70-90% of America Bankrupt!!!! or soon to be bankrupt???
SAN FRANCISCO (MarketWatch) -- California Treasurer Bill Lockyer asked U.S. Treasury Secretary Timothy Geithner on Wednesday to authorize assistance for his state from the federal Troubled Asset Relief Program, warning that depressed tax revenues may cut into basic services and halt the building of infrastructure.
In a letter, Lockyer asked Geithner for TARP assistance for California and "other financially strapped states and local governments which face a severe cash flow crunch."
"If we cannot obtain our usual short-term cash-flow borrowings, there could be devastating impacts on the ability of the State or other governments to provide essential services to their citizens," Lockyer wrote.
In particular, Lockyer cited fire and police protection, education and social services. No credit
In addition, Lockyer warned in the letter that California's cash flow problems may lead to trouble accessing the long-term bond market, which could "eventually even halt our infrastructure construction programs."
Lockyer estimated that California's cash flow shortfall in fiscal 2009-2010 will be more than $13 billion.
But weakness in the credit markets will cause difficulties in short-term borrowing to make up that difference, Lockyer wrote, necessitating the use of TARP money to help make funds more easily available through banks.
Under a plan outlined by Lockyer in his letter, if a government is unable to repay loans made using TARP funds, the Treasury would use TARP money to "purchase the non-performing assets."
Effectively...California is bankrupt. So are many of its counties and cities.......CA, alone, is responsible for approximately 14% of America's GDP. Many other states face similar problems to CA...same with additional cities and counties as tax revenues evaporate.
But it is not limited to states, or local governments...we are seeing it with our banks, auto companies, large and small businesses, and millions of citizens......and as this blog is written.....conditions are deteriorating rapidly as evidenced by exploding foreclosures and declining revenues.
The question at this point is what course will government take??....what demands will be made of citizens?? Who does government choose to bailout....who does government let economically extinguish??? Who gets money and who doesn't???
None of us really know right now....unless of course you are buddies with Mr. Geithner or Mr. Bernanke.....
But one thing the Institue of Alstrynomics can assure you.....if we continue down the current path......it will be most of us.
Prepare...Don't Fear....Things may get a lot worse!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!