Palo Alto Daily News
Serving Atherton, East Palo Alto, Los Altos, Los Altos Hills, Menlo Park, Mountain View, Portola Valley, Stanford, Sunnyvale, Woodside
Tuesday Aug. 5,2008 Opinion
But in California, they had it all figured out where the rich could stay rich and feed the poor on borrowed money, now 15 billions in the hole! They kept borrowing money and selling bonds borrowing more money. Well, people will trust you so long, and then they quit trusting your ability to ever pay it back. So if you keep living on borrowed money, there comes a day when you have to pay it back when those bonds begin to come due.
These debts began to come due with all their big high interest rates and they didn't have the money to pay them back. She'd been living on borrowed money all the time and wasn't even raising enough money for her current expenses, much less to pay back her debts. So if California goes bankrupt and defaults on all these debts, all these bonds are worth nothing and all these people who put their money in the bank can't get it back because the bank goes bust because the money's gone, and its all just on paper!
Ted Rudow III,MA