What Happens If The Thrid Largest Economy In the World Goes Bust?

Government of California Economy of California

The state's problems are serious but don't have any of the implications you are saying it does.

Why not? You know that we the state cannot raise taxes with out a majority vote?

http://www.aaenvironment.com/LongBeachPort.htm

http://www.grownincalifornia.com/

The government isn't growing the food, as one example, so while their problems would certainly impact the economy it simply doesn't mean that the food stops growing and all the Californian economy grinds to a standstill.

Don't distributors all across the country who want the produce and such to go to different stores pay to have it shipped?

Yes and they'd continue to do so if California is not bailed out.

Don't get me wrong, California (and other states) need some Federal help very quickly, I posted a thread about it earlier called "The States Need Help" but this isn't what would happen. The biggest effect of what would happen is large layoffs and bad loans.

That's bad enough of a consequence, but California's economy isn't going to just shut down because the state government has a cash flow problem.

It's not the end of the world yet; California is the fifth or sixth largest economy in the world. Agriculture in California will not stop. California produces high tech, biotech, movies, produce, education (some of the best colleges in the US and the world), communication, trade, finance, defense, tourism, and many varieties of products and services.

That doesn't mean we won't suffer from the economic downturn, but our ability to survive is enhanced by our multitudes of industries.

Have faith.

That is the most encouraging thing I have read in a really long time C.I. - thank you for that!

I like the cup half full philosophy.

I'm sorry, but as bad as our economy is in, the thought that just went through my head after reading this is pretty funny....
I guess when the economy hits rock bottom and no one can afford any food, shelter or clothing, we will all just stand naked outside with our hands up in the air, shaking our heads, without the desire to be productive any longer? Come on! Yes, the market is currently in the tank, but is the plan now to just sit around and throw our hands up? No. We will continue to push, work hard, make sacrifices and smart decisions to better our own situations. No matter how bad the economy gets, we will always have needs, and there will always be somebody (or large corporation) who still has money and is willing to pay someone else to get those needs for them. If the financial world is turning against you, be creative and use you mental and physical abilities. It will get better. Believe it or not, the financial market is like a roller coaster with many up and down cycles. We are currently in a dip. As long as there are people willing and able to work and produce, the economy will continue to have value. I guarantee you, there are MANY people who will become millionaires BECAUSE of the current situation - even if some luck and good timing is involved. AIG plummetted to about $1.25 per share on 9/16. Everyone who bought at that price could have made a HUGE profit and sold at $5.56 on 9/23! It has already cycled back down, up and down since then with more buying opportunities. There are many who will be creative during this time, take the risks and reap the rewards down the line. By the way, I'm not advocating you buy AIG. As far as I know, it could disappear tomorrow completely. I'm just voicing my oppinion for what I see.

Nothing wrong with your eyesight. Welcome to the "band" wagon of positive messages to the masses.

Gilroy is also the garlic capital of the world.

buffalo wrote :



from my limited understanding , one of the current problems is that the financial institutions (and individual investors - big and small -) do not want to lend out any more money . they are afraid that they will not be repaid !

that , i believe , was one of the problems when AIG started to falter . they had insured big lenders against credit defaults by borrowres (simply put : if A borrowed money from B but was unable to repay , AIG would pay back the lender . AIG had pocketed the premium for the default insurance but had invested the money "unwisely" . so AIG was not able to pay the lender the insured sum .
not really any different than insuring your house against fire only to find out that when you had a claim that your insurance company had no money to pay you ) .

currently companies are looking for payroll loans and loans to pay for raw materials . the goods would be produced later , sold at a profit and the loans repaid . apparently many companies find that they cannot find lenders !
so companies may be forced out of business (some already have closed up ) - workers lose their jobs - new jobs seem to be scarce right now - unemployment is rising daily ... ... a pretty vicious circle imo .
it doesn't mean that people are lazy ; they may simply not be able to find anyone willing to pay for the services they are offering . it has happened before ; let's just hope that there will not be a repeat !

i think a lot will depend on whether or not the U.S. government will still be able to raise sufficient money in FOREIGN countries - time will tell .
a/t some economists now is a good time for foreigners to invest in the U.S. since shares have ben beaten down considerably .
(are you looking forward to increased FOREIGN ownership of american corporations ? )
hbg

here is what CNN MONEY wrote today - see link for complete article :

http://money.cnn.com/2008/10/08/markets/bondcenter/credit_markets/?postversion=2008100817

What might it require to raise the $7 trillion needed, a fifth of one percent, a half of one percent tax on the porn industry?

JTT :
i keep hearing the chant : "NO NEW TAXES !" .
imo porn users are as unlikely as any other taxpayer to "volunteer" for new taxes .
we'll see if anyone posts that they are looking forward to PAYING higher taxes on porn , booze , cigarettes , gasoline , powerboats ... ... you name it .
THE LINE FORMS TO THE RIGHT >>> >>>
hbg

anarchy is iminent.

YAY.

I have orange, lemon, grapefruit, avocado, strawberry and many types of vegetables all grown around here in So Cali., mostly within walking distance of where I live. I'm all set!

i'm surprised that NO ONE has posted that they PERSONALLY are willing to pay increased taxes !
i thought the page would be overflowing with applicants .
what happen ?
when i check in this afternoon , i expect people to be waiting in line , ready to make THEIR contribution - and it better be money !!!
hbg

just heard on CNBC 10:30 a.m. that several U.S. cities have announced that they are having a REVENUE SHORTFALL (taxes aren't coming in , i guess) and that they are in urgent need of federal assistance .
so go ahead , pay your extra voluntary taxes - buffalo and JTT are invited to make their contributions NOW !
hbg