{"id":53444,"date":"2020-05-24T12:42:18","date_gmt":"2020-05-24T17:42:18","guid":{"rendered":"https:\/\/olduvai.ca\/?p=53444"},"modified":"2020-05-24T12:42:25","modified_gmt":"2020-05-24T17:42:25","slug":"california-just-put-washington-in-this-economic-catch-22","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=53444","title":{"rendered":"California Just Put Washington in this Economic \u201cCatch-22\u201d"},"content":{"rendered":"\n

California Just Put Washington in this Economic \u201cCatch-22\u201d<\/a><\/h3>\n\n\n\n
\"California
Photo by\u00a0Flickr.com\u00a0<\/a>|\u00a0CC BY<\/a>\u00a0| Photoshopped<\/figcaption><\/figure>\n\n\n\n

Government bailouts are being revived, and this time, unlike during the 2008 recession, it appears large financial companies won\u2019t be the only ones asking for help.<\/p>\n\n\n\n

The problem is, the government may not be able to help this time.<\/p>\n\n\n\n

In response to a bloated state budget and a massive debt<\/a> of over $550 billion<\/strong>, Newsmax reports<\/a> that California Governor Gavin Newsom is looking for a bailout from the federal government:<\/p>\n\n\n\n

Without an infusion of at least $14 billion from Congress, Newsom said the state would have to cut billions to public schools, not to mention hundreds of millions for preschool, child care and higher education programs. It\u2019ll also need to eat into health benefits for the poor, among other things.<\/p><\/blockquote>\n\n\n\n

\u201cThe enormity of the task at hand cannot just be borne by a state,\u201d Newsom said. \u201cThe federal government has a moral and ethical and economic obligation to help support the states.\u201d<\/p>\n\n\n\n

Obviously, Newsom\u2019s decision to impose lockdowns in response to the coronavirus pandemic, resulting in more<\/a> than 746,000 unemployed, partly explains the sudden need for cash.<\/p>\n\n\n\n

Economist Robert Wenzel thinks<\/a> the \u201clockdown is projected to lead to a state budget shortfall this year<\/strong> of $54 billion,\u201d which is bound to make things more complicated.<\/p>\n\n\n\n

Wenzel added another sharp critique of Newsom\u2019s request for a bailout, and a comparison to Greece\u2019s economic bust<\/a> in 2007:<\/p>\n\n\n\n

[Newsom] is now in begging mode just like Greece was, but, whereas a lot of Greece\u2019s financial trouble was about paying off old debt, California\u2019s problem is about running the current state government (and also local governments).<\/p><\/blockquote>\n\n\n\n

It sure seems like California has been playing a dangerous debt game, first ignoring economic realities prior to the pandemic, and then asking the federal government to send bags of cash so things can keep running smoothly.<\/p>\n\n\n\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

California Just Put Washington in this Economic \u201cCatch-22\u201d Government bailouts are being revived, and this time, unlike during the 2008 recession, it appears large financial companies won\u2019t be the only ones asking for help. The problem is, the government may not be able to help this time. In response to a bloated state budget and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1361,18769,195,379,29815,2144,1796],"class_list":["post-53444","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bankruptcy","tag-birch-gold-group","tag-debt","tag-government","tag-government-bailiouts","tag-lockdown","tag-us-congress"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53444","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=53444"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53444\/revisions"}],"predecessor-version":[{"id":53445,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53444\/revisions\/53445"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=53444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=53444"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=53444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}