California Higher Risk of Default than Iraq

Toro

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CMA, one of the leading providers of data on credit-default swaps, ranks California as among the sovereign debtors with the greatest chance of defaulting. In CMA's tally, California is better off than Venezuela, Argentina, Pakistan, Greece, the Ukraine and Dubai. But the Golden State comes off worse than Latvia, Sicily and Iraq.
However …

But are states in the same dire straits as Greece, as critics charge? The data do not bear out their bleatings, according to an analysis from the Royal Bank of Canada. Although the states of California, New York, New Jersey, Massachusetts and Illinois are comparable in terms of economic output and population to Portugal, Ireland, Italy, Greece and Spain, RBC finds the states' debt burdens are nowhere near that of the PIIGS.

For instance, California has $70 billion in tax-supported debt a "GDP" of $1.8 trillion and a population of 36 million, according to RBC's tally. Italy comes closest with a GDP of $2.1 trillion, a population of 60 million, but a debt of $2.6 trillion. Greece has a $428 billion in debt, well in excess of GDP of $331 billion, which is supported by a population of just 11 million.
We're Not Greece--Yet - Up and Down Wall Street Daily - R. Forsyth - Barrons.com
 

georgephillip

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What would happen if the state of California started doing business as the State Bank of California the way North Dakota did in 1919?

"A state-owned bank could be fast tracked into operation in a matter of weeks. With over $17 billion available to deposit in its own bank, California could create $170 billion or more in credit--enough not only to meet its budget shortfall but to fund many other much needed projects; and rather than feeding an ungrateful Wall Street, the banks profits would return to the state and its people."

Ellen Brown's Web of Debt
 

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