What if California defaults on its debt?

R

rickradian_IHB

New member
How will home prices be affected in Irvine, OC, any city in the state? Will California living loose its luster (as if it has not lost it already)?
 
more importantly what will happen to my Vanguard CA LONG-TERM TAX-EXEMPT bond fund? should have gotten rid of it a few weeks ago
 
[quote author="rick_r" date=1244774260]How will home prices be affected in Irvine, OC, any city in the state? Will California living loose its luster (as if it has not lost it already)?</blockquote>


Prices might fall long term as crime increases due to cops being fired, schools get worse due to teachers being fired, roads get worse due to no money to repair them, etc.



But we showed them! We caused all the propositions to fail! Yeah us!



You get what you pay for. If you aren't willing to pay for it, you get what you deserve.
 
[quote author="Geotpf" date=1244781043][quote author="rick_r" date=1244774260]How will home prices be affected in Irvine, OC, any city in the state? Will California living loose its luster (as if it has not lost it already)?</blockquote>


Prices might fall long term as crime increases due to cops being fired, schools get worse due to teachers being fired, roads get worse due to no money to repair them, etc.



But we showed them! We caused all the propositions to fail! Yeah us!



You get what you pay for. If you aren't willing to pay for it, you get what you deserve.</blockquote>


The taxpayers voted 'no' bacause they realized that California could no longer run on borrowed money. We pay some of the highest taxes in the country and we have finally had enough. I voted 'no' and I am one of the people who could very well be laid off or furloughed. I view this decision as 'tough love'. There is so much waste in state government - I see it on a daily basis. So many processes and procedures are left "status-quo" because hey, they've worked in the past - why rock the boat? The state will be forced to make some tough decisions and they will have to reorganize and restructure many things. Many programs (that never should have been implemented in the first place) will shut down. Yes, people will be laid off. However, once things shake out, I believe California will be a better place.
 
[quote author="SoOCOwner" date=1244783163][quote author="Geotpf" date=1244781043][quote author="rick_r" date=1244774260]How will home prices be affected in Irvine, OC, any city in the state? Will California living loose its luster (as if it has not lost it already)?</blockquote>


Prices might fall long term as crime increases due to cops being fired, schools get worse due to teachers being fired, roads get worse due to no money to repair them, etc.



But we showed them! We caused all the propositions to fail! Yeah us!



You get what you pay for. If you aren't willing to pay for it, you get what you deserve.</blockquote>


The taxpayers voted 'no' bacause they realized that California could no longer run on borrowed money. We pay some of the highest taxes in the country and we have finally had enough. I voted 'no' and I am one of the people who could very well be laid off or furloughed. I view this decision as 'tough love'. There is so much waste in state government - I see it on a daily basis. So many processes and procedures are left "status-quo" because hey, they've worked in the past - why rock the boat? The state will be forced to make some tough decisions and they will have to reorganize and restructure many things. Many programs (that never should have been implemented in the first place) will shut down. Yes, people will be laid off. However, once things shake out, I believe California will be a better place.</blockquote>


There could be arguments on 1A, 1B, and 1C.



But voting no on 1D and 1E was just dumb. 1D and 1E removed restrictions on the use of certain taxes to certain programs and allowed the money to go to the general fund. Voting no on 1D and 1E meant the state has to continue to take that tax money and use it for the specific program that it was originally tied to (the taxes were created by previous propositions to fund specific programs), even if the money was needed for other programs. Voting no didn't lower taxes; it just restricted the use of the funds those taxes could be spent on.
 
[quote author="Geotpf" date=1244785037][quote author="SoOCOwner" date=1244783163][quote author="Geotpf" date=1244781043][quote author="rick_r" date=1244774260]How will home prices be affected in Irvine, OC, any city in the state? Will California living loose its luster (as if it has not lost it already)?</blockquote>


Prices might fall long term as crime increases due to cops being fired, schools get worse due to teachers being fired, roads get worse due to no money to repair them, etc.



But we showed them! We caused all the propositions to fail! Yeah us!



You get what you pay for. If you aren't willing to pay for it, you get what you deserve.</blockquote>


The taxpayers voted 'no' bacause they realized that California could no longer run on borrowed money. We pay some of the highest taxes in the country and we have finally had enough. I voted 'no' and I am one of the people who could very well be laid off or furloughed. I view this decision as 'tough love'. There is so much waste in state government - I see it on a daily basis. So many processes and procedures are left "status-quo" because hey, they've worked in the past - why rock the boat? The state will be forced to make some tough decisions and they will have to reorganize and restructure many things. Many programs (that never should have been implemented in the first place) will shut down. Yes, people will be laid off. However, once things shake out, I believe California will be a better place.</blockquote>


There could be arguments on 1A, 1B, and 1C.



But voting no on 1D and 1E was just dumb. 1D and 1E removed restrictions on the use of certain taxes to certain programs and allowed the money to go to the general fund. Voting no on 1D and 1E meant the state has to continue to take that tax money and use it for the specific program that it was originally tied to (the taxes were created by previous propositions to fund specific programs), even if the money was needed for other programs. Voting no didn't lower taxes; it just restricted the use of the funds those taxes could be spent on.</blockquote>


I can't blame folks for being wary of this set of propositions. Legislators word these props in such a convoluted manner that oftentimes voters are worried that 'yes' means 'no' and vice-versa. Folks lumped this group of propositoins together (except for F) and voted 'no' for fear of being tricked, perhaps. The 'suggestion' was made to us at my workplace (not that they can legally do that, of course) to vote 'yes' on only 1A.
 
God forbid all the State Employees and their Unions join the rest of us in the real world we live in. All these Prison Guards making over $100K a year and all the Police and Fire making

6 Figures take a cut. My heart is just broken for them. Maybe we pull the plug on the defined pension system and welcome them to the defined contribution system the rest of us live with.



Its time for the PIG that is this State and all of its bloated government to get its azz

in line with the reality of todays economy.



Raise my taxes one more time and I am moving to Nevada and taking my business with me.
 
You know what's funny, Everyone knows that there are serious problems with the system and no one wants to do anything about it. Not only are the pension and health care plans F'd up, but the state does nothing with truly trying to deal with the illegal's and health care/welfare fraud.



You want to find some illegals why not drive by Home Depot one of these days. It's like when I used to live in Hollywood as a child. Everyone knew where the hookers where (corner of Western and Santa Monica) but no one did anything about it.



How about all the social service fraud with people claiming to be welfare or disabled and needing in home care. I used to see people in my old block that where on welfare living in a small section 8 apartment driving an S class Mercedes.



A funny example is the case of my wife's aunt. She is 60 years old and decided to go visit her home country a few years back. During her visit she was reunited with her long lost teenage love. They decided to get married and she brought him back to US as her husband. Two years goes by and he starts being a burden on her with health care and basic services. She decides to divorce him and tells him to F' off. This guy has never worked in the US and not provided one cent of tax dollars. So now he is on welfare, collecting $800/month, living in a section 8 apartment, getting health care through the state and living a quite convertible life.



WHY NOT SEND THIS FREAKIN GUY BACK FROM WHERE HE CAME FROM???



Sorry for venting, just pisses me off.
 
[quote author="xoneinax" date=1244792234]Orange County went BK in 2003 IIRC; luster has only increased since</blockquote>


Orange County filed for BK in 1994 and house prices where in the dumper because of it.
 
[quote author="rick_r" date=1244792044]You know what's funny, Everyone knows that there are serious problems with the system and no one wants to do anything about it. Not only are the pension and health care plans F'd up, but the state does nothing with truly trying to deal with the illegal's and health care/welfare fraud.



You want to find some illegals why not drive by Home Depot one of these days. It's like when I used to live in Hollywood as a child. Everyone knew where the hookers where (corner of Western and Santa Monica) but no one did anything about it.



How about all the social service fraud with people claiming to be welfare or disabled and needing in home care. I used to see people in my old block that where on welfare living in a small section 8 apartment driving an S class Mercedes.



A funny example is the case of my wife's aunt. She is 60 years old and decided to go visit her home country a few years back. During her visit she was reunited with her long lost teenage love. They decided to get married and she brought him back to US as her husband. Two years goes by and he starts being a burden on her with health care and basic services. She decides to divorce him and tells him to F' off. This guy has never worked in the US and not provided one cent of tax dollars. So now he is on welfare, collecting $800/month, living in a section 8 apartment, getting health care through the state and living a quite convertible life.



WHY NOT SEND THIS FREAKIN GUY BACK FROM WHERE HE CAME FROM???



Sorry for venting, just pisses me off.</blockquote>


I agree there are cases of fraud out there but that is not the reason why our government is going bankrupt.
 
[quote author="Irvinian" date=1244792608][quote author="rick_r" date=1244792044]You know what's funny, Everyone knows that there are serious problems with the system and no one wants to do anything about it. Not only are the pension and health care plans F'd up, but the state does nothing with truly trying to deal with the illegal's and health care/welfare fraud.



You want to find some illegals why not drive by Home Depot one of these days. It's like when I used to live in Hollywood as a child. Everyone knew where the hookers where (corner of Western and Santa Monica) but no one did anything about it.



How about all the social service fraud with people claiming to be welfare or disabled and needing in home care. I used to see people in my old block that where on welfare living in a small section 8 apartment driving an S class Mercedes.



A funny example is the case of my wife's aunt. She is 60 years old and decided to go visit her home country a few years back. During her visit she was reunited with her long lost teenage love. They decided to get married and she brought him back to US as her husband. Two years goes by and he starts being a burden on her with health care and basic services. She decides to divorce him and tells him to F' off. This guy has never worked in the US and not provided one cent of tax dollars. So now he is on welfare, collecting $800/month, living in a section 8 apartment, getting health care through the state and living a quite convertible life.



WHY NOT SEND THIS FREAKIN GUY BACK FROM WHERE HE CAME FROM???



Sorry for venting, just pisses me off.</blockquote>


I agree there are cases of fraud out there but that is not the reason why our government is going bankrupt.</blockquote>


True, but it's an example of programs our state has been place that are overly inflated. Illegals and healthcare/welfare fraud cost the state billions.
 
[quote author="ABC123" date=1244780064]more importantly what will happen to my Vanguard CA LONG-TERM TAX-EXEMPT bond fund? should have gotten rid of it a few weeks ago</blockquote>


i'd say if you don't have a good reason for holding it, dump it. that's a good rule to follow when you have to convince yourself to liquidate a depreciating investment. can you come up with a good reason to invest in long-term CA munis?

i got rid of it right before the election. i couldn't believe that there was a CA bonds rally even though the outcome of that vote was quite obvious.



i'm a little worried about my CA tax exempt money market. even though it's short-term paper, i wonder what would happen if the state stops paying. but i have to put the money somewhere.



it's funny, vanguard keeps closing more of their MM funds, which to me suggests that people are massively selling stocks and moving into cash. at the same time the MSM claims the opposite, money moving from MM to equities. should i believe what i see or what the media is saying? i think i know the answer to that one :)
 
[quote author="Geotpf" date=1244781043][quote author="rick_r" date=1244774260]How will home prices be affected in Irvine, OC, any city in the state? Will California living loose its luster (as if it has not lost it already)?</blockquote>


Prices might fall long term as crime increases due to cops being fired, schools get worse due to teachers being fired, roads get worse due to no money to repair them, etc.



But we showed them! We caused all the propositions to fail! Yeah us!



You get what you pay for. If you aren't willing to pay for it, you get what you deserve.</blockquote>




Yes, I'd like to get what I pay for!



We are already paying way too much, more than anyone else in this country, save for NYC.

And I don't think we've been getting what we deserve for all that money.

Suggesting that the voters were foolish for refusing to throw more money into the black hole is ridiculous.
 
[quote author="freedomCM" date=1244854500]hedgehog, why don't you think/investigate a little before you post/whine?



CA ranked #20, just slightly ahead of the national median, for state and local tax burden



http://money.cnn.com/pf/features/lists/taxesbystate2005/</blockquote>


your "think/investigate" comment is uncalled for.



i am looking at the personal income tax and sales tax.



the top tax bracket in california for 2008 was 9.3%. (well, technically 10.3% if you are making >$1M, but let's ignore that).

that's less only than vermont's 9.5%. nyc tax is 6.8 + 3.2 = 10%.



sales tax:

http://www.taxadmin.org/FTA/rate/sales.html

california is #1 according to that one.

current orange county sales tax is 8.75% last time i checked.



this is what i'm paying, and i know how much i'm paying.



i don't know how they came up with the numbers in your table.



if this is because a lot of california residents have low property taxes due to prop.13, then it might be true.

as a current renter, prop.13 pisses me off to no end. it would be hard to abolish that one though.

i definitely don't want to pay more taxes so that other residents pay low property taxes.
 
[quote author="bltserv" date=1244786793]God forbid all the State Employees and their Unions join the rest of us in the real world we live in. All these Prison Guards making over $100K a year and all the Police and Fire making

6 Figures take a cut. My heart is just broken for them. Maybe we pull the plug on the defined pension system and welcome them to the defined contribution system the rest of us live with.



Its time for the PIG that is this State and all of its bloated government to get its azz

in line with the reality of todays economy.



Raise my taxes one more time and I am moving to Nevada and taking my business with me.</blockquote>


Basically, the argument here is that teachers and police officers are paid too much. Do you really think that?



In any case, in a unionized situation such as this, job cuts are much more likely than salary/benefit cuts. This means fewer cops on the streets, worse schools, more prisoners released early, fewer roads repaired, etc.
 
[quote author="hedgehog" date=1244856162][quote author="freedomCM" date=1244854500]hedgehog, why don't you think/investigate a little before you post/whine?



CA ranked #20, just slightly ahead of the national median, for state and local tax burden



http://money.cnn.com/pf/features/lists/taxesbystate2005/</blockquote>


your "think/investigate" comment is uncalled for.



i am looking at the personal income tax and sales tax.



the top tax bracket in california for 2008 was 9.3%. (well, technically 10.3% if you are making >$1M, but let's ignore that).

that's less only than vermont's 9.5%. nyc tax is 6.8 + 3.2 = 10%.



sales tax:

http://www.taxadmin.org/FTA/rate/sales.html

california is #1 according to that one.

current orange county sales tax is 8.75% last time i checked.



this is what i'm paying, and i know how much i'm paying.



i don't know how they came up with the numbers in your table.



if this is because a lot of california residents have low property taxes due to prop.13, then it might be true.

as a current renter, prop.13 pisses me off to no end. it would be hard to abolish that one though.

i definitely don't want to pay more taxes so that other residents pay low property taxes.</blockquote>


But due to prop 13, other taxes have to be higher to make up for the shortfall, or you get less services (police/fire/schools/road repair/prisons). It's just the way it is.
 
Depends who's doing the survey I think...



According to this we are #6 in 2008, but I'm sure it will go up in 2009 due to the 1% statewide sales tax increase.



<a href="http://www.taxfoundation.org/research/topic/15.html">http://www.taxfoundation.org/research/topic/15.html</a>



<a href="http://www.taxfoundation.org/taxdata/show/443.html">http://www.taxfoundation.org/taxdata/show/443.html</a>



(scroll down on the table in the middle)
 
[quote author="Geotpf" date=1244856352]

But due to prop 13, other taxes have to be higher to make up for the shortfall, or you get less services (police/fire/schools/road repair/prisons). It's just the way it is.</blockquote>


That's wealth redistribution of the worst kind, don't you think? The people who benefit from prop.13 are generally wealthier and financially stable (well, they should be, if they didn't waste it all through HELOCs). And you're shifting the tax burden to younger taxpayers and to low-income taxpayers who are renting.



Abolishing Prop.13 is a tax hike I could get behind, of course, with the presumption that it would lead to lowering of other taxes.

I'm wondering whether that might become politically viable after 2-3 more years of declining property values...
 
You must log in or register to reply here.
Back
Top