Schwarzenegger seeks $7 billion from Paulson due to credit crisis

[FourScore]

SACRAMENTO -- California Gov. Arnold Schwarzenegger, alarmed by the ongoing national financial crisis, warned Treasury Secretary Henry M. Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the federal government within weeks.

The warning comes as California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent.

The state of California is the biggest of several governments nationwide that are being locked out of the bond market by the global credit crunch. If the state is unable to access the cash, administration officials say, payments to schools and other government entities could quickly be suspended and state employees could be laid off.

Plans by several state and local governments to borrow in recent days have been upended by the credit freeze. New Mexico was forced to put off a $500-million bond sale, Massachusetts had to pull the plug halfway into a $400-million offering, and Maine is considering canceling road projects that were to be funded with bonds.

California finance experts say they know of no time in recent history when the state has sought an emergency loan of this magnitude from the federal government. The only other such rescue was in 1975, they said, when the federal government lent New York City money to avoid bankruptcy...

http://www.latimes.com/business/la-fi-calif3-2008oct03,0,5726760.story

[BridgeTheGap]

1. Can someone enlighten me here...why do we need to turn to these "too big to fail

corporations" for the purpose of providing credit.
Rather than bail these bastards out, why can't the government do it directly, on a case by case basis
- i.e. loan money directly to california.
For small businesses, use the SBA.
Why wouldn't this work?

[Elidor]

2. I, too, will be asking Secretary Paulson for money

I'm running out of cash to fund day-to-day expenses and am unable to raise enough money to remain solvent. Therefore, I will ask the Treasury to bail me out, to the tune of $10 million. Since the Treasury is merely a giant piggy-bank to be raided by fuckups and greedpigs, it's about time I got my share.

Btw, in case everyone has forgotten, Arnie let the energy companies slide on - what was the amount? $10 billion, I believe, right when he took office. If Californians want to know where the money went, ask Arnie, another failed GOP maladministration whose sole purpose is to transfer public funds to private companies.

[ContinentalOp]

3. Gee, how convenient.

First Mass, Now CA... yeah, that's not transparent at all. :mad:

[QueenOfCalifornia]

4. I want a loan

too - and plan, like the rest who are in line, to never pay it back....

Mr. Paulson, I need about 20 million - a drop in the bucket or so it seems.