California Meltdown

Back in June we started talking about the state of California possibly being a foreshadowing of what could soon be coming for the rest of the country.

Yesterday we posted about an article by a New York official sounding the alarm that the states will soon need to be bailed out by the Federal Government.

Now, just hours ago, Governor Schwarzenegger released California's budget....and it has "draconian" cuts in it....and they are saying that they will need to be bailed out by the Federal Government.

I wonder where the Federal Government will get the money? I wonder who will bail out the Federal Government when they are soon forced to make "draconian" cuts?

Tom Tarabicos of Wells Fargo Financial Advisors said the plan was another reason to steer clear of California's debt. "You look at it and wonder how the heck they can remain investment grade," he said.

"I just have a real strong feeling that there will be something bad happening," he added. California has the lowest rated general obligation debt of any state, and debt markets did not react to the plan, the opening salvo in a long debate.

We also have talked about the chaos that will start to ensue if the welfare checks start to bounce in Los Angeles and other big inner cities where a majority of inhabitants rely on getting money and programs from the state governments.

Failure to get federal funds would trigger $4.6 billion in additional cuts, including the outright elimination of the state's main welfare program, its in-home health services and inmate rehabilitation services not mandated by courts, according the budget plan.

Read this very sobering article here; http://www.reuters.com/article/idUSTRE6074TP20100109

This quote from the article is very haunting;
"I just have a real strong feeling that there will be something bad happening," he added

Please pray for this country.