What California needs is the power to issue its own currency, call it the CMB (the California moon beam), legal tender for all California debt, public and private. Well, public anyway. Initially equal to $1. But only initially ...
> San Diego's Poway Unified School District borrowed a little more than $100 million. But "debt service will be almost $1 billion," Lockyer says.
Poway's population is 48,518, comprising 16,128 households. 6,493 households have children, so this is costing them $154,012 per household with children for one expense, at a time when they already had several school buildings that were not old and were in good condition. The population of children is not increasing. It's certainly not the only expense to run the schools either.
How will the 16,123 households pay their $62,003 debt per household?
If they all sell their houses and assets it can be paid back.
Surely they won't be that dumb and will just default via Chapter 9 city bankruptcy? I'm mostly wondering who's dumb enough to trade good cash for bad debt on those terms.
As someone who lives in the area, the PUSD includes (very affluent) parts of San Diego. The district is huge, and its Mello-Roos income is also huge. This is absolutely outrageous. Rest assured, the entire school board will be dumped come the next election...
Too bad the US Constitution was created to deal precisely with this issue. If only it didn't state that "No state shall. . . make any Thing but gold and silver Coin a Tender in Payment of Debts."
Quick, call your representative and ask for the California Moon Beam amendment to be passed!
During one of the recent California budget emergencies (don't remember which one, there seem to be two or three every year), the state issued I.O.U.s to contractors and employees. Initially banks accepted I.O.U.s at the same rate as US dollars, but ever confident about California's legislative wisdom, politely declined afterwards, which led to a whole bunch of entrepreneurial activity on Craigslist "services" section, where you could sell a California I.O.U. for about 75-80 cents on the dollar.
Debt obligations can serve as a proxy for money, so California can already issue those. What they don't have the power to do is to require it to be legal tender, so in a way this inflationary currency would only be accessible to those who have no choice but to accept it (i.e. state contractors and employees).
Issued in: 2010. Principle: $2,999,949. Due in 26.1 years: $33,820,000
That works out to an interest rate of 10.495%. How does that compare to your mortgage interest rate?
http://spreadsheets.latimes.com/capital-appreciation-bonds/
What California needs is the power to issue its own currency, call it the CMB (the California moon beam), legal tender for all California debt, public and private. Well, public anyway. Initially equal to $1. But only initially ...