…can sure be expensive.
I was born and raised in Michigan, but I’ve felt like a Californian for the past thirty years or so. I weep when I see what corrupt politicians and ignorant voters have done to a once-great state.
11 thoughts on “Running A Failed State”
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Without clicking the link, I couldn’t tell if you were speaking of Michigan or California.
That’s why you click the link…
But now that I think about it, I’ve spent most of my life in one or the other failed states. But when I was younger, both of them were much better. Michigan was a great place in the sixties, overall, before the poison injected back in the thirties by the Wager Act finally started to kill the auto industry.
And you moved there voluntarily? At least I have the excuse of having been born in NJ.
When CA defaults on its debt it’s going to be really ugly. Either the muni credit market goes into freefall or the Fed bails themout and fiscally responsible States go apeshit politically. Expect Texas to lead a lynch mob.
It’s not ugly, Brock — it’s historic.
The United States used to be pretty cool too….
As a CA resident, I’m not sure things are quite as bad as Brock thinks although I could easily be wrong. IIRC the Prop. 13 limits on property taxes don’t apply to bonds, which is why bonds so damned popular here.
My biggest concern is keeping the state prisons open.
My biggest concern is keeping the state prisons open.
I think we should be a little more selective about who we put into them (e.g., victims of the War On (Some) Drugs). Also, we need to break the guard’s union.
“Expect Texas to lead a lynch mob.”
I’d rather go back to our 4th flag.
> IIRC the Prop. 13 limits on property taxes don’t apply to bonds, which is why bonds so damned popular here.
Prop 13 is about taxes. Bonds allow “spend now, pay later”, so Prop 13 does apply, when the bonds have to be paid back.
Frankly, I’m hoping for default, with an ugly combination of bond owners foreclosing and losing money. We can’t rely on the political class to have restraint, so we have to teach the money lenders to impose it by not loaning.
And, if they’re not willing to do so stop feeding the monster, they should lose their money, repeatedly if necessary.
Ain’t going to happen, Andy. The bondholders are for the most part wealthy Democratic donors and union pension funds. Everyone in Sacramento is so in their pocket.
Obviously we need a Prop 13 to close off the bond-selling loophole. If the State can’t raise the money in current-year taxes, then it shouldn’t be able to spend it, full stop. Or at the least, it should be made unconstitutional to sell general bonds, i.e. those repaid out of the general fund, instead of revenues from whatever project the capital for which they’re supplying.
Alternatively, I like the idea that if a state budget is unexpectedly short, then legislators are forced to make up the difference out of their own pockets, garnishing their wages and pensions as far into the future as necessary. Imagine how much more careful they’d be if their own personal assets were on the line, instead of merely ours!
“Prop 13 is about taxes. Bonds allow “spend now, pay later”, so Prop 13 does apply, when the bonds have to be paid back.”
No (but I could be wrong here), bonds are paid back on property taxes raised outside and above the Prop. 13 limits. A loophole, as Carl Pham puts it.
IANAL, just a home owner who has to pay California property taxes.