Raking the Social Latrines for Alms for California. Another NYT Scheme for Indebtedness.

Abstract: The New York Times has identified some ‘academic’ with a new plan to save California from bankruptcy at NO COST to the federal government or California taxpayers. The state could borrow money from the Treasury as an ‘advance’ on current federal matching funds and spend that to hasten the “recovery.”  This would cost the Treasury nothing except some minor administrative costs. This would transpire with no risk of default and the money would be paid back with interest. Again, we must read more of the debunked Keynesian stimulation policies that currently are crashing much of Europe in debt and inevitable default. Any prattle we can conjure is appropriate for California to beg for alms.

We can estimate the level of panic and angst for ants, dogs and panhandlers by their frenzied physical antics, some persistent foam at a key orifice or two and other attributes such as screaming. Frequent bouts of whooping signal us that something important is to be set up on the pergola as the new idea. Those who have fallen in esteem by some now-outdated moral standards in our society are habitually idolized and held up as heroes in the pages of the New York Times. Any person who is a criminal, a debtor, pervert, drug addict or Islamo-Fascist or is even in bankruptcy is a likely candidate for a brief but starry op-ed piece hastily primed with the recurring notion that our ‘system’ (read the Republicans or capitalism) is  responsible for their sorry plight.  We routinely witness this narrow ragzine mentality in  a variety of writers[1][2][3][4][5][6][7][8] and staff[9] that may appear to have spent some time thinking and analyzing the news and have arrived at a fresh and objective opinion after ‘reviewing the facts.’  There is fame and fortune in this reporting and commentary business if they can rise above the rubble of yellow journalism and launch some New Leftist concepts or perhaps discover some hidden secrets behind some tragic event and unleash them upon the public in a brilliant op-ed replete with noisy flourish and kazoo fanfares.  Many must thrash about in a contest of ideological rivalry to see if any are noble enough to match the elegant essays of their honored Pulitzer Prize winner Walter Duranty,[10] but most fail. When things run a bit stale the NYT trolls the academic scene for new ideas. Today, we are treated to a wonderful new idea that ‘solves’ the California[11][12][13] debt/spending problem with no cost to the federal government. And we thought we ran out of miracles in finance!

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Wonderfulness now begins:

“HERE in California, where people tiresomely boast that the state’s gross domestic product exceeds that of all but seven nations, I keep expecting a ballot initiative demanding admission to the Group of 8 industrialized nations. I’d consider voting for it, too; then maybe Washington would work as hard to synchronize its economic policy with Sacramento as it does with Tokyo and Bonn. The lack of coordination within the United States — and, equally important, the failure to recognize the states as macroeconomic players — helps explain our sluggish recovery.”[14]-- Let Treasury Rescue the States By Christopher Edley Jr. Op-Ed Contributor Published: July 7, 2010 [Emphasis is mine in all quotes.]

I think some of us recall that California has 11% of the population and a booming drug and prostitution business and that this sums a bit higher than the GDP of Luxemburg. Greece is a “macroeconomic player” too and so is Spain, both to soon crash in a whirlwind of debt and defaults from foolish spending. We are somehow left hanging for the linkage between recognition and sluggishness, but we need to read on. The first part of this piece is just pulp that is apparently written to grease the skids of the lower reaches of our society at least in financial and moral terms. Big must be beautiful we learn here—not goodness just bigness.

This next sentence is a stunning example of illogic, pandering and obfuscation.

“To make matters worse, several states have country-sized G.D.P.’s, but none has the macroeconomic tools of an independent country. Every state except Vermont has some sort of balanced budget requirement that prevents it from weathering a recession by running up big deficits to keep teachers employed, students in college, welfare payments flowing and construction humming. Nor can New York and California stimulate their economies by, say, printing more currency. Instead, states are managing huge budget crises with the only tools they have, cutting spending and raising taxes — both of which undermine the federal stimulus.”--Let Treasury Rescue the States By Christopher Edley Jr.

We should have to read not much further to recognize this was written in Berkeley, Calif. Or Bezerkely as David Horowitz calls it. The idea of a balanced budget is trashed here. Here, in the best traditions of propaganda, we find embedded in this paragraph the Keynesian Nostrum that massive government spending can usher a sorry state over a terminal financial hurdle. The central issue in this piece is that states cannot, as yet, print their own money and that they might have to cut spending and furlough some of their socialist workers. He omits the salient fact that raising taxes in California is not an option as it takes some 2/3 majority by the elected officials in Sacramento to hike taxes and the governor’s signature. He omits the other fact that certain debt is prohibited or was. This is how Spain and Greece came to peer over the yawning crevasse that they will soon careen over into financial oblivion. Stay tuned, this gets funnier as it progresses in word count.

The New Idea~!!

“That’s why the best booster shot for this recovery and the next would be to allow states to borrow from the Treasury during recessions. We did this for Wall Street and Detroit, fending off disaster. It’s even more important for states.”--Let Treasury Rescue the States By Christopher Edley Jr.

Now, why didn’t we think of this sooner? How about a Nobel Prize in Economics for this inspiration? The money chucked into the Wall Street nooks and crannies was not necessary and we should have let these businesses crash but the event served as a point of inspiration to those who can do little but beg for alms or write fanciful financial pieces for the NYT.[15] California’s budget is out of control and their debt is massive and there is no mention of the 500 bln needed to ‘fund’ the California retirement monster.  If they spend more they will recover we learn today.

A slip in time gains nine:

“Here’s how this would work. States already receive regular federal matching grants to help pay for Medicaid, welfare, highway construction programs and more. For instance, the federal government pays a share of state Medicaid costs, from 50 percent to more than 75 percent, depending on a state’s wealth. The matching rates were temporarily sweetened by last year’s stimulus.

But Congress should pass legislation that would allow a state to simply get an “advance” on these future federal dollars expected from entitlement programs. The advance could then be used for regional stimulus, to continue state services and to hasten our recovery.”--Let Treasury Rescue the States By Christopher Edley Jr.

Wimpy would always promise to pay you back for the loan of some urgent hamburger money on Tuesday. This is like offering a drunk some more Tokay so that he will be in better shape to drink some more or like providing a crack addict with a few extra vials so he or she can turn better tricks and earn more dope money. California already has a credit rating down in the lower reaches that match Zimbabwe and this author suggests that this can be paid back? At what interest rate? Oh, the current 1.5%??

The soundness of this measure is now showered upon us:

“The Treasury Department, which writes the checks to the states, could be assured of repayment (with interest) by simply cutting the federal matching rate by the needed amount over, say, five years. Of course, when Treasury eventually collected what it was owed, the state would have to cut spending or find new revenue sources. But that would happen after the recession, when both tasks would likely prove easier economically and politically.”--Let Treasury Rescue the States By Christopher Edley Jr.

We can just borrow from the future! Wow! We can just pour money from one bucket into another for a Zero Sum Game spectacular. S0, we just spend more and wait until the ‘recession is over’ and that might be 5 years. And, later the state would have to cut spending or find new revenue sources. How about a perpetual loan from Treasury so they can become even more prosperous? California will cut spending? Look at their record. New revenues sources? Their current idea is to legalize, nurture and sell marijuana and tax that at 30% as if the criminals who grow this stuff would be so kind as to report their sales to the state.  What happens if California defaults on these loans as they are certainly going to do with their other obligations?

The author[16] is a minority from Harvard who worked for Peanut Jimmy for a time.  His eternal theme has been ‘social justice,’ a euphemism for reversed racism, contempt for capitalism and wealth redistribution mandates for minorities. This nonsense is exactly what tokens were taught when they were admitted to universities with low SAT scores and given cookie courses to keep their grades above the D level. He must assume that a move from Harvard to Bezerkeley is some form of up. The implicit theme here is to grab money in any way shape or form from anywhere and simply give it to blacks and others who cannot cope with our society. I wonder why his scheme didn’t include a reparations legacy in proportion to the number of black citizens in California. That would rate some praise and more votes.

And, all this at NO COST!!

“What would this cost the federal government? Nothing. There would be zero risk of default, and a guarantee of full repayment plus interest equal to what Treasury pays in the bond markets to borrow. Congress would need only to appropriate the administrative costs of this program, which would be minimal.”--Let Treasury Rescue the States By Christopher Edley Jr.

“Indeed, our best shot at devising United States economic policy may be to give the states the role of creating and carrying out the economic stimulus we so desperately need.”--Let Treasury Rescue the States By Christopher Edley, Jr.

This essay is a bit more than pathetic. It sounds like some Hurdy-gurdy grinder’s tune that attracts benevolent givers to plunk a few shekels into the tin cup to feel oh so good.  California is in a terminal swoon and probably cannot recover so the idea is to hike up the debt. It seems that our liberal soothsayer depends on the idea that printed money from the Treasury is somehow ‘free’ and that there is no limit to how much paper they can print before Fitch or Moody’s downgrades our AAA credit rating to junk. The IMF warned the US this very day to cut spending.[17]

And we once thought Harvard actually trained their students in finance, logic or thinking. This essay refutes that sorry notion. Let us train some more minorities in the legal arena and hope we can produce one with more competence than this specimen.

rycK [a 5^th generation Californian in exile]

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