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alstry (36.32)

The California Cancer

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January 16, 2009 – Comments (7)

California can't afford to pay it citizens the tax dollars it owes them.

Many of California's citizens can't or aren't paying the taxes they used to pay.

California's expenses keep rising creating an ever growing deficit.

If California doesn't pay, its citizens can't spend that money further exacerbating the slowdown.

Do the citizens who are being stiffed have the right to withhold paying taxes until they square with the state???  Seems reasonable.  If you owe me ten dollars and I owe you twenty....I simply pay you ten and we are even.  However, then California's revenues for next year will decline by the equivelent amount that it owes making the problem EVEN WORSE!!!!!

Government printing in this situation solves nothing because its effect would be the equivelent of splitting an apple in two and saying which would you rather have, a whole or two halves?

The problem is not the quantity of money in circulation...it is a solvency issue....very very different then The Great Depression(a liquidity crisis where printing would have solved the problem) and something MOST of the Motley Fool bloggers fail to recognize.

It should not surprise you that so many are missing this since many of the commentators are english or economics majors and very few have actually owned their own businesses.

At this point, much of the country is broke or on the brink of bankruptcy.  Whether you print any more money makes little difference.  If you have twice as much money and the prices of goods are twice as much, you are still broke.

At this point, the question is what demands will government make on its citizens to resolve this issue?  We as Patriotic Americans may be asked to hand over our retirement accounts for the good of the nation or to protect our national secuity.  The more you have, the more you will likely be asked to give........it could be a lot because our national security may depend on it.

When you have Pancreatic Cancer...you will do or try just about anything.  Welcome to the world of California Cancer....and if you don't live in California......don't cheer too loudly...it is spreading rapidly around the nation.

Reminds me a bit of the black cow telling the white cow "I am glad you are in front of me" as they are both in line for slaughter.

 

7 Comments – Post Your Own

#1) On January 16, 2009 at 10:40 PM, boiler1117 (< 20) wrote:

"At this point, the question is what demands will government make on its citizens to resolve this issue?  We as Patriotic Americans may be asked to hand over our retirement accounts for the good of the nation or to protect our national secuity.  The more you have, the more you will likely be asked to give........it could be a lot because our national security may depend on it."

 Is that a serious comment or a joke?   If it is a serious comment, quit wasting everybodies time.

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#2) On January 16, 2009 at 11:58 PM, SuperPicks (29.13) wrote:

boiler1117

what were you, as a patriotic american, asked to do with your bank accounts? (patriot act)

what were you, as a patriotic american, asked to do with your time & possession at the airport? (homeland security)

what were you, as a patriotic american, asked to do with your support of peace? (gulf war, kosovo bombings, iraq war, war on terrorism, afghan war)

what were you, as a patriotic american, asked to do with your US dollar? (as it was devaluated by the central bank against hard assets over decades, effectively skyrocketing the price of autos, homes, groceries)

what were you, as a patriotic american, asked to do when your government couldn't pay you back your own money? (2009 taxe dollars)

will you not, as a patriotic american, accept a national ID card for ease of tracking/identification for federal authorities in the next year or so?

will YOU, as a patriotic american, quit wasting everybody's time?

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#3) On January 17, 2009 at 12:01 AM, jesusfreakinco (29.02) wrote:

Paulson, Bair Raise ‘Aggregator Bank’ for Toxic Debt

http://www.bloomberg.com/apps/news?pid=20601087&sid=aCcNKVDnUKMA&refer=worldwide

Al,

You bring up all the right arguments, but fail to draw the right conclusions.  We are faced with a solvency crisis - across the board and evenutally our debtors will say no more.  This will inevitable end in a run on the dollar or significant devaluation of the dollar.  Fool the Chinese one shame on us,  Fool them twice...  it ain't gonna happen.

I know if sounds strange that gold would resort to being a currency again, but it will.  Gold WAS a currency up until the early 70s and was for thousands of years prior to that.  Will it be traded for goods/services... unlikely.  However, it will be re-asserted in the Bretton-Woods fashion.  Our governments fiat money system HAS SHOWN that a currency with ties to something tangible can't last.

You are going to get slaughtered in CAPS and real life if you don't begin to understand this.

Who's looking out for you???

JFinCO

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#4) On January 17, 2009 at 12:10 AM, Option1307 (30.12) wrote:

At this point, the question is what demands will government make on its citizens to resolve this issue? 

As far out there as this sounds, and yes maybe Alstry is stretching this a bit, but there is a very real possibility that the government will demand/confiscate our posessions/goods/money/gold/etc for the "good of the country". I think SuperPicks makes a very valid point. Our government has in the past enacted many, until then, previously seeminly impossible laws and demnads that have directly violated our freedom as American citizens. In times like these, we are most willing to give up anything and everything to the governemnt in order to "save our country". I'm not saying we should all run away in fear, but we just can't be naive to think that "this could never happen to us".

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#5) On January 17, 2009 at 12:46 AM, nuf2bdangrus (< 20) wrote:

45 more states to cry "trouble"....of course, they love to legislate benefits to illegals etc.  Now the bill is due

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#6) On January 17, 2009 at 8:31 AM, alstry (36.32) wrote:

Becareful about using past behavior to justify current actions.  What works for a while may no longer be possible.  Sometimes you just can't engage in the same behvior any more because the funds or source of funds run out.  Just look at Madoff.

First, the money must come from somewhere.  Simply printing money out of thin air accomplishes nothing.  It either divides the whole apple in two pieces or creates additional debt obligations that are CURRENTLY too burdensome.

Whether you guys like it or not, the Ponzi scheme has run its course.  Madoff worked for about 30 years....why not California's turn???

Is a state continually borrowing up to pay its citizens really that much different than a manager bringing in more and more money to pay off earlier investors??

What most refuse to accept is much of government spending over the past few decades was just that....a ponzi scheme.  It's now unraveling and politicans and bankers are squirming.

Once you run CA's deficit against the population capable of paying....you begin to understand that the CA problem is too big to resolve without massive structural changes.

For the past year on CAPS, I have been warning you this day was coming. 

If the government hyperinflates....the WHOLE country goes hungry assuring mass riots among the population(costs rise much faster than wages can keep up).  If we restructure through a deflationary depression, it will be painful for many but at least the few savers will be able to suppport the rest of the population.

It is now clear we are in the unraveling process.  The process is just beginning regardless of what you are being told.  For a few years now, the pundits have told you we are at the bottom....we A'INT even close.

You can apply Alstrynomics or believe the pundits....who has been more accurate???

California has been diagnosed with financial cancer and it is shutting down its systems....very very soon it will spread to other states.

Just like a person goes through a redical experience when being administred chemo.....America must go through a similar experience.  Let's hope we get the right medication.

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#7) On January 18, 2009 at 6:40 PM, eoinoc (< 20) wrote:

It is interesting, California can't pay and it won't accept any payments!

RE: Property tax, Orange County Treasurer Tax Collector in California does not have capabilities (according to correspondence) of posting partial payments--they can only post exact figure amounts, no exceptions. If tax payers are unable to make full payment then the tax payer and the Treasurer Tax Collector arrange what they call a split compatability type payment, but it can only take place in July 2009. This means that any property tax payment that was not paid in full for 2008, splits in half only in July 2009, but the actual full installment payment for 2008 will have to incur the penalty of 10% which will be applied, as well as a $23 penalty for not paying this on time, AND a 1 1/2 interest penalty per month--it begins in 2009. It just seems that being in the state of affairs California is in at this moment, they should be negotiating any and all payment instruments that are submitted to them -- this is just a thought.

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