Prop. 2 victory upgrades CA credit

Prop. 2 victory upgrades CA credit

Standard & PoorsIt has yet to be seen whether voter passage of Proposition 2 actually will improve California’s “rainy day fund.” Or whether it will go the way of Proposition 58 in 2004. The latter was then-new Gov. Arnold Schwarzenegger’s attempt to control state spending. Like everything else in his administration, it was an abysmal failure, with Arnold himself “terminating” the budget the next year with massive, record spending increases.

But for now, Prop. 2 is faring better, with a nod of approval from Wall Street. According to KPCC, “Standard & Poor’s Ratings Services has upgraded California’s credit rating a day after voters approved changes to the state’s rainy day fund. The agency raised the credit rating from ‘A” to ‘A+’ on California’s general obligation debt Wednesday.”

However, that shouldn’t green-light another Arnoldesque spending binge. Only New York and New Jersey — two other high-tax, high-regulation, wild spending states — have worse credit ratings.

According to the site of outgoing Treasurer Bill Lockyer, the last time California was raised to “A+” was in 2006, just before the global economic crash laid bare Schwarzenegger’s profligate ways by producing $20 billion-plus state deficits. The deficits downgraded the state in 2009 to “A.” In 2010, as Arnold finally was getting ready to leave office, the downgrade continued, to “A-.”

Things started getting better, back up to “A,” only in 2013.

According to Standard & Poor’s definition of both “A” and “A+”: “An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation is still strong.”

In other words, another economic calamity could bring back the $20 billion-plus deficits, draining even the newer, better rainy-day fund pronto. But the state’s ability to pay back the bonds remains high because its ability to tax even more of the stuffing out of its inmates remains strong.

28 comments

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  1. Ulysses Uhaul
    Ulysses Uhaul 6 November, 2014, 16:11

    Happy Days Here Again.

    Love that Al Jolson.

    Reply this comment
  2. LetitCollapse
    LetitCollapse 6 November, 2014, 17:57

    Yep. The State’s credit rating goes up while more residents are forced to file bankrupcy and lose their homes because they can’t afford to pay the damn taxes in this god forsaken State. So the citizens end up holding the empty bag and paying for the sins and mismanagement in Sacramento. But what else is new? You think the Republican victories on election day will change any of this??? haha. Think again. Nothing changes in a one-party system, except for going from bad to worse. Go Galt!!! 😉

    Reply this comment
    • SeeSaw
      SeeSaw 7 November, 2014, 12:07

      LIC, In what other states can you live where the property taxes are a little more than 1% of the purchase price, which then cannot increase more than 2% per year? My property taxes are $522/yr. Maybe you bought more than you could afford.

      Reply this comment
      • bob
        bob 7 November, 2014, 13:27

        My property taxes are $522/yr.

        Sawhorse, that’s because you’ve lived in the house 90 years.

        Try selling it and buying something similar at current market values.

        Reply this comment
        • SeeSaw
          SeeSaw 7 November, 2014, 18:35

          Yes, LIC, I have lived in the house for 50 years–without Prop. 13, the taxes would now be $4,000. But, still, property taxes are now a little over 1% of value and your tax bill cannot be raised over 2% per year–you will pay three times that, for the same property, in the state of WA. Before Prop. 13, the Assessor could reassess your property any time he wanted, and he was absolutely not fair about comparing like-properties. My property was valued $10,000 more than my neighbors, because my room addition had more square-footage, although the neighbor’s room addition had more designer-amenities. That said, I voted against Prop. 13, because I thought it was over-kill. There was a more-moderate alternative on the ballot that I supported. Don’t fuss about your property taxes in CA–they are as moderate as you are going to find. And, trust me, nobody, conservative or liberal, wants to abolis Prop. 13.

          Reply this comment
        • SeeSaw
          SeeSaw 7 November, 2014, 18:39

          Sorry. I should have addressed Bob. It seems like yesterday to today.

          Reply this comment
          • bob
            bob 7 November, 2014, 18:48

            That said, I voted against Prop. 13…

            Good thing you’re a trough feeder. If Prop 13 gets repealed at least you will still be able to afford the property tax with your gold plated pension.

            But remember, your beloved Demoncrats still may have it out for you. The words of Governor Lamb will always be around…. ‘…old people have a duty to die and get out of the way…’

  3. Skippingdog
    Skippingdog 6 November, 2014, 19:42

    Even if some crackpot wanted to “go Galt,” how would they do such a thing in late 2014? It’s nothing more than a wingnut pipe dream.

    Reply this comment
    • LetitCollapse
      LetitCollapse 7 November, 2014, 22:59

      Do you have access to the news? Over half the nation has already ‘gone Galt’. Less than 50% of the country pays Federal income taxes! hah. 50 million get food stamps. 1 put of every 2 collects a monthly government assistance check of some sort. Wake the hell up, old man! 😀

      Reply this comment
      • Skippingdog
        Skippingdog 9 November, 2014, 14:44

        Your claim ignores the fact that a large percentage of that 50% receives Social Security, SSDI, SSI, or is employed and has tax deductions, such as children, that relieve of eliminate their federal tax obligations. That’s hardly dropping out.

        Reply this comment
        • LetitCollapse
          LetitCollapse 9 November, 2014, 23:20

          Doesn’t make a damn bit of difference, Einstein. Living off the dole is living off the dole. And over 50% are living off the dole! And that’s ‘going Galt’. Somebody has to pay for all those parasites. And eventually your fat pension is going to get sliced and diced to make that happen! All these newly arrived illegals who can’t be deported need your help!!! HAH! I’ve gotten to the point that I don’t give a damn whether all of Mexico’s poor infiltrate our neighborhoods. I figure if it cuts into your pension benefits the more the merrier! And I am encouraging everyone I know to reduce their incomes and join Medi-Cal – a great healthcare plan with all the bells and whistles!!! And all for FREE!!! HAH! 😀

          Reply this comment
  4. desmond
    desmond 6 November, 2014, 19:51

    This is ridiculous. The state has $150 billion in unfunded liabilities…puts perspective on the $320 billion in Calpers investments. Like having a house worth $500,000 with mortgage of $750,000. Pay your cell phone bill and your credit score goes up. Hey, we picked up a five pound block of cheese, 300 tortillas, at the food handout at the local library. Saturday is movie night with tacos this weekend. PARTY TIME. Thanks Governor, thank you Mr President. Just parked the Infiniti in the garage. $175000 a year salary and free food. God Bless Amerika.

    Reply this comment
    • LetitCollapse
      LetitCollapse 6 November, 2014, 22:07

      I’m telling you, desmond. The ruling class gets whatever it wants. Time after time the oligarchs sucker the peasants into voting for their crap. It’s incredibly easy to sucker a peasant. You cause a crisis, then you steal the peasant’s money to fix it, then you tell the peasant you saved him from from armageddon and ask for his vote!!! AND HE GIVES IT TO YA!!! HAH! 😀
      They’re all as dumb as a bag of rocks, desmond. America is simultaneously the most educated and the most stupid nation on the planet. It’s going to be incredibly interesting to watch what happens in a nation with over 300 million guns outstanding when the house of cards finally comes tumbling down and the populus figures out that they’ve been snookered. God help us!

      Reply this comment
    • SeeSaw
      SeeSaw 7 November, 2014, 12:09

      Your post is what is ridiculous! Try debating facts sometime.

      Reply this comment
  5. Ulysses Uhaul
    Ulysses Uhaul 7 November, 2014, 08:46

    The peasants are happy. Go to any construction, swap meet or tony farmer’s market…..they are smiling, happy and happy.

    It is called the adaptive majority. A powerful voting block to be sure.

    The house of cards is a myth. Self preservation, greed rule in the underground economy. It’s self funded entrepreneurism and adaptive brawn, for technology, lack of education, cultural/language impediments are barriers to the peasant’s traditional main stream success.

    The key to supporting future cash flows to service basic government and welfare support is cap and trade ala easy to collect energy taxes paid by the adaptive majority ….and the usual main stream producers.

    In olden days the monarchy would not tolerate alternate economies. In Modern California the ruling class buys their votes and wink winks at catacomb endeavors.

    You should marvel at this evolving economic model. Two economies serving both the haves and the have nots with a wink wink benevolent government with a thumb on the social justice scales to guide whatever!

    Reply this comment
    • LetitCollapse
      LetitCollapse 7 November, 2014, 09:40

      California is a ‘boom and bust’ state due to fiscal mismanagement in SacTown. Personal income (which includes capital gains) in Califoria account for 54% of revenue receipts. Underground economies sharply cut into that revenue. If you believe that the ‘house of cards’ is a myth, just wait until our bubble economy bursts again – when the overwhelming national debt either dislocates the bond markets, the interest rate involuntarily rise to 6% or more (normalization), the sustained printing of fiat currency destroys the dollar or the US dollar is dethroned as the global reserve currency. Then you’ll see the ‘house of cards’ that I referred to. If you don’t think it’s real – you’re in for a BIG BIG surprise. The economic scams that you see happening both in Sactown and DC are totally unsustainable. We have reached the point of no return. When we fall, we’re going to fall FAST and HARD!
      You remind me of those neophyte market watchers back in the late 90’s who were telling me that we live in a ‘new economy’ where stock market indices and housing prices keep going higher and higher and higher with no downside. HAH! History repeats itself. Here we are again. HAH! 😀

      Reply this comment
  6. SeeSaw
    SeeSaw 7 November, 2014, 18:42

    We are not going to tolerate violence in this country, LIC. So, with the negative attitude that you go around with 24 hrs./day, what is your planned, solution?

    Reply this comment
  7. S Moderation Douglas
    S Moderation Douglas 8 November, 2014, 14:47

    You might learn Ayn Rand was a wacko. A misogynist wacko.

    She would be right at home on CWD.

    Reply this comment
  8. desmond
    desmond 9 November, 2014, 06:37

    Let us hear Seesaw’s thoughts on fiat currency.

    Reply this comment
    • LetitCollapse
      LetitCollapse 9 November, 2014, 09:45

      Seesaw must think that since she collects a gov pension that she will be immune to any future economic disruption(s). That the gov will exclude her from the downfalls of any such event(s). heh. It’s as if they believe that they belong to a teflon class of citizens, desmond. I hope I live long enough to witness the ship sink. Just to see the looks on their faces! Priceless! 🙂

      Reply this comment
    • Skippingdog
      Skippingdog 9 November, 2014, 14:47

      When you grow up, you’ll look back on your Ayn Rand fetish with embarrassment.

      Reply this comment
      • Ted E Mind of your Godhead Ted
        Ted E Mind of your Godhead Ted 9 November, 2014, 15:30

        It’s true Skip—- I ALWAYS can spot the pseudo wanna be intellects with the Ayn allusions !

        Most have NO idea about her highly oddball life and very strange personal habits!

        Reply this comment
    • Skippingdog
      Skippingdog 9 November, 2014, 14:48

      There’s not enough gold in the world for anything but fiat currency in our modern economy.

      Reply this comment
  9. LetitCollapse
    LetitCollapse 9 November, 2014, 23:27

    I’m going to apply for my EBT card before the system crashes! I want some for me too!!! HAH! I love free food!!! And free medical care!!! HAH! Especially when you pension hogs will get stiffed for the bill!!! HAH! You liberal swine are the ones who created the welfare state! No stigma attached!! Good. Gimmee some freebies too!!! 😀

    Reply this comment
  10. Desmond
    Desmond 10 November, 2014, 05:20

    When I got the free cheese and tortillas, there was a poster noting free flu shots. I am canceling my doctor’s appointment to stand in line. They supposedly pass out coupons for a free gallon of ice cream at any store, when you get the shot. Also, you can call a number to have someone pick you up for the shot, and take you back.

    Reply this comment
    • LetitCollapse
      LetitCollapse 10 November, 2014, 13:38

      I spend half my day looking for freebies, Desmond! I’m currently looking for a place to get a free take-out turkey dinner for Thanksgiving. I’m telling you….if you can’t beat ’em, join ’em!!! Be a good American and follow the incentives!!! Git some before it all runs out!!! 😀

      Reply this comment
    • LetitCollapse
      LetitCollapse 10 November, 2014, 19:14

      Oh, btw, I’m a vet so I already got a free meal lined up for tomorrow!!!!

      GO GALT!!! 😀

      Reply this comment

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