February 16, 2009
Twenty-thousand layoff notices will go out on Tuesday morning
Such was the word from the Governor’s spokesperson as the California state legislature and governor try to close a massive budget deficit in the state. In addition to these potential cuts, the state has halted public works projects and has began furloughing state employees.
Kansas incidentally today announced that it won’t have enough funds to issue tax refunds. I suspect that we will see something very similar in the State of California unless something is done quickly to resolve the crisis. If cuts need to be made, then the legislators need to make them.
Everybody is concerned about a deflationary and recessionary spiral the United States economy will fall into. There are economists on every side of the issue. My personal belief is that the government needs to take measures to restore faith and trust in the system. Budgets need to be balanced and companies need to go bankrupt all the while government takes steps to ensure capital is flowing in a meaningful and responsible way. The sooner we can hit the reset button the sooner we will come out of this – bandaid economics will only prolong the economic misery for everyone and continue to present significant risks to real estate owners and investors.
- S&P Cuts California Bond Ratings
- Far From Being Out of The Woods
- Paul Krugman on California and Proposition 13
- Forced Withholding on Contractors Defeated….So Far
- Dimon: California Larger Risk Than Greece