"California's dire and ongoing budget predicament is raising a tough - and touchy - question about the state's finances, one that some at the Capitol do not want discussed: Is California bankrupt?"
Leaders and would-be leaders from both major parties have raised the b-word in the past weeks, and the Golden State is frequently labeled as bankrupt by people nationwide.
Federal law prohibits states from declaring bankruptcy and without a legal framework, assertions about California's solvency are left to interpretation. But persistent multibillion-dollar budget deficits, cash crises, tens of billions of dollars in debt and other obligations have blurred the legal distinction.
"California is deeply in debt. You could say that it's bankrupt," Attorney General - and presumptive Democratic gubernatorial candidate - Jerry Brown told a group of young Democrats earlier this month.
Republican U.S. Senate hopeful and former Hewlett Packard CEO Carly Fiorina raised the specter of bankruptcy in a discussion with Southern California business owners. And Republican Assemblywoman and retired banker Diane Harkey of Dana Point (Orange County) said the state is "literally bankrupt."
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/02/21/MNJ71BUILC.DTL#ixzz0gGp3rRaS
Leaders and would-be leaders from both major parties have raised the b-word in the past weeks, and the Golden State is frequently labeled as bankrupt by people nationwide.
Federal law prohibits states from declaring bankruptcy and without a legal framework, assertions about California's solvency are left to interpretation. But persistent multibillion-dollar budget deficits, cash crises, tens of billions of dollars in debt and other obligations have blurred the legal distinction.
"California is deeply in debt. You could say that it's bankrupt," Attorney General - and presumptive Democratic gubernatorial candidate - Jerry Brown told a group of young Democrats earlier this month.
Republican U.S. Senate hopeful and former Hewlett Packard CEO Carly Fiorina raised the specter of bankruptcy in a discussion with Southern California business owners. And Republican Assemblywoman and retired banker Diane Harkey of Dana Point (Orange County) said the state is "literally bankrupt."
Protecting state's reputation
She compared the state's situation to a family with a mortgaged house, maxed out credit cards and zero savings. She said her outspokenness on the topic at public meetings andRead more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/02/21/MNJ71BUILC.DTL#ixzz0gGp3rRaS