San Diego Housing Bubble News and Analysis

Oh, it'll be okay.

I've been morally bankrupt for years.

I think it is already a given that California is/will be bankrupt.

Numbers from the cal budget summary

http://www.ebudget.ca.gov/pdf/BudgetSumm...

The "budget" they put together is a joke. If they cut everything but education, prisons, welfare, and medi-cal - they still could not balance the budget.

Health and human Services 31.1 billion
Corrections 10.3 billion
K-12 education 41.0 billion
Higher Education 12.0 billion

Total of above 94.4 billion
Total state rev 90.0 billion

This excludes congress, DOT, Highway Patrol, the Courts, EPA et. al.

For the 2008-2009 year, California expects to spend 104 billion with 90 billion in income - -14 billion.

For the 2009-2010 year, California expects to spend 111 billion with 86 billion in income and a deficit of 14 billion from the prior year.

All tolled a 41 billion deficit. That’s 41 billion deficit on total revenue of 86 billion.

Sooner or later, the state will officially be bankrupt.

Absolutely. There is a very LARGE crisis looming in municipal/state governments. IMHO, this is much, much bigger than lower housing prices (which are a good thing) or commercial RE failures (pretty bad, but we could get through it).

Shhhhh...maybe if we don't talk about it, the problem will go away. You know, "green shoots" and all. ;)

Just heard today some Dems were looking to redirect some leftover TARP money to the states.

Municipal/local governments are able to claim bankruptcy. States do not have that ability. They would have to be taken over by the feds, and there's no precedent to this. This next round of cuts by California is really going to hurt (as opposed to the accounting gimmicks last year).

You guys (saying that state govt will fall apart) are smoking something. The Feds will step in to save the worst states from their worst mistakes. It's not even a contingency: It will happen.

I agree the Feds will step in where States are concerned, however if steps are not taken to cut costs - that means giant cuts in K-12, prisons and the elimination of at least 1/3 of state and municipal administrative staff, along with a substantial reduction in promised retirement benefits, it will only delay a bigger inevitable.

Governments tend to grant larger retirements in lieu of salaries as a form of borrowing. With the advent of extreme deflation, these expectations will also need to be adjusted, or the money printed and all that follows...

I just cannot see any politician making these tough decisions, so my guess the decisions will be made for them (US).

And that US federal govt would have its purse strings controlled by... more politicians (in Congress). This will end up with a lot more printed money, not much tightening of spending. It's been that way for 100 years. It's not going to change now.

Cow says to the turkey "don't go over there the farmer is going to kill you."

Turkey says "your crazy I always get fed, now just shut up"

Next Day

Cow says to the turkey "Don't go over there, you are going to get killed"

Turkey says to cow "Would you shut up, it is always the same. I get fed everyday. It's been like that as long as I can remember. Now please mind your business

The next day is Thanksgiving

Don't worry the SD County Treasurer is going around town stating that because there are more parcels, the total property tax revenues are OK even though many homes have been re-adjusted through lower sales or requests.