California Default Watch IIMarch 8 (Bloomberg) -- California Treasurer Bill Lockyer’s bid to sell $2 billion of bonds this week, his first issue since November, may benefit from a falling risk premium after lawmakers at his urging passed a bill to prevent the most- populous U.S. state from running out of cash.
A special session of the Legislature approved measures to chip away at a $20 billion budget deficit and give state officials powers to put off as much as $5 billion in spending. The delays are intended to sidestep cash shortfalls like those last year that forced the state to issue IOUs to pay bills and triggered cuts to its credit rating.
And an excellent blogger I haven't mentioned in a long time, Of Two Minds:
Why California Is Doomed (March 9, 2010)
California is doomed for two simple but profound reasons: the cost structure is too high for most businesses to survive, and a boom-dependent economy.
The dysfunctions crippling California would easily fill a volume: a dysfunctional Legislature that has been gerrymandered to protect virtually every seat; a dysfunctional proposition system which enables special interests to craft Protected Fiefdoms via the ballot box; recalcitrant public unions who don't see anything wrong with public servants getting 90% of top-pay in pensions while still earning big bucks as "contract employees," an enormous population of undocumented workers who pay only sales taxes, and whose employers pay no payroll taxes, either-- and that just scratches the surface.