bad of a credit risk.
October 3rd, 2008 at 11:47 amCan the city of Bothell get a couple of billion while we’re at it?
October 3rd, 2008 at 11:47 amI’d like a new skating rink, replace the NorthShore pool facility, and how about a new park just for dogs to run?
Oh, and did I mention the skating rink should be double decker, ice on bottom and wood on top>?
October 3rd, 2008 at 11:48 amFan of Man Says:
hell yeah! i want a billion dollar bailout! er RESCUE i mean…. a billion for everyone!!!
another republican who doesnt handle money well?
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Sorry, but this doesn’t make any sense. I live in CA and this is a much more complicated situation than that. This is the first I’ve heard about this out here.
BTW, Dems dominate, and have dominated, the State govt for a long time out here.
October 3rd, 2008 at 11:49 amIn 1975, New York City faced this problem.
They asked President Ford to authorize a US government “bailout.”
Ford refused — headlines “Ford to NY – Drop Dead.”
October 3rd, 2008 at 11:51 amTOTAL RECALL!
October 3rd, 2008 at 11:54 amRECALL!
October 3rd, 2008 at 11:54 amGosh I wish California would have another recall election! Were it not for deregulation’s effect on electricity prices and Enron, Gray Davis would probably still be governor.
And after they recall you, they’ll come to the governor’s mansion, Arnold, and you’ll hear them, “Knock! Knock!”
October 3rd, 2008 at 11:55 amLets see, if California was a person, having financial problems, what exactly would a Republican tell her?
“Get a job! Oh you have one? Get another one! Maybe 2 more. Quit living beyond your means. Quit whining! Oh, now you are homeless? Well you don’t count now/deserve to vote/are lazy/dragging the rest of us down.”
Good thing California is not just a lowly citizen, rather than a state.
October 3rd, 2008 at 12:02 pmI’m amazed,
I’m astonished,
I’m shocked.
that these GOP leaders now want all spending and free market financial ailments to be solved by Federal government dollar.
These are the same people who have been preaching the public about how ‘THE GOVERNMENT IS THE PROBLEM,AND NOT THE SOLUTION’.
Even Sarah Palin who is a student of Reagan’s school which considers the government is the problem echoed Reagan’s words last night.
October 3rd, 2008 at 12:07 pmPeople will soon begin to feel the winds of so called ‘bailouts’ from all directions.
We need to pray that it will not be a catastrophic winds with all these bailout plans and the various attempts of reaching more deeper into the US Treasury’s vault.
Fan of Man Says:
hell yeah! i want a billion dollar bailout! er RESCUE i mean…. a billion for everyone!!!
another republican who doesnt handle money well?
This problem is because the credit markets have seized up an is no longer extending credit.
Sad thing is throwing trillions of dollars at the problem is like trying to bail out a leaking boat with a teaspoon instead of fixing the hole that is leaking.
October 3rd, 2008 at 12:09 pmTarazan,
October 3rd, 2008 at 12:10 pmthere is NO treasury vault! We are 11 trillion in debt and this money was going to come from loans which now I hear countries are reluctant to give.
Say, maybe we could ask Exxon-Mobil for a loan! They’re ROLLING in the dough…
October 3rd, 2008 at 12:12 pmMaybe Ahnold should institute a windfall profits tax on the oil production companies in CA. Use the revenues for the state budget.
October 3rd, 2008 at 12:19 pmOh dear lawdie.
October 3rd, 2008 at 12:21 pmIf California needs $7 billion, I shudder to think what amount my home state of Michigan needs!
#19
Pax,
Thank you for your statement..I’m aware of that,and agree with you 100%.
October 3rd, 2008 at 12:22 pmThe thrust of my statement was that private sector is going to dumpt most of their bad debt and what is called lately ‘toxic assets’ at the treasury’s doorstep ,and leave with real but clean dollars.
Yes, these billions of dollars will be borrowed from other countries who have surpluses, like China, Japan,and some Middle Eastern countries.
The Republic of Stupidity Says:
Fan of Man Says:
hell yeah! i want a billion dollar bailout! er RESCUE i mean…. a billion for everyone!!!
another republican who doesnt handle money well?
_______________
Sorry, but this doesn’t make any sense. I live in CA and this is a much more complicated situation than that. This is the first I’ve heard about this out here.
BTW, Dems dominate, and have dominated, the State govt for a long time out here.
well then your cali dems and repubs are 2 peas in a pod….
pretty embarassing for the president of californeia.
October 3rd, 2008 at 12:23 pmFan of Man Says:
well then your cali dems and repubs are 2 peas in a pod….
pretty embarassing for the president of californeia.
___________
So, I see the utter incoherence in your first comment was NOT an accident.
BTW, it’s spelled “California”…
October 3rd, 2008 at 12:32 pmArnie knows Paulson isn’t giving him any of that 700 billion dollars this is all a smoke and mirrors. Arnie can bast the bill to tax the ships that come in California but Sarah told him not to because it would hurt Alaska. Arnie knows he’s going to need a job and is try to play both ends. Sarah wrote Arnie because Sarah doesn’t want the ships to be taxed as she wouldn’t get her kick backs. Now the voters of California will see if Arnie is working for the people or his Republican Party. My money goes to the Party and he knows he has to do what ever Miss Congeniality aka Sarah Palin says or she will kick his butt.
October 3rd, 2008 at 12:33 pmUh huh. And Gray Davis effed up how?
October 3rd, 2008 at 12:44 pmJackie Says:
Arnie knows he’s going to need a job and is try to play both ends.
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I’m no fan of Arnold, but he doesn’t need a job. He’s worth a couple of hundred million dollars and donates his governor’s salary to charity.
This situation is more complicated than some posters here seem to realize. CA, on its own, would be something like the world’s 6th or 7th largest economy. This is the first I’ve heard about the St being so tapped it out needed to borrow money. I’d suspect this has as much to do w/ where the state is in its revenue collection cycle, and the freeze up in the credit markets.
NOTE: He asked for a LOAN, not a bail out. W/out more information, none of really know the specifics. And yes, the Democratically controlled CA legislature can be really irresponsible.
October 3rd, 2008 at 12:47 pmWow chill people, California props up the US not the other way around. The problem is that small loans are needed in great quantities to keep things running while bureaucracy slowly gets around to paying out. All states do it some degree, but California is a giant and the first to really feel the pain. The title is misleading, the money would be a loan not a bailout.
October 3rd, 2008 at 12:58 pmEtherealStrife Says:
Wow chill people, California props up the US not the other way around.
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My point exactly. CA is the engine that pulls the train. It is also a very complicated state. And yes, the article says a LOAN, not a bail out.
And I suspect that Arnold doesn’t like having to do this.
October 3rd, 2008 at 1:01 pmJust raise the GD taxes, Arnold. Time to man, and start paying your share, Mr. Ultra-rich. And let all of your rich friends start paying too.
We cannot borrow our way out of debt…
October 3rd, 2008 at 1:04 pmOval12345678 aka James K. Sayre Says:
We cannot borrow our way out of debt…
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Uh… one more time… I’m not sure that’s the actual issue here. I suspect it has more to do w/ cash on hand, and where CA is in its revenue collection cycle. Plus the general business slow down in general.
Instead of looking at this as another example of “the rich not paying their fair share”, maybe it’s more of a potential bell weather moment for the whole country, and what could follow, like dominoes, across the US going down eventually to state, then county and city governments.
October 3rd, 2008 at 1:27 pmWith Republicans, it’s partisan politics all the time, and this $700 Billion bail-out will just be more of the same…especially since Paulson will be the partisan Republican hack disbursing the money.
Something could have been done months ago as Wall Street began imploding, but the Republicans waited until just over a month before a very important election to demand that taxpayers fork over $700 Billion. This was done on purpose.
Now, Paulson, with very little oversight, can begin spreading the loot around, as if he were the disbursement officer of the Coalition Provisional Authority over in Iraq. How many billions will end up missing? Will flat-bed trucks back up to the Treasury Department loading dock in the middle of the night, hauling off pallets of cash to who knows where?
In other words, because the Republicans are so, so corrupt, there is no doubt in my mind that Republicans will just use this $700 Billion to try to buy themselves an election in one way or another.
No doubt we will start hearing Faux News hacks shortly touting how Paulson rode to the rescue, saved the day, and with many voters having such short-term memories, some voters might actually buy this load of crap.
Culture of corruption Republicans CAUSED this Wall Street meltdown and world monetary crisis. Now, with $700 Billion in taxpayer money in hand, the Republicans (and Paulson) will try to claim credit for bailing out the crooks on Wall Street, Paulson’s crony corporate pals, thus avoiding even more of a disaster…just before the November election.
Some voters might buy this load of Republican crap, but I’m not one of them. Of course, I don’t expect to see a flat-bed truck pull up into my driveway anytime soon, disgorging stacks of cash, to buy my vote.
But I have no doubt that this is what much of this $700 Billion in taxpayer money will be used for in the next thirty days…just like what the corrupt Republicans did over in Iraq, just like they did in the Gulf Coast states following Hurricane Katrina…doling out as much taxpayer money as possible to their crony Republican pals. (This $700 Billion slush fund is the biggest no-bid contract I’ve ever seen).
In the next thirty days, much of this $700 Billion will go toward Independents in the Republican hope that greasing their palms will cause the Independents to choose McCain and Palin over Obama and Biden.
Mark my words, this is why there was all the “theater” of this past week, with the culture of corruption Republicans (and their Blue Dog Democrat lapdog buddies) screwing the progressive, liberal Democrats once again, with no sensible, alternative Wall Street bail-out plan even being considered, or voted on. The fix is on.
Believing that Paulson will be non-partisan, bi-partisan in how he handles the billions given to him to disburse is just as insane as believing that Karl Rove might someday be non-partisan, bi-partisan. Never happen.
October 3rd, 2008 at 2:49 pmRe: #28 you’re right… this is standard state procedure.
At the beginning of every fiscal year, California borrows operating funds against the increased sales tax receipts around the holidays and against fourth quarter income tax receipts.
What is unique this year is that the state budget was almost three months overdue, so the state couldn’t start the process of borrowing these funds until the last two weeks… smack in the middle of the credit crisis. The state claims to have sufficient funds on hand to keep operating through the end of this month.
So rather than having two or three months to arrange for the credit line in a good market, this year the state has less than a month to arrange for the loan in a tight market.
It is interesting to note that one of the things that brought down the Davis governorship was the bad terms the state was required to borrow under during the Enron-engineered “energy crisis”.
October 3rd, 2008 at 3:28 pm