What will eventually happen to states that are broke

[ProfJohn]

It's more like "I want this expensive leather couch and my budget won't allow it and I'm at the limit on my credit cards (=state budget ceiling). If they won't raise my limit, I could think about cutting back in non-essential areas but that will cause me problems with my family (=people who financed my election and need paybacks). In that case, I have no choice but to stop feeding my family (=lay off teachers and police) until they cave in to my demands, because they won't let my family starve.

They always trot out the "have to lay off teachers and police" threat because that's what will galvanize the public to pressure on the legislature. That way they don't have to make any tough choices.

Great post!!

Nailed it 100%.

 

[nageov3t]

It's more like "I want this expensive leather couch and my budget won't allow it and I'm at the limit on my credit cards (=state budget ceiling). If they won't raise my limit, I could think about cutting back in non-essential areas but that will cause me problems with my family (=people who financed my election and need paybacks). In that case, I have no choice but to stop feeding my family (=lay off teachers and police) until they cave in to my demands, because they won't let my family starve.

They always trot out the "have to lay off teachers and police" threat because that's what will galvanize the public to pressure on the legislature. That way they don't have to make any tough choices.

I thought it was the height of ridiculousness that they started laying off teachers before assistant assistant deputy super attendants individually making as much as a half dozen teachers.

 

[soccerballtux]

One of two things will happen. One, the federal government will start being a guarantor for the state debt, thus enabling the state to continue it's irresponsible and unsustainable spending habits. Two, the federal government could just print up some more billions and hand them to the states to spend.

Either way, the spending will continue until the federal government itself is no longer able to borrow money because of the immense debt burden. At that point, all bets are off and the economy is due for a full reset.

fed doesn't have to borrow, they can just create cash out of thin air to purchase the US Treasuries from the government. This is likely what will happen in such a scenario where the gov't can't find investors anymore.

 

[soccerballtux]

CA political system is messed up. There is 2/3rds requirement to pass a budget, so anyone can block or corrupt changes without taking any responsibility for it. This is where we are headed on national level with the filibusters. Power without responsibility leads to this.

Lol, it's simple majority to pass, 2/3rds to cut spending.

As usual, you do not know what you are talking about.

 

[Vette73]

Lol, it's simple majority to pass, 2/3rds to cut spending.

As usual, you do not know what you are talking about.

Quote for ironic fail. But its soccerballick, so its always fail post for him.



Section 12 of Article IV and Section 3 of Article XIII A of the California Constitution that says that in order to raise taxes or pass a budget, a two-thirds supermajority vote is required in the California State Legislature.

 

[PingSpike]

I thought a simple majority was all that was required to vote in new spending items in CA, but you need a 2/3s to actually pay for it...assuring the entire system is always fucked because you can pretty much always get 51% of the people to vote for any stupid horseshit but its hard as hell to even get 2/3s to want to pay for it.

 

[Slew Foot]

Quote for ironic fail. But its soccerballick, so its always fail post for him.



Section 12 of Article IV and Section 3 of Article XIII A of the California Constitution that says that in order to raise taxes or pass a budget, a two-thirds supermajority vote is required in the California State Legislature.

That law is great. The bad part is the 50% needed to pass new spending, it should be 2/3 as well.

 

[Vette73]

That law is great. The bad part is the 50% needed to pass new spending, it should be 2/3 as well.

Yep, it should be the other way around. If you want to increase spending it must be 2/3 vote or you must cut spending else where to break even.

So right now they can spend easy but can;t raise funds easy, and people whonder how they go into this mess.