Crisis: California can't raise credit. Needs $7b emergency Federal loan

[denem]

From the UK Telegraph:

Arnold Schwarzenegger: California needs $7 billion loan to fend off credit crisis

In a letter sent on Thursday to Henry Paulson, the US Treasury Secretary, Mr Schwarzenegger, California's governor, made clear that his state was running out of money because its usual borrowing channels had suddenly closed.

He made clear there would be grave consequences for the ability of American states to keep providing basic services if the $700 billion Wall Street bailout plan is not passed by the US House of Representatives.

That even America's richest and most populous state should face such severe financial problems illustrates the extent to which credit markets have seized up in the two weeks since the failure of the investment bank Lehman Brothers.

The US government has not been called on to make such a large emergency loan since New York City borrowed $2.3 billion – equivalent to $9.4 billion today – to stave off bankruptcy in 1975.

http://www.telegraph.co.uk/news/newstopics/celebritynews/3130508/Arnold-Schwarzenegger-California-needs-7-billion-loan-to-fend-off-credit-crisis.html

Um .. while the report may it a bit dramatic - Arnold was lobbying for the bailout to pass, and it comes against the background the state budget battle, it does underlie that the problem is the CREDIT CRISIS - money not stocks. Bailout or no bailout, the Fed has been pushing massive amounts of money into the system, with little to show for it.

[nini]

1. We reallllllly need to revisit Prop 13

It's killing us.

[DJ13]

5. No way

Prop 13 is the ONLY THING keeping elderly people in their homes.

Only those who own their homes long term benefit from Prop 13.

Its reset to present values whenever a house is sold.

[Cleita]

6. But property taxes in California are only 1% while in other states

the percentage is higher. I think people, who own multiple properties should pay higher taxes on extra homes, especially if they are from out of state like the McCains.

http://www.retirementliving.com/RLpropertytaxrate.html

In a state like California where property values are higher, it would be a big source of revenue. I would still leave the single family home at 1%, but honestly the filthy rich aren't paying their fair share because they use more resources than the average working family.

[nini]

10. Yes way..

I didn't say old folks who have been in their homes for 40 years have to be thrown out on the street.

It needs to be revamped for those who inherited homes and keep the same tax rate their parents had.

It needs to be revamped to not give the credit to corporations - that alone would help solve the crisis we have.

[David Dunham]

2. Did Arnold ever hear of the need for budget cuts?

[denem]

4. Hoover did - cut the budget as hard as he could.

[Cleita]

9. Of course he has.

He's been trying to budget cut everything and all it's gotten him is deeper in shit. There are plenty of places he can implement taxation but that would mean taxing his rich friends and the fat corporations who support him. He would rather save his political ass than his state.

[Unsane]

3. Why don't we just go totally socialist?

I mean, what's the argument anymore?

[Cleita]

Back before Reagan became governor, California had the best

social services and free education for everyone. Not anymore.

[flamingdem]

7. Tuhrmenate them Ahnold!

Relentless like Terminator 1 please.

[jazzjunkysue]

8. I got an offer for $50K credit line today.

It went into the trash with all the rest....