California's debt 'nearly junk'

[ze_dscherman]

The California's state debt has been downgraded to two points above junk status by US credit ratings agency Standard & Poor's (S&P).
S&P slashed its rating on California's $27bn of debts as Republicans succeeded in forcing a vote on 7 October on whether Democrat governor Gray Davis should keep his job.

California, the richest state in the US, faces economic turmoil unless it can pass a state budget.

S&P managing director Steve Zimmerman said: "This recall election just makes it more difficult to focus on the job in hand."

All: http://news.bbc.co.uk/1/hi/business/3095011.stm

[TreasonousBastard]

1. Watch for more of this...

Orange County's bankruptcy should have been a warning. New York's credit rating has already been slammed, and a few other states are ready to go down the tubes.

2500 years ago, the point was made in Plato's "Republic" that a fundamental flaw in democracy is that politicians will instinctively pander for votes by giving away services but not raising taxes, resulting in the eventual collapse of the system.

This flaw is not necessarily limited to democracy, of course, as even kings and dictators have had similar budget problems, but it it is yet another evidence that the more things change, the more they stay the same.

[w13rd0]

2. Republican Scorched Earth Policy...

...slash services, bankrupt the governments, incite partisan rancor, divide communities, espouse hateful rhetoric and parrot propaganda. Repeat until everything is in ruins, and then you can buy it all up for a song...

[expatriot]

3. the good and the bad news....

the bad news is that davis may very well go down... and that if the government credit system goes to hell we will be in for years of hard times... the silver lining is.... bush will go too.