California's Parent Trigger Law: Compton Parents Take on the Public Scho...

While I have a real issue with taxpayer dollars going to illegal aliens at least these parents give a sh*t and are trying to keep their children from costing us $47,000 when we incarcerate them because they are uneducated and choose a life of crime.

The Golden State? Bill Simon Explains Fiscal Challenges Facing California

A Path Is Sought for States to Escape Debt Burdens

MARY WILLIAMS WALSH,
On Thursday January 20, 2011, 8:56 pm EST

Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.

Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign.

But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.

Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care. Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by Congressional aides.

Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout. Along with retirees, however, investors in a state’s bonds could suffer, possibly ending up at the back of the line as unsecured creditors.

“All of a sudden, there’s a whole new risk factor,” said Paul S. Maco, a partner at the firm Vinson & Elkins who was head of the Securities and Exchange Commission’s Office of Municipal Securities during the Clinton administration.

For now, the fear of destabilizing the municipal bond market with the words “state bankruptcy” has proponents in Congress going about their work on tiptoe. No draft bill is in circulation yet, and no member of Congress has come forward as a sponsor, although Senator John Cornyn, a Texas Republican, asked the Federal Reserve chairman, Ben S. Bernanke, about the possiblity in a hearing this month.

House Republicans, and Senators from both parties, have taken an interest in the issue, with nudging from bankruptcy lawyers and a former House speaker, Newt Gingrich, who could be a Republican presidential candidate. It would be difficult to get a bill through Congress, not only because of the constitutional questions and the complexities of bankruptcy law, but also because of fears that even talk of such a law could make the states’ problems worse.

You can read the rest of the article here.

Sac Bee - Editorial: Bell tolls for unemployment insurance fund

California's solution for its high unemployment:

1. ask the Feds for more money to pay unemployment, and
2. not repay the $15B they have already borrowed.

Its a good thing Nancy is no longer the Speaker because California's request won't be tacked onto a spending bill for defense or some other "essential" piece of legislation or will it?

There are currently 30 other states that have also borrowed from the Federal Government to pay the first 26 weeks of unemployment. The primary reason these states don't have the money is because the unemployment is so high in some states that there is not enough money coming in to pay all of the unemployment claims. But in some  cases like New Jersey, the state legislatures "borrowed" (i.e. robbed) the unemployment fund so they could pay for other things without having to cut spending or raise taxes to close budget deficits in years past.

I am quite sure that some of those other states mentioned in the editorial are Red states and that their dually elected Representatives in Congress will want to make sure that their constituents continue to get paid unemployment. Why? Because all politicians both Republican and Democrat fear one thing....unemployment.... for themselves.

But when does it stop? It doesn't and that you see is the root of the problem. The Federal government will continue to borrow from foreign nations until those nations lose all confidence in the dollar, which will mean the Federal Reserve will have to buy all of our debt not just the $600B they promised to do last week. 

Ladies and Gentlemen when that happens it is game over for America.

Bell tolls for unemployment insurance fund

It doesn't get as much attention as the state's massive budget deficit, but the red ink threatening to bankrupt California's unemployment insurance fund is almost as big, estimated to be more than $15 billion by the end of the year. If state unemployment continues at 11 percent to 12 percent, as expected, the UI fund deficit will balloon to $21 billion by the end of 2011.

Whatever legislators do to address the growing shortfall will be painful for the state's unemployed workers, employers and California's battered economy. And yet doing nothing is not a smart option. The state has borrowed billions from the federal government to keep unemployment benefits flowing. If that money is not repaid by 2012, Washington could recoup the money automatically by raising the federal unemployment insurance tax on employers.

In its new report, "California's Other Budget Deficit," the Legislative Analyst's Office lays out the stark options facing state lawmakers: reduce benefits to unemployed workers or raise the taxes of employers or both. The latter is the most responsible solution.

California legislators clearly miscalculated in 2001 when they doubled unemployment benefits without raising taxes to pay for them. Still, while California's maximum benefit of $450 a week is high, the average actually paid is less – $307 a week, just $10 more than the national average. And, when California's high wages and high cost of living are factored into the calculation, state benefits replace a smaller share of a laid-off worker's wages here than in most other states.

As the debate rages about whether benefits or taxes are too high or too low, what's indisputable is that the tax revenues and benefit levels as they currently stand are hugely out of whack. Something needs to be done to bring them into balance.

The LAO report recommends sensible but politically difficult solutions. Among its recommendations, raise the taxable wage base from $7,000 to $10,500 a year and increase employer tax rates. Decrease the maximum benefit from $450 a week to $338 and increase the minimum level of wages paid to qualify for benefits from $1,125 in 12 months to $3,680.

The proposal advanced would require an equitable sharing of the burden. Yet it would require lawmakers to possess a degree of political backbone that isn't yet in evidence.

The tax increase on employers would require a two-thirds vote in the Legislature, something neither Democrats nor Republicans want to approve, not in the midst of a continuing recession. They won't want to cut unemployment benefits either, given the high number of their constituents out of work.

Senate President Pro Tem Darrel Steinberg says he will urge state leaders to lobby California's congressional delegation instead to keep the federal unemployment insurance funds flowing and to delay or forestall repayment of the money the state has borrowed. That's a humane response, but it doesn't do much to counter California's reputation as a "nation state" that can't manage its finances.

In the midst of the worst economic downturn since the Great Depression, Steinberg and other state leaders are hoping the federal government will keep bailing out California and 30 other states that also have huge unemployment fund deficits. It's a gamble, one that could fall hard on the state's employers – and the state's economy – if the federal government insists on repayment and raises the unemployment insurance tax on its own.

 

 

 

 

 

 

 

California Teachers' Fund May Cut Return Forecast to 7.5% Following Losses

Thank goodness Nancy is no longer the Speaker because when this pension fails, and it will fail, the bailout money would have been attached to a required spending bill for vetrans or seniors by the Democrats so that it would get passed by Congress.

California Teachers' Fund May Cut Return Forecast to 7.5% Following Losses
By Michael B. Marois

The California State Teachers Retirement System, the second-largest U.S. public pension, will consider cutting its expected earnings rate on investments to 7.5 percent, increasing the need for higher contributions as it recovers from market losses.

The $132 billion pension fund’s governing board will consider approving a new rate of return, now 8 percent, at its Nov. 5 meeting in Sacramento, according to its agenda. The so- called assumed rate of return on investments is used to calculate the size of pension contributions from employers needed to pay retirees.

Public pension funds across the U.S. are adjusting their assumptions following losses in the recession that within three years may leave them $1 trillion short of the amount needed to pay benefits, according to a National Bureau of Economic Research report. The largest fund, the California Public Employees Retirement System, known as Calpers, uses a 7.75 percent assumed rate of return.

“The impact of reducing the assumed investment return and assumed inflation rates will result in a better representation of the fiscal condition of Calstrs benefit programs based on the current economic outlook,” the fund’s actuary Rick Reed said in a report to be presented to the board.

Calstrs, as the teachers’ fund is known, is 78 percent funded, meaning it is short by more than $42 billion. Reducing the assumed rate of return would lower that funding level to 74.2 percent, according to the report posted on the fund’s website.

Higher Contributions

The fund, which provides benefits for 848,000 public-school and community-college teachers, would need to ask lawmakers for an increase of as much as 16.8 percent in the amount the state and school districts pay toward employee retirement benefits if the board adopts the 7.5 percent assumed rate of return. Teachers are likely to be asked to pay more from their paychecks as well.

The teachers’ fund earned 12.3 percent in the year that ended in June, after losing 25 percent in fiscal 2009 and 3.7 percent in 2008.

Fewer than half of the public pension funds in the U.S. had assets to cover 80 percent of promised benefits in fiscal 2009, according to data compiled for last month’s Cities and Debt Briefing hosted by Bloomberg Link.

New York’s $124.8 billion pension fund, the nation’s third- largest, in September reduced its assumed rate of return to 7.5 percent from 8 percent. Calpers will review its 7.75 percent rate of return in February.

Business Insider- California Is Broke: 19 Reasons It May Be Time For Everyone To Leave The State For Good

After decades of mismanagement by both liberal Democrats and RINOs, California, like Europe, is just plain broke. 

How did it happen? How is it possible that a state built by the 49ers, not the football team although they were once great too, is now known more for the amount of 99ers it produces each month rather than the latest innovation from silicon valley? The answer is simple. The politicians raised very type of tax known to man so they could pay for all types of social experiments and the citizens let them do it because they were creating a better society.

Well ladies and gentlemen here is what a better, kinder society looks like and believe me it isn't pretty but rather downright depressing.  

California Is Broke: 19 Reasons It May Be Time For Everyone To Leave The State For Good
Michael Snyder, The Economic Collapse

Back in the 1960s and 1970s, there was a seemingly endless parade of pop songs about how great life was in California, and millions of young Americans dreamed of moving to the land of sandy beaches and golden sunshine.

But now all of that has changed. Today, millions of Californians are dreaming about leaving the state for good. The truth is that California is broke. The economy of the state is in shambles.

The official unemployment rate has been sitting above 12 percent for an extended period of time, and poverty is everywhere. For many Californians today, there are very few reasons to stay in the state but a whole lot of reasons to leave: falling housing prices, rising crime, budget cuts, rampant illegal immigration, horrific traffic, some of the most brutal tax rates in the nation, increasing gang violence and the ever present threat of wildfires, mudslides and natural disasters.

The truth is that it is easy to understand why there are now more Americans moving out of California each year than there are Americans moving into the state. California has become a complete and total disaster zone in more ways than one, and an increasing number of Californians are deciding that enough is enough and they are getting out for good.

Sadly, the state of California is facing such a wide array of social, economic, and political problems that it is hard to even document them all. It is really one huge gigantic mess at this point.

Just consider the following facts about what life is like in the state of California today....

Click here to see the facts >

LA Times - $69 million in California welfare money drawn out of state

It is any wonder that California is bankrupt. It just goes to show that the liberal utopia known as California is a complete failure. I wonder what an investigation of liberal bastions like New Jersey and New York would turn up.

$69 million in California welfare money drawn out of state-Las Vegas tops the list with $11.8 million spent at casinos or taken from ATMs, but transactions in Hawaii, Miami, Guam and elsewhere also raise questions. Officials say budget cuts hinder investigations.

By Jack Dolan, Los Angeles Times

Reporting from Sacramento — More than $69 million in California welfare money, meant to help the needy pay their rent and clothe their children, has been spent or withdrawn outside the state in recent years, including millions in Las Vegas, hundreds of thousands in Hawaii and thousands on cruise ships sailing from Miami.

State-issued aid cards have been used at hotels, shops, restaurants, ATMs and other places in 49 other states, the U.S. Virgin Islands and Guam, according to data obtained by The Times from the California Department of Social Services. Las Vegas drew $11.8 million of the cash benefits, far more than any other destination. The money was accessed from January 2007 through May 2010.

States Are Poised to Be Next Credit Crisis for US: Whitney

Here comes the next $ Trillion bailout Ladies and Gentlemen.



States Are Poised to Be Next Credit Crisis for US: Whitney

Crippling debts and deficits are about to make individual states the next casualty of the credit crisis, analyst Meredith Whitney told CNBC.

 

Speaking as her firm, Meredith Whitney Advisory Group, just released a lengthy report on the state of the states, the noted financial analyst compared the looming explosion to the collapse of the financial system in 2008 and 2009.

"The similarities between the states and the banks are extreme to the extent that states have been spending dramatically and are leveraged dramatically," she said. "Municipal debt has doubled since 2000, spending has grown way faster than revenues."

Whitney also offered another warning about banks, saying a sharp dropoff in trading revenue and a double-dip in housing would hammer at fourth-quarter earnings.

But she reserved her harshest words for the states. She said the paper released Tuesday was the culmination of two years' work by her firm and was made even more difficult by the lack of reliable data on state spending and debt.

"It reminded me so much of the banks pre-crisis that we just kept working at it," she said. "We couldn't find anything that gave us a clear story, we couldn't find any information that was transparent. So we did it ourselves."

There were some bright spots: Texas, Virginia and Nebraska were among states that have done a good job of controlling their finances over the years and aren't threatened as much.

But other states, such as California and Michigan, will burden the entire country should the federal government decide to step in with a bailout. States are required to balance their budgets, but massive debt-service payments could prevent that from happening in many states and necessitate the federal government to step in.

"You have to look at the states and the risk that the states pose, because the crisis with the states will result in an attempt at least for the third near-trillion-dollar bailout," Whitney said. "That has consequences on the dollar, that has consequences on just about everything. It certainly has consequences on the US recovery."

"Imagine you're conservative, fiscally sound Nebraska and you have to bail out California, or you're fiscally conservative Texas and now you have to bail out Michigan," she added.

On the banks, Whitney reiterated her call that some 80,000 financial services jobs will be lost this year, based on an expected 25 percent sequential decline in equity trading and "low single-digit" returns on equity.

On top of that, she said housing numbers will begin to worsen. The monthly Standard & Poor's/Case-Shiller housing report earlier in the day signaled that home prices were flattening but stabilizing; Whitney said that reading is going to get progressively worse.

"This quarter is going to be unique for the banks because this will be the last quarter when they can dodge the credit bullet," she said. "We think October, after the banks report, you'll see a really ugly Case-Shiller number, which means the fourth quarter is going to be very tough for banks."

School unions put jobs before students' welfare...again

Are we even surpised anymore when we see these types of things from the school unions.

As the fiscal year ends, California is facing a crisis, with no budget…and a $19.1 billion…deficit…Brown's Solution “The process is the plan,”

California welfare cards can be used in many casino ATMs

Is it any wonder why we are failing as a society when the government allows things like this to occur.

From the LA Times

Reporting from Sacramento — California welfare recipients are able to use state-issued debit cards to withdraw cash on gaming floors in more than half of the casinos in the state, a Los Angeles Times review of records found.

The cards, provided by the Department of Social Services to help recipients feed and clothe their families, work in automated teller machines at 32 of 58 tribal casinos and 47 of 90 state-licensed poker rooms, the review found.

http://www.latimes.com/news/local/la-me-welfare-casinos-20100624,0,6190326.story?track=rss

Arizona to LA Officials- I hope you're well stocked up on candles

It may get really hot this summer in LA if the boycott of Arizona stands.

From the Hot Air Blog http://hotair.com/
AZ utility board member responds to LA boycott over SB1070
by Ed Morrissey

The Los Angeles City Council voted to boycott the state of Arizona over its new immigration-enforcement law, and now the Arizona Corporation Commission has responded. Gary Pierce, one of the commissioners chosen in state-wide elections to the utility regulation panel, notes that Los Angeles gets about 25% of its power from Arizona producers. If the City of Angels really wants a boycott, Pierce offers his services to help, as he explains in a letter to Mayor Antonio Villaraigosa and copied to Hot Air:

Dear Mayor Villaraigosa,


I was dismayed to learn that the Los Angeles City Council voted to boycott Arizona and Arizona-based companies — a vote you strongly supported — to show opposition to SB 1070 (Support our Law Enforcement and Safe Neighborhoods Act).

You explained your support of the boycott as follows: “While we recognize that as neighbors, we share resources and ties with the State of Arizona that may be difficult to sever, our goal is not to hurt the local economy of Los Angeles, but to impact the economy of Arizona. Our intent is to use our dollars — or the withholding of our dollars — to send a message.” (emphasis added)

I received your message; please receive mine. As a state-wide elected member of the Arizona Corporation Commission overseeing Arizona’s electric and water utilities, I too am keenly aware of the “resources and ties” we share with the City of Los Angeles. In fact, approximately twenty-five percent of the electricity consumed in Los Angeles is generated by power plants in Arizona.

If an economic boycott is truly what you desire, I will be happy to encourage Arizona utilities to renegotiate your power agreements so Los Angeles no longer receives any power from Arizona-based generation. I am confident that Arizona’s utilities would be happy to take those electrons off your hands. If, however, you find that the City Council lacks the strength of its convictions to turn off the lights in Los Angeles and boycott Arizona power, please reconsider the wisdom of attempting to harm Arizona’s economy.

People of goodwill can disagree over the merits of SB 1070. A state-wide economic boycott of Arizona is not a message sent in goodwill.

Sincerely,

Commissioner Gary Pierce

http://hotair.com/archives/2010/05/18/az-utility-board-member-responds-to-la-boycott-over-sb1070/

Update on the People's Republic of California

Urban Dictionary- Quasi-communist state loosely associated with the United States of America. Located South of Oregon and West of Arizona and Nevada. Home of all the fruitcakes and malcontents from the rest of the US. Noted for horrible drivers and a porous border. Largest non-English speaking population in the US.

One only has to look at California to see the rest of the country's future thanks to the socialist agenda which has shaped that state's failed policies.

California's economy is the largest of any state in the US, and is the eighth largest economy in the world. As of 2008, the gross state product (GSP) was about $1.85 trillion, which accounted for 13% of the United States gross domestic product(GDP). However, California's economic recovery is predicted to lag behind the nation's in 2010. Economists at the UCLA Anderson School of Business predict that California's economy will only begin to increase when U.S. consumers start buying again and goods come through the region's ports and transportation hubs, so do your duty America and buy some cheap Chinese crap on your credit card, if you still have one, to help California's economy. The state's unemployment rate won't fall below double digits until 2012, economists predicted.

So my question is how are people supposed to buy things when they are unemployed, gas prices will be above $4 by Memorial Day, and their homes aren't worth crap? They can't and I don't need a degree in economics to know that! But the news gets better, because the City of Los Angeles is actually broke. Yes, they are completely broke:

The city's top financial official issued a grim assessment of the escalating budget crisis Monday, warning that Los Angeles could be unable to pay its bills in just over four weeks.City Controller Wendy Greuel declared an "urgent financial crisis" and said the only way to continue paying bills in the short term was to begin to drain the city's already limited emergency reserve.

http://www.latimes.com/news/local/la-me-la-city-budget6-2010apr06,0,2012176.story?track=rss

As if the news wasn't bad enough in the City of Angels we get this from Sacramento:

According to a new report by a group of Stanford University graduate students,the shortfall facing California's public pension systems could reach more than half a trillion dollars over the next decade and a half. A summary of the report, released Monday, also said the current recession has cost the three systems — for the state's public employees, schoolteachers and University of California workers — $109.7 billion in lost investment value. The report says the systems' basic growth assumptions are too rosy. The report was prepared for Gov. Arnold Schwarzenegger, who has made pension reform a top issue his last year in office. Because pension benefits are guaranteed, the state's general fund, facing a $19 billion deficit through next summer, must make up any shortfalls.

http://www.mercurynews.com/ci_14825500?source=most_emailed&nclick_check=1

First there was Bear Sterns. Then Fannie and Freddie. Then AIG and the TARP programs. Finally the American Auto Industry. Can you see what's coming next, ........the "California Cleanup" ....the latest and greatest bailout by the Federal government (thank god they don't have to balance the federal budget and they can print money otherwise it would be broke too), which will be pushed through Congress by the Speaker of the House (Democrat from California) and our President who needs those 55 electoral votes if he wants a snowballs chance in hell of beating whatever piece of crap the GOP nominates (Romney currently leads the polls but do we really want the guy who created Obamacare before it was known as Obamacare as our next President).

How's the future look America aren't you excited about our future!

Me neither which is why I have plan. When, not if, Texas secedes I'm moving there if they'll have me. http://www.texassecede.com/ Care to join me.

8th Largest Economy in the World is on the Brink of Bankruptcy- Say bye bye California

California Is Bankrupt!!! But The Greedy Banks Are Being Blamed For Not Accepting Its IOUs?

It was less than a year ago that our leaders blamed the banks for our current depression. Congress said it was the greed of Wall Street bankers that lead us to where we are today and made a big show of it before the television cameras showing how they were going to punish those greedy bankers. While its certainly true that banks played it fast and loose with lending standards and allowed many unqualified people to buy homes that they couldn't afford, they weren't solely to blame. As Fred Lucas of CNSNews.com reported yesterday Congress was equally to blame:

"Fannie Mae and Freddie Mac were the chief culprits in the housing crisis because they encouraged people who could not afford payments to borrow money, according to a congressional report released Tuesday." http://www.cnsnews.com/public/content/article.aspx?RsrcID=50680

Now I wouldn't hold by breath if you expect Congress to hold hearings on its own culpability anytime in the near future.

So lets fast forward to today and we see that California, that utopia of liberal thinking and policies, is as broke as some third world nations. California needs to close a $26 Billion budget gap and there seems to be no resolution in sight. But in the mean time it has to pay its bills so it began issuing IOUs to state contractors to keep them working. These IOUs are redeemable for the face value plus 3.75% annual interest but not until October. Banks in California have decided that they will redeem these IOUs only until Friday, July 10th. After Friday they are only going to offer loans to the holders of the IOUs.

Now if you look at it from the banks' perspective there is a good chance that California may not be able to resolve its fiscal crisis by October and therefore the IOUs may not be worth the paper they are printed on. Also banks, after being burned by the housing crisis, are extremely risk adverse at this time and frankly do not have the cash reserves to float the state's obligations. But rather than seeing the logic of the banks' positions and commending them for being fiscally responsible they are being made out to be Ebenezer Scrooge. http://online.wsj.com/article/SB124692354575702881.html

I hope the Banks stand fast, as they should, because ultimately they are responsible to their shareholders not the politicians in Sacramento.

PS- California, if it was its own nation, ranks as sixth in the world based on GDP. The fact that it is bankrupt shows what is going to happen to the rest of the country if we keep pumping money into entitlement programs.