Saturday, October 04, 2008

A Brand New Dance Now

The governor of California is asking Congress for an estimated seven billion dollars because in his lean, mean, low-taxing machine, there is suddenly not enough money to run the State.

According to the Treasurer of California:

"California may be forced to halt or significantly delay payments for teachers' salaries, nursing homes, law enforcement and 'every other state-funded service. . .'"

I can imagine all of those public servants, including the groundskeepers and cafeteria workers, missing a paycheck and filing for unemployment benefits. --Of course there would be no one on hand to process the paperwork.

Just like the private bailout, this is being framed as a loan, in this case a short term one. So if we "print money" to give to California, and then they pay it back, it could be removed from circulation with no harm done right? Except I don't think it works that way, I think that the money supply will just expand that much faster.

And California can't be the only place with liquidity issues. Get ready for the rest of the States with skinflint "small government" legislatures to hold out their hands on the Beltway breadline.

The bailout boogie is just beginning.

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