In the midst of the Bush-Obama balance sheet bailout, one group stands
out in its
importance -- bondholders. I know -- a couple of times some bondholders
have had to
take a haircut to protect other investors.
Here in California, with our $24 billion deficit, it seems like nothing --
absolutely nothing -- and threaten bondholders. Yes, some bondholders
are pension
funds or charitable organizations. A minority of Republicans along with
a movie star
governor have adamantly refused to raise taxes, especially those taxes
that might
affect the class of people who are bondholders.
Education and healthcare are being slashed beyond recognition. My God,
even prisons
might be cut a bit. The state is also raiding the treasuries of cities
and counties
for funds. Their response will be the same as the state's: cut back on
anything that
might help the poor and if necessary extend the cuts to the middle
class. All this
so that California can payback its bondholders. No haircut here. They
must be paid
back in full.
And the children, deprived of adequate education and health care, of
course, they
must make a modest sacrifice to protect the interests of bondholders.
--
Michael Perelman
Economics Department
California State University
michael at ecst.csuchico.edu
Chico, CA 95929
530-898-5321
fax 530-898-5901
www.michaelperelman.wordpress.com
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