California Is Broke
From the new report on the state's cash shortage by the non-partisan Legislative Analyst's Office:
"Without additional legislative measures to address the state’s fiscal difficulties or unprecedented amounts of borrowing from the short–term credit markets, the state will not be able to pay many of its bills on time for much of its 2009–10 fiscal year. Deterioration of the state’s economic and revenue picture (such as the $8 billion revenue shortfall we forecasted in March) or failure of measures in the May 19 special election would increase the state’s cash flow pressures substantially—potentially increasing the short–term borrowing requirement to well over $20 billion. California is likely to have difficulty borrowing anywhere close to the needed amounts from the short–term bond markets based on the state government’s own credit."
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