What happens when a state goes bankrupt?

Discussion in 'Economics' started by peilthetraveler, Dec 11, 2008.

  1. I just saw this article http://cbs13.com/local/state.deficit.41b.2.885169.html

    Basically it says that we no longer have an 11.2 billion dollar deficit, but we are looking at a 41.8 billion dollar deficit by next year. WTF? How did that happen? This basically means, that even if we DOUBLE the sales tax from 7.75% to 15.5% we STILL cant cover that deficit!!!! WHERE THE F**K DID THAT MONEY GO!?!?

    I have a pretty good idea. Yesterday i woke up to the sound of jackhammers outside my front door. What was it you ask? They were jackhammering the sidewalk, not all of it, just parts of it. Now just so you know...these sidewalks were brand new and just put in 6 months ago(my house was only finished 4 months ago!). I live in a new development where everything is brand new and there was nothing wrong with the sidewalks....no bumps, no cracks, no way to trip on anything...sidewalks were perfectly level and as we speak they are outside now paving what they jackhammered away yesterday. I would say they got about 10-15 guys out there doing this job right now, probably wasting 15 to 20k dollars.

    So I have a question now...what happens WHEN California goes bankrupt? Do basically all the bondholders get screwed or is there more too it? Does anyone lose their jobs? What happens with the social programs? Are the sick and dying going to suffer because of this?
  2. In Albany they shut down the ice rink this winter to save 150k yet the guv Patterson had some psy patient who was chief of staff who made more than that a year. Funny thing was, the chief of staff at one point thought he was an ice rink. They let had to let him go. Now we are out two ice rinks.
  3. tradersboredom

    tradersboredom Guest

    the state just can't borrow any new money.

    deficits would be finance by taxes.

  4. veggen


    Now that is funny! LOL
  5. What happens is New Zealand.

    The State or Country sells off its public assets - property, state-owned Corporations (airlines, rail, telecom etc) and land.

    Usually taxes and/or interest rates are jacked to offset lost revenue.

    Similar to Corporate Bankruptcy where its assets are liquidated to meet defaulted creditor obligations.
  6. The State of California will go bankrupt unless something is done to bring labor costs down. Raising tax rates even higher in this bad economy will just cause more private-sector workers to leave, as they have been doing it.
  7. They probably get a federal bail-out because California "is too big to go bankrupt" - - -
  8. TGregg


  9. BSAM


    I love California. It is truly sad to see what the so-called leaders in CA have allowed to happened. There is simply no excuse for this. The leaders/bureaucracy have, in a certain way, destroyed this once great land.

    Again, there is no excuse for what is happening in California. Period.
  10. Fucking liberals
    #10     Dec 11, 2008