DON'T BAILOUT CALIFORNIA! "Just as government guaranteed mortgages lead the market to make overly risky home loans, federally guaranteed state obligations will set the stage for yet another crisis."
"Federal backing of California bonds would effectively turn them into Treasury bonds, with the added appeal of being exempt from California state income tax. Therefore, the Treasury will be at a competitive disadvantage when it looks to issue its own debt to
Californians. If it then has to guarantee the bonds of all the other 50 states, why would any Americans buy Treasuries when they can get identical credit quality on better terms from the states? The only real buyers left would be foreigners, who are already queasy about the Treasuries they own."-Peter Schiff of europac.net
Read entire article here
Peter Schiff is right. California got themselves into this mess, let them get themselves out. I thought it rather ironic that Arnold's plane almost crashed. Ya think God's trying to tell him something?
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