Will the next “bad event” happen in the gov sector ?

[sdduuuude]

First sub-prime went bad, then the credit markets as a whole went bad. Then we had lots of stimulus. Seems some kind of “bad” event is looming. Many suspect it will be in Commercial Real Estate / Commercial Loans.

I’m starting to wonder if the next economic event will be in the government. So many are borrowing to cover costs instead of reducing costs. It’s mind-boggling.

I mean, the Feds can just print away, but cities, states and counties have to either borrow, cut costs or raise taxes (which is like pushing on a rope – fewer jobs = less income tax, less consumer spending = less sales tax, lower housing prices = lower property tax).

Something is going to happen. One day they are all going to realize bankrupcy is the only solution.

These Mish articles triggered my thinking and the situation just seems to be building and building.

Perhaps some kind of economic event in this area will be the ugly way in which some of the stimulus-mania comes to a halt.

http://globaleconomicanalysis.blogspot.com/2009/12/24-states-borrow-money-to-pay.html

and

http://globaleconomicanalysis.blogspot.com/2009/12/arizona-maxes-out-line-of-credit-in-two.html

[svelte]

Oh, it’ll be okay.

I’ve been morally bankrupt for years.

[svelte]

Oh, it’ll be okay.

I’ve been morally bankrupt for years.

[svelte]

Oh, it’ll be okay.

I’ve been morally bankrupt for years.

[svelte]

Oh, it’ll be okay.

I’ve been morally bankrupt for years.

[svelte]

Oh, it’ll be okay.

I’ve been morally bankrupt for years.

[bubba99]

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/BudgetSummary/SummaryCharts.pdf

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.

[bubba99]

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/BudgetSummary/SummaryCharts.pdf

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.

[bubba99]

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/BudgetSummary/SummaryCharts.pdf

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.

[bubba99]

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/BudgetSummary/SummaryCharts.pdf

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.

[bubba99]

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/BudgetSummary/SummaryCharts.pdf

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.

[CA renter]

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. 😉

[CA renter]

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. 😉

[CA renter]

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. 😉

[CA renter]

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. 😉

[Author]

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