Smart money from thin air.

At it again, this time suggesting California borrow from itself.

Looking at California’s budget figures, projected state revenues for 2009 are $128 billion. At a reserve requirement of 10%, if California deposited all $128 billion in its own state-owned bank, it could issue $1.28 trillion in loans, far more than it would need to cover its $23 billion budget shortfall. To lend itself the money to cover the shortfall, it would need only $2.3 billion in deposits and about $2 billion in capital (assuming an 8% capital requirement).

This seems like a great howling chasm in the US finance system and the skunks have used it well, driving our spending out to where money is expensive while they get subsidized.

A local editorial just relayed somebody’s opinion that Cali’s frozen property tax assessments helped fuel the world bubble by further holding down the cost of speculation in a very big market. Hadn’t seen that before.

It doesn’t matter. The pocketbook economists won’t let California “evade” our “responsibilities.” Things will have to get pretty bad before the DC Dems risk their legigenda “bailing out spendthrift states.” Nobody can tell the difference between a standard downturn revenue shortfall and the bankers’ original unchecked gambles? The people refusing to lend to states are withholding public bailout money? Fuck if anyone can understand it. The “balanced budgets” script is a simple story for difficult times.

Remember in the Great Depression — this one’s not even “fair” — when people tightened their belts and slogged through, toughly, yeah that’s how we beat the negative attitude set. Patience in adversity. The sheer guts for all to see in the portraits of those old internal refugees. They had what it took to live with less and get us back to balanced budgets. No faggy coffee drinks for them.

Of course that was when we all lived next door to Laura Ingalls Wilder on the prairie and broke our backs for a potato. That was when the big cats came at dawn and ate our babies cuz we couldn’t light the fires in time. We stuck together, alone, accepted the worst and worked to the bone in whatever dirt we didn’t eat, to build… something… oh my gosh I have forgot what we built to prevent the… Well surely if it were important I’d remember. I mean if it were possible to stop this, God wouldn’t have told the banks to punish showy gay people for too much shopping.

Anyway, tighten your belt, that’s what all the economists say. Nothing is worse for a tired economy than getting paid and spending money. Keep the homefires burning! or tune your television to the Woodstove Channel, it’s the same.