The state of California — its deficits ballooning, its lawmakers intransigent and its governor apparently bereft of allies or influence — appears headed off the fiscal rails.
Since the fall, when lawmakers began trying to attack the gaps in the $143 billion budget that their earlier plan had not addressed, the state has fallen into deeper financial straits, with more bad news coming daily from Sacramento. The state, nearly out of cash, has laid off scores of workers and put hundreds more on unpaid furloughs. It has stopped paying counties and issuing income tax refunds and halted thousands of infrastructure projects.
This is or was the 5th biggest economy in the world. This is not Iceland, or Latvia. Events are running out of control. By the time Peacenik posts this, Ireland could have defaulted, and GM could have declared bankruptcy. The inability of politicians to compromise, or face reality is shocking. This is what happens when the ideologues rule. Here's what Krugman's says on his blog:
"Apocalypse now"
"Everyone should be paying attention to the political/fiscal catastrophe now unfolding in California. Years of neglect, followed by economic disaster — and with all reasonable responses blocked by a fanatical, irrational minority.
This could be America next."
Can any country survive a default by America? Or California? This is Canada's biggest trading partner. Peacenik neeeds to calm Peacenik. Peacenik is not a Doomer. Peacenik is not a Doomer. Peacenik is not a Doomer.
