Should California Get a Federal Bailout?
Published June 17, 2009 @ 12:00PM PT
The Obama Administration says no. Although California's economy is bigger than Canada's or Brazil's, it's "too big to fail" argument was rejected by the federal government.
Clearly Obama et al. have not been paying attention like we have to the shenanigans behind the teetering of the world's 8th largest economy. Either that or piling the woes on the backs of the poor ain't no big thing to the folks in DC:
While its fiscal crisis is severe, experts say the state is unlikely to default on what it owes, even if it runs out of cash. It can raise money through taxes and other means to assure repayment of its debt. Most likely are massive cuts in public services.
My emphases. You know, wevs.
But honestly, I'm trying to figure out exactly what parameters the govt is using to decide who gets a bailout vs. who doesn't (I know, aren't we all). Calculated Risk (1st link) says it's California's fault - they got drunk on the housing bubbly and are now too dysfunctional and hungover to deserve a bailout. Contrast that to Michigan, on an economic lifeline for decades now and newly the recipient of a $2B bond program for its public and private sectors.
Two states with Depression-Era unemployment in some places. For now, California continues to twist in the wind. (I should probably have come up with a catchy earthquake-y metaphor here...)
(Photo of the State Capitol in California by Kevin Krejci. Note the flags at half mast. For its economy?)
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Comments (2)
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Author
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Leigh is a PhD candidate in urban planning at MIT, and a consultant on U.S. Gulf Coast recovery. She sits on the Board of the Allston-Brighton Community Development Corporation in Boston, and has worked with non-profits, foundations and local governments on policies and programs aimed at reducing urban poverty and inequality.
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From a Californian disabled person point of view.... NO, they should not bail out the state.
What they need to do is bail out the people of the state...more stimulus directly to the people pay off bills which helps banks, to buy needed items like clothing which helps our stores which are closing, to fix their cars so they can continue to go to work (if they have a job) which also promotes failing business. You get the picture. People can not afford basic necessitiesright now. Gas at $3.00 a gallon which means food prices are going to follow. There is still not enough affordable places to live either, none of the previous stimulus money went there. As far as I have seen, the stimulus CA already received has not been put to good use, or at least not anything that would help people as a whole. Our Governor cut all social programs and the disabled SSI, homeless shelter programs by 40%, education, raised taxes on sales and gas, closed fire stations, cut the sheriff dept., cut medical/medicare payments and on and on and on. All the things we need the most in these times is exactly what is getting cut.
I say Stop this trickle-down theory and start a trickle-up theory. More stimulus to the people. More money for small business start ups. More money for AFFORDABLE housing. And not just in CA, but everywhere in U.S.A. And stop the oil companies, OPEC and wall street from driving up the gas prices on speculations!!! This alone will put us into a new depression-era.
Posted by Sharon Blasingame on 06/18/2009 @ 12:02PM PT
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Sharon is right. *If* California is given a bailout, it should be on very specific terms - with the money going directly to the people and ideally someone needs to step in and force the CA Legislature to act like the grown ups they supposedly are.
This budget fiasco has been ongoing for a lot longer than simply the Governator (sorry, Arnold, but I still can't spell your name) or Davis (some sources say as long as 20 or so years). It's one of those deep seated political messes that everyone has ignored - largely because the solution means at least in part standing up to California's tax revolt. A long term solution means getting the 2/3 budget vote requirement AND Prop 13 both repealed - along with getting the people (and the Republicans) to admit that at least SOME taxes are both a good thing and very necessary for functional government. A long term solution for functional government and society also means convincing many of these same people that social programs, while currently in need (perhaps) of improvement, ARE necessary and NOT optional. Government budgets are just like personal ones - the necessities and fluff might be different, but there's still necessities and fluff. The CA Legislature needs to learn the difference along with how to invest in the state's future.
Posted by Danetta Amschler on 06/19/2009 @ 07:30AM PT
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