Conservative Economic Commentary | Topic: Arnold Schwarzenegger

State finances:

SEC equates California IOUs to munis

By John Schroy, on July 11th, 2009 |

By July 2009, the State of California, one of the world’s larger economies, was unable to pay its bills, the result of profligate spending in the state legislature in Sacramento.

Governor Schwarzenegger was forced to issue State IOU’s to pay creditors.

The US SEC went along with this, declaring this fiat money to be equivalent to municipal bonds. As usual, California leads the country. In this case, the precedent is not good.

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Real Estate 1995-2004

Construction, land costs, and pensions

By John Schroy, on February 28th, 2006 |

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Over the decade 1995 – 2004, the market value of US residential real estate increased, on average, about 10% a year. The imputed value of land as a percentage of total residential property values, rose from 25% to 38%. The older the city, the greater the burden unionized public servants will be on local property values.

State and Local Government liabilities with pension funds (Q3 2005) totaled US$2.7 trillion, and this is probably understated.

Whereas citizens cannot escape federal taxes, they can run from state and local taxes by moving to lower-tax areas — ‘voting with their feet’, as it were.

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