Auditor: California $127 billion in the red

Bankruptcy - exitMarch 29, 2013

By John Seiler

It’s official: California is broke. According to a new report by state Auditor Elaine Howle:

“unrestricted net assets totaled a negative $127.2 billion. Restricted net assets are dedicated for specified uses and are not available to fund current activities. Almost half of the negative $127.2 billion consists of $57.5 billion in outstanding bonded debt issued to build capital assets for school districts and other local governmental entities. The bonded debt reduces the unrestricted net assets; however, local governments, not the State, record the capital assets that would offset this reduction.”

So, the state owes $127 billion.

By comparison, General Motors was $173 billion in debt when it filed bankruptcy in 2009.

And Lehman Bros. went belly up in 2008 with $613 billion in debt, sparking the financial crisis from which we still haven’t recovered. The recent stock-market record prices only reflect the debased value of the dollar.

If you look around California, you can see the decay everywhere. The “freeways” are clogged. A friend of mine who recently drove around Texas said the traffic moved smoothly almost everywhere.

The roads in California are crumbling. Yesterday I was shocked at how Harbor Boulevard in Orange County had deteriorated. The macadam was cracked and crumbling in many places.

How can that happen in a county where the median home price is more than $400,000? It happens because the government at all levels is exceedingly badly run. Everything costs too much and goes to the wrong areas, such as pension spiking.

San Francisco is even wealthier that Orange County, with a median home price well above $700,000. Yet when I visited there last November, Pelosiland looked run down.

Voters have only themselves to blame for passing absurd bond measures that run up debt and electing delinquent legislators caring only to pad the pockets of the government-worker unions.

It’s a shame because the physical beauty of the state remains breathtaking. But the government part should be taken to bankruptcy court.


Tags assigned to this article:
Elaine HowleGeneral MotorsJohn SeilerLehman Bros.

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