The Glade 4.0

No doubt about it... props Snoop & Dre' Is going to go bankrupt this year. If it does not, it will be because it recieved funds from the Federal government. If it does not go bankrupt this year, it will next year, regardless.

What do you think will be the fall-out when it does happen, and what are your thoughts on the use of federal funds to prevent it?

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Ezekiel 23:19-20 

Its an interesting question. Hopefully the economy turns around to slow down the pace, but the State of California as it has been cannot continue. My proposal, since the federal government keeps using California for an ATM, is to remove a star from the flag, end all federal programs, and become our own country.

At the very least, we should revert to territory status.

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The U. S. Constitution doesn't guarantee happiness, only the pursuit of it. You have to catch up with it yourself. B. Franklin

"A mind needs books like a sword needs a whetstone." -- Tyrion Lannister, A Game of Thrones

Only domestic terrorists and racists support secession.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Since I was born in CA., if it were to secede do you think they would offer me citizenship?

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Ezekiel 23:19-20 

I'd suggest the racists go to Southern California, more to be angry about. Domestic Terrorists are truly split on the issue. On the one hand, the opportunities for terror when starting a new country are immense, on the other, it means they have to get a passport.

Rynar, I'd sponsor you.

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The U. S. Constitution doesn't guarantee happiness, only the pursuit of it. You have to catch up with it yourself. B. Franklin

"A mind needs books like a sword needs a whetstone." -- Tyrion Lannister, A Game of Thrones

We're all in this together. Sorta what being a republic is all about.

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In time, this too shall pass.

It does bring up shared vs individual responsibilities. Why should the other 49 who are also in tight financial spots support a state that can not balance its budget? And please no mention of disaster those are separate issues. California's financial melt down is its own creation.

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"Life isn't divided into genres. It's a horrifying, romantic, tragic, comical, science-fiction cowboy detective novel. You know, with a bit of pornography if you're lucky."
— Alan Moore

Bankruptcy, depending on how it is structured, wouldn't be as bad as defaulting. What do you think the odds are that things will become that bad?

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Sadly I see repeated Federal bail outs in the future. California is too big an eletoral state to be left to its own mess. Soon other states will get the lesson and join it in fiscal insolvency.

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"Life isn't divided into genres. It's a horrifying, romantic, tragic, comical, science-fiction cowboy detective novel. You know, with a bit of pornography if you're lucky."
— Alan Moore

Too big to fail and I'm sure they know it. I dont think people will care enough to do more than complain about it and shake their heads.

Looking at my state, NJ, which isnt far behind CA in terms of broken, it could change the political climate enough to get some entrenched people out. I'm hearing Boxer is on thin ice for example.

Here we elected Christie, and he's gearing up to fight the unions on a number of fronts but we'll see if there is any meaningful changes.

So I guess my prediction is CA might change some politicians for some marginally better/different ones and muddle through until the next boom cycle.

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“Strong people are harder to kill than weak people, and more useful in general”. - Mark Rippetoe

If we were all in this together, state and federal employees wouldn't be subject to mandatory pay raises while unemployment and deficits are rising, state pension funds (point at Calpers directly, but take your pick) wouldn't have assinine stipulations about minimum fund amounts (basically, they are free to invest the money however they see fit, and if the fund loses money, the state is responsible to replace the money back to the point the fund never has less than the amount previously contributed... thank one of Obama's appointments for that one), etc, etc...

Well, if nothing else, California can serve as an example.

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In time, this too shall pass.

What's needed is a Constitutional ammendment prohibiting distribution of Federal money to a state for the purpose of avoiding bankruptcy.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

Why stop there? I'm thinking it would be a great idea to make it so state and national expenditures get limited to some percentage (10%?) of projected state/national GDP.

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In time, this too shall pass.

We should operate state and national expenditures like IBM handles payroll. Taxes collected in 2009 fund the 2010 budget.

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Makes sense to me Khross

We have one. It is called the 10th amendment.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

The Tenth Amendment was legally vacated by the Fourteenth under current juridical doctrine.

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The problem with that approach is that it's pro-cyclical. Even if you don't buy the idea of fiscal stimulus, the need for basic safety net expenditures will rise in an economic downturn, but tax revenues will fall. If government can't spend more than it took in during the previous year, that's going to make the downturn a lot more painful for people.

I guess that makes a good argument for not spending all of your money, every year, RD.

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

Sort of, but said approach requires fiscal responsibility on part of the governing structure. It's also highly unlikely to work with a fiat currency.

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Indeed. I'm all for rainy-day funds. I suppose I just don't have much faith in the fiscal discipline of our elected leaders absent a crisis!

Fiscal Responsibility?

From any of our elected officials?

You should write for NBC's Must See TV.

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Holy shitsnacks!

The government could learn a lot from General Electric and IBM when it comes to managing its resources. While there are other exceptionally large businesses that might provide some insight, IBM and GE weather economic crises far better than almost every small nation and pretty much every other business on the planet. At the moment, GE is getting hammered by some of subsidiaries in the general re-insurance industry, but it's otherwise stable and performing rather well despite current circumstances.

Both companies, back in the late 70s and early 80s, shifted to secured capital payrolls. This means they used the free capital generated in 1979 to set the payroll limits for 1980. That money was pushed into secured deposits and all raises, new hires, promotions, etc. were accounted for in those funds. Most importantly, from at least a public perception/shareholder position, it means that both companies are unlikely to cut payroll in any given year. It also means that any cuts in payroll are known before hand and handled appropriately.

Were the government to use a secured capital approach to its budget, we'd see a drop in social service and military spending, but increases (relative to budget amount) in sustainable growth infrastructure and mandatory services. We'd also see reasonable limitations of elected officials salaries and pension plans (Hence it's not in their personal interest).

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Heh I was lucky to pick up GE when it dipped to around 8 bucks (low of 6.66) when they were overly penalized for their financial dip.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville