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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: JF Quinnelly who wrote (12633)	8/19/2003 12:47:28 AM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 306849

I heard this discussed on a talking heads show this weekend, and I can tell you are not rational on the matter. I am sure that if a fed bailout of any kind is involved, state constitutions are overturned in the courts. California is not a sovereign country, you know. The fed mandates certain requirements on the states, and if california voters pass tax laws that essentially make the state go into default, in order to provide these and other basic services, the fed steps in. We have a 38 BILLION dollar deficit. As an example take a look at the NY situation (much less severe btw)- The borrowing enacted in the state budget would pay off $2 billion in debt the Municipal Assistance Corp. issued in the mid-1970s to avert city bankruptcy. Under the state budget, funds to pick up payment of that old debt would come from state sales taxes that go through a state authority called the Local Government Assistance Corp. The corporation, created in 1990, rolled the state's annual midyear borrowing for local aid into long-term debt. The state constitution allows state borrowing only for one capital project at a time after voter approval, yet the corporation survived court challenge. Personally I think prop 13 could be easily overturned in court on an age discrimination charge with the economic ramifications of siphoning. The reason it hasn't been overturned thus far has more to do with PR than fairness. Macy's had a viable case against prop 13 a while ago and backed down, not because they couldn't win, but because it was bad PR. I wish I could create a law that said nobody under 40 ever had to provide for any older persons healthcare or social security payments. I'm sure i could pass a law along those lines with a majority vote in CA, as long as nobody over 50 was allowed to vote. But that doesn't make it right or just and eventually somebody would overturn it.