California Downgraded but Help is on the Way!

California was downgraded by Fitch Ratings today. This will have two major impacts. The first is that it will be harder for California to borrow money. It’s a bad time to borrow and a rating downgrade will make it harder. This means California will have a harder time paying its bills. The second, assuming California can borrow, the interest rates will be higher. This extra interest rate increase means less spending on other items.

Our politicians need to negotiate and solve the budget problem once and for all! Enough politics, unemployment is spiking (9.3% now) and the housing market is still going down. The good news is that California may get around $21.5 billion from Obama’s stimulus bill. I guess our politicians should wait to see what comes out of the stimulus package before fixing California’s budget. That means we will have to wait a few more weeks for any sort of solution.


2 Responses to “California Downgraded but Help is on the Way!”

  1. 1 Michael Huddleston January 25, 2009 at 3:26 PM

    Shouldn’t the financial advisors have done something before we were over a million + dollars in debt? Why wait until now? I still don’t get “why” it is such a problem when the US is perfectly capable of compensating by printing more money if it really is that important.

    For as creative as I am- I think too literally about the value/concept of money. I mean it was our idea to switch from Gold (a sarce commodity) to greenbacks (a not so scarce commodity). I still don’t understand why something we manufacture and control should affect us in such a positive and sometimes devastingly negative way.

    I just don’t understand how the idea of “money” that isn’t really bound to the laws of natural science should effect us so completely. I hate to believe that my purpose here is to work everyday for something that really isn’t substantial/reliable if my government tells me that our state spent millions of dollars we didn’t have to begin with. (Sounds like our treasury is worse than a kid with a credit card)

  2. 2 Ivy Quilala January 29, 2009 at 8:46 AM

    THe stimulus package would be a big help and hopefully it allows California to get back on tract. I’m kind of sceptial about it though because California has lots of people out of work, funding for education that’s needed, and other programs that are in dire need of assistance. This is the generation where we are paying for the benefits paid out to Baby Boomers. People out of work are claiming unemployment benefits, and programs are getting their fundings cut to accomodate other events that have occured. So hopefully, this $21.5 billion dollars gets us back on tract. This money should be well monitored in ensure it is distributed efficiently and properly to where it needs it most. Billions of dollars seems alot, but looking at the whole picture it may not be enough.

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