California goes bust: Tax refunds to be delayed
posted at 4:40 pm on January 16, 2009 by Allahpundit
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Not just refunds, either. Welfare checks and student grants will be held back, too. Let it be a lesson to those of us who pay estimated tax, me most of all: In these trying times, don’t overpay.
Instead, ask yourself, “What would Tim Geithner do?”
The controller said the suspended payments could be rolled into IOUs if California still lacked sufficient cash to pay its bills come March or April.
“I take this action with great reluctance,” Chiang said at a news conference in his office. But he said that without action to close the deficit, “there is no way to make it through February unscathed.”
There’s a hitch with the IOUs, though:
In 1992, banks honored the state’s IOUs, cashing them on demand, and then receiving an additional 5% from the state when it made good on the obligations. In effect, the IOUs served the state as unsecured bridge loans from banks. But this time around, with credit tight and banks still feeling the impact of the fall meltdown in the financial services industry, it is not yet clear how banks will respond.
“Nobody’s making any decision whether ‘Bank X’ will take the IOUs as money or not,” said Brian Tobin, a Culver City based tax preparer.
I hereby formally open the pool on guessing which date California will be bailed out. I’ll take February 28. Exit question: Where’s the recall petition for Arnold?
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Wonder if Obama will folow his lead.
Watched this on Letterman last night:
http://www.huffingtonpost.com/2009/01/16/letterman-presents-final_n_158705.html
Thank God he is over.
getalife on January 17, 2009 at 1:12 PM
“Where’s the recall petition for Arnold?”
I got it in my back pocket, next to the UC bill.
Christine on January 17, 2009 at 1:19 PM
I voted McClintock
NTropy on January 17, 2009 at 1:39 PM
Hey California, you get what you vote for. Maybe its time to stop smoking pot and pay attention to what is really going on.
ctmom on January 17, 2009 at 2:24 PM
Folk should pay their Estimated State Taxes with these worthless IOU’s.
JIMV on January 17, 2009 at 3:26 PM
Sounds like Mexico to me. Don’t you enjoy the diversity?
/
funky chicken on January 17, 2009 at 4:45 PM
California is toast…
Liberals gave free medical care to ALL of the illegals
Liberals Forced all the companies to leave by raising taxes
Liberals Forced the military out (berkley) comes to mind
Liberals Enforced crazy environmental laws on us Citizens
But ALLOWED 20 million mexicans to TRASH the entire border
Liberals would not allow the us to drill for oil off our own COAST so we had to pay 140 $ a barrel to the arabs
Which destroyed the economy
Liberals Forced all the banks to LOAN money to
people with no id
people with fake social security numbers
people who were obviously illegals
Drug dealers, prostitutes, arabs who came in illegally
And after all of this they elected
arnold who promised he could balance the budget.
With what you morons..????
A majic wand?
California deserves to be handed back to mexico..
as long as all of its citizens and hollywood actors
Go along with it..
See if the mexicans will pay your exorborant salaries.
More than likely the drug lords will start kidnapping
all of the hollywood elitists
ahh one would hope so..
California is TOAST..
jcila on January 17, 2009 at 6:11 PM
I meant to add
if we (meaning the REST of the USA are lucky)
When the mexicans take back california
Hopefully The drug lords
Will kidnap ALL of the liberals and the moronic hollywood actors
And then ask for randsome..
my answer would be
We will pay you to keep them,..
jcila on January 17, 2009 at 6:13 PM
Me too.
Amen.
Kalifornia Kafir on January 17, 2009 at 9:26 PM
As did I…then I moved to Nevada.
Saltysam on January 17, 2009 at 10:11 PM
Arnie Schwartzenkennedy and the leftists won’t EVER get it…. if you stop funding Illegal Alien’s education and medical Care, TAHAAAA…there goes your deficit!
nelsonknows on January 17, 2009 at 10:55 PM
it’s called COMMIEFORNIA for a reason!
nelsonknows on January 17, 2009 at 10:55 PM
When after our USAF wanderlust years of never living at a place for more than three years and sometimes 6-8 months, my “Mickey Mouse Club” dream had materialized in a lovely home with a sparkling pool, which I dearly love and enjoy.
We are currently making plans for our exit from this former dreamland with much sadness…I hope no more libs will infect our future home state and I’m glad to be old so I will not live this but despair for my kidlets.
Good-bye, Golden State
YankeeinCA on January 17, 2009 at 11:51 PM
Another example of whose money it really is by our elected government. It’s amazing that our economy has turned into one big credit card. I thought having good credit was the golden rule for financial success. I really wish I would have bought that house that I couldn’t afford a couple of years ago. Now I am stuck paying my bills.
Badbrucskie on January 18, 2009 at 12:22 AM
When all the tax paying citizens have torched their houses to collect the insurance than Kalifornia will be a burnt shell of it’s former self.
All you can “hope” for is the big one to hit soon to put many more
out of their misery.
izoneguy on January 18, 2009 at 10:16 AM
Last time I noticed, California had the 5th largest economy in the world and dominated the worldwide film and computer technology industries.
In reality, most Americans didn’t care about illegal immigration until those immigrants started moving beyond the southwest border states. People didn’t see the problems of California and Arizona as their problems. Until recently, the border states had inadequate federal protection against the immigration wave. And far more so than liberals, it was agribusiness that did the most to relax laws and law enforcement in order to ensure an oversupply of cheap migrant labor to bring in annual crops. This has meant cheap produce for the entire country, but California has been stuck with the tab for education, health care, and other expenses related to immigrant families.
The biggest reason for California’s fiscal problems- it takes a simple majority of the legislature or a ballot initiative to approve new spending, but a 2/3 majority of the legislature to approve a tax increase. It doesn’t take genius to realize why this system doesn’t work.
Before any fed money goes to any state, the federal government should require that such patently stupid rules be changed. Otherwise, California should get nothing.
foreverright on January 18, 2009 at 1:42 PM
You’re totally right.
Look at how much this country spends on paying interest on the national debt- 10% of total GNP (a number that has doubled under Bush). It’s completely unacceptable- and the Chinese don’t give us any kind of tax credit on interest payments, like the feds do with your home loan. We need to bring *real* conservatives back in charge of the Republican party. Until that happens, the GOP will wander aimlessly and stand for nothing.
foreverright on January 18, 2009 at 1:47 PM
I hope I’m reading you wrong, but you seem to be saying that if we just give the democrats in CA unchecked power to just keep raising our taxes to meet higher and higher costs for the neverending cornicopia of benefits to illegals that our half hispanic government here keeps dealing out, that will solve everything? Is that right?
Let me describe what I will call an entitlement bubble. That is when you so many people collecting ‘free’ benefits from the government and so few people paying in, that the system essentially reaches the point where payments outpace revenues by such a large amount that not even selling bonds or borrowing like tomorrow don’t exist can cover the difference. That is where CA is right now. What will need to happen is for the state to stop paying these people benefits and tell them to get off their crack smoking ass and support themselves or get the hell out, the later defintely preferred!
Bikerken on January 18, 2009 at 3:22 PM
You’re addressing another issue- CA state spending is too high. However, the exact cause of the sate’s fiscal problem is an imbalance between what’s spent and what is collected in taxes. That is, not enough taxes to cover spending.
You may be right that too much money is wasted on social programs. But to rationalize a massive budget deficit / not raising taxes with that kind of argument is similar to saying that you’ll put expenses that you can’t afford on your credit card. Just because you pay for those charges with credit doesn’t mean you don’t have to pay for them through higher taxes. You’re just pushing back that responsibility to a later time or to a future generation.
On a national level, many conservatives have been applying the same logic in a massive economic experiment that’s mortgaging the nation out to China and other lenders. Just because you don’t agree with government spending doesn’t give you the right to keep taxes artificially lower than spending. Look at the collapse of every great nation / power, and you’ll see exactly this type of behavior going on. What are some people thinking? Our national debt will just vanish into thin air? I realize that the average person doesn’t have a finance degree but this should be common sense.
foreverright on January 18, 2009 at 4:09 PM
You know…I have many friends in cali..And I feel for them.
That said…many of them are of the leftist slant. And they continue to vote idiotic leftist in time after time after time.
You made your bed….
Now burn in it.
Handel on January 18, 2009 at 6:34 PM
I am one of those rare birds — a conservative trapped in California. Our problem is that our jobs hold us here, and even if they didn’t, trying to sell our home is virtually impossible.
We can’t afford to retire because of the high cost of living, so we are stuck unless we simply walk away from our house. It might come to that if we didn’t have this antiquated notion that honoring your commitments is important.
I resent paying for all the freeloaders. I resent our legislature spending like there is no tomorrow and then turning around to the citizens and demanding that we pay their bills. Whatever happened to the idea of living within your means?
Oh, I forgot. These are liberals we’re talking about. The kind that got hold of our national government and are (also) spending like there is no tomorrow. Pretty soon the whole country will be no better off than California. What do we do than? Give it all to Mexico and move somewhere else?
hachiban on January 18, 2009 at 10:17 PM
The bailout will be announced at the convention which chooses the Democrat candidate for governor. At that time Hollywood will release a mega music video based on that familiar communist theme “Let the rich pay, MAKE the rich pay.” Of course, after the election there will be no more rich in CA and the Bollywood will rule.
Annar on January 19, 2009 at 7:02 AM
So the bank takes the IOU from California and California defaults on the IOU. The bank forcloses on the state, fires all the state employees, and sells off it’s assets to other states, then puts the land up for sale. Yep, that works!
gordo on January 19, 2009 at 9:45 AM
State governments expecting federal bailouts p*sses me off more than I can say. I live in a small, poor, southern, backward state – so backward, in fact, that we long ago passed a balanced budget amendment to our state constitution. In practical terms this means that, when we see that we’re running out of money, supplies stop being purchased, nonessential programs are halted, and state employees are laid off. Because of these backward practices, we do not and cannot have a deficit.
Politically advanced, rich, coastal and northern states, however, *can* have deficits, because they are not backward southerners with outmoded notions of moral and fiscal responsibility. Now the people of our poor, responsible state are going to contribute, through their tax dollars, to bailing out our betters who live beyond their means. And when it’s all over we’ll still be hillbillies.
What a country.
Venusian Visitor on January 19, 2009 at 1:29 PM
Don’t blame me. I voted for Tom McClintock in Ahh-nold’s first election (the recall of Gray Davis election)
Edouard on January 19, 2009 at 2:05 PM
I am sorry but blaming this on just the legislature
is not correct..
Sure the legislature is packed full of liberal wakos..
But years ago since 1993 california was doing all it could to run any company it didnt see as green out of the state
It was so bad that companies moved just over the bridge to nevada or arizona
I saw a liberal news piece on this around 2000
So just blaming the liberals in the legislature in incorrect
The liberals on the street wanted and demanded that
these polluting companies were forced out
the manufacturers were forced out
they were calling for the us military to move out
Yes california has a huge economy
and most of it is being funneled to the illegals flooding the state
and now all there coffee drinking pot smoking
crack addicted illegal loving liberals
are crying because their isnt any more money?
Hmm go ask themexicans for their refunds..
MORONS
jcila on January 19, 2009 at 3:59 PM
I wish to explain i am not givingup on america
at least not yet.
there is 45 % of the country who still believe in
The freedoms our forefathers bestowed upon us.
but i am not going to sit here now and just let the liberals
blame all the conservatives for EVERY problem that they caused.
The lierals made their bed let them sleep in it..
But and i repeat BUT
To the people who are stuck and i am one of them.
1. stop investing in the stock market its rigged anyway
in my opinion you will not make those kinds of returns
2. cut your expenses by 1/3 – this means park the suv or sell it and buy a used 4 cylinder
3. pay off credit cards fast
4. get rid of unnecessary expenses (internet and cable are next on my list)
5. do what all the liberals do (get a legal tax shelter)
most if not all of the music stars do this..
You pay your taes but i claim every legal thing..
6. dump your 401k (or at least stop putting money into it)
Now i know they will say dont do it..
but i watched mine (and i dont have much) loose 25%
its gone.. you wont make it back because
even it the stock market came roaring back
everyone knows
The entire system stocks, bonds, are all rigged..
Hell did anyone watch the videos on youtube of all the liberals swearing how sound and safe freddie and fanny were?
Before barney franks and todd raped these too..
7. dump the home and take the loss. this is a last resort but may have to happen.
I am just starting this now..
turning my heat down to 60
and yes its cold but i cant feed the arabs
I cannot keep on using more gas and electricity and then borrow more money either from the chiense to pay the arabs
I have to draw the line someplace..
I am doing this because i see the future and it looks
Really really Bad..
And do not expect these liberal morons to save you.
Hell there so arrogant that the chief to head the IRS
doesnt pay his taxes and obama is ok with this..
So who do you think obama and pelozie and reid asnd the rest of these nutjobs are comming after?
Why you because you are rich..
you just dont know it..
and you dont have it either i will bet,.,.
jcila on January 19, 2009 at 4:12 PM
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