Cash Strapped California Votes For $68 Billion Monorail To Get Federal Bailout

Tyler Durden's picture

California's budget deficit may be $16 billion (up from $9 billion in January), the state's cities may be keeling over and filing for bankruptcy left and right (Stockton and Mammoth Lakes), and overall container traffic at the Port of Long Beach may have dropped 7.2% in May compared to last year, but at least California is about to get its own monorail. Well, maybe not monorail, but certainly a high speed line between Los Angeles and San Francisco for the low, low price of at least $4.5 billion in debt to start (and much, much more to actually end). The winners: Keynesians and labor groups. The losers: anyone who has ever taken math for idiots. From USA Today: "California lawmakers approved billions of dollars Friday in construction financing for the initial segment of what would be the nation's first dedicated high-speed rail line connecting Los Angeles and San Francisco. The state Senate voted 21-16 on a party-line vote after intense lobbying by Gov. Jerry Brown, Democratic leaders and labor groups." And while nobody really expects the train to actually be built, here is the real reason for passing the legislation: "The bill authorizes the state to begin selling $4.5 billion in voter-approved bonds that includes $2.6 billion to build an initial 130-mile (210-kilometer) stretch of the high-speed rail line in the Central Valley. That will allow the state to collect another $3.2 billion in federal funding that could have been rescinded if lawmakers failed to act Friday." In summary, just passing the bill, gives California a $3.2 billion federal bailout while the actual use of funds may or may not ever appear (or money is on the latter). If still confused think Greece and Germany, because Federal tax collections were just used to give California a very fungible cash injection. Where the money ends up now is anyone's guess.

From USA Today:

"The Legislature took bold action today that gets Californians back to work and puts California out in front once again," Brown said in a statement. He later celebrated with Senate President Pro Tem Darrell Steinberg, a fellow Democrat.

 

Brown pushed for the massive infrastructure project to accommodate expected population growth in the nation's most populous state, which now has 37 million people. He said the project is sorely needed to create jobs in a region with higher-than-average unemployment.

 

The bill, which passed the state Assembly on Thursday, now heads to Brown for his signature.

 

The first segment of the line will run from Madera to Bakersfield. The final cost of the completed project from Los Angeles to San Francisco would be $68 billion.

There are those who sadly still have their Math for Idiots textbooks lying around:

Senate Republicans blasted the decision, citing the state's ongoing budget problems.

 

"It's unfortunate that the majority would rather spend billions of dollars that we don't have for a train to nowhere than keep schools open and harmless from budget cuts," Republican Sen. Tom Harman said in a statement.

 

Republican Sen. Ted Gaines said the project would push California over a fiscal cliff. "It will require endless subsidies and will blast a massive hole into our budget," he said in a statement.

Cliff... Shpliff. It seems Mr. Gaines has not yet figured out that the only way to survive in a post-Keynesian limit world, in which everyone is bankrupt, is to dig a deeper hole and get as much of whatever bailout money is available first.

Yet don't blame California for this mathematical abortion: the fault lies with the Federal government for creating perverse spend, spend, spend incentives.

Dan Richard, chairman of the California High-Speed Rail Authority, which is managing the project, said California would have lost billions of dollars in federal aid if the Senate fails to pass the bill before adjourning Friday for a monthlong recess.

 

Richard said California entered a contract that called for the federal government to provide money for building the Central Valley segment if the state also put up its share.

 

California was able to secure more federal aid than expected after Florida, Ohio and Wisconsin turned down money.

States turning down bailout money? What is this world coming to. Yet in the end even some democrats realized what utter insanity the project is.

One dissenter, Democratic Sen. Joe Simitian said public support had waned for the project, and there were too many questions about financing to complete it.

 

"Is there additional commitment of federal funds? There is not. Is there additional commitment of private funding? There is not. Is there a dedicated funding source that we can look to in the coming years? There is not," Simitian said.

At the end of the day, who cares: by the time the next bailout installment is needed, the EFSF/ESM will be fully operational and Germany (whose citizens will be "mandated" to retire not sooner than Yoda) can just step in and save California as well.

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francis_sawyer's picture

They could also spend another $68 billion to have electronic freeway signs that say:

~~~

- Carpoolers make better lovers

OR

- Don't shoot!

Next thing you're going to tell me is that the proposed 'route' of the monorail system is along the San Andreas Fault Line...

Joe Sixpack's picture

Madera to Fresno. From nowhere to nowhere.

DoChenRollingBearing's picture

What, what, what is going ON in your mind-numbed brains, you voters in California?!?!  WTF are you doing?  Do you not KNOW that this is pure lunacy?

It takes my breath away how California isn't falling into the Pacific even now...  Or is this just more of the prosaic and brazen CORRUPTION I am starting to see everywhere now?

California: Get a grip and come to your senses....

Hulk's picture

Its free money from the fed Dochen, and an addict must have his fix...

redpill's picture

It couldn't be more ass-backwards. In a world of cheap, short airplane rides between LA and SF, and in a world where telecommuting or online virtual meeting is becoming the standard, it is mind-numbingly stupid to waste billions on a railroad project that largely will NOT be high speed, will cost way more than flying or driving for the passenger, and to even stand a chance of breaking even would need to see more traffic in Modesto than Grand Central Station. Fucking lunacy! Black hole of waste. Legislative malpractice, fraud on the taxpayers in CA and across the nation, and fiscal irresponsibility to the point of criminal negligence. Meanwhile these very same assholes are threatening to shorten school years, raise tuition at state schools, etc etc. Fuck them all.

Careless Whisper's picture

The Careless Whisper High Speed Train ALL VIDEO Update

 

Nancy Pelosi: Thomas Jefferson Envisioned Cali High Speed Trains

http://vimeo.com/43030645#t=8min31sec

Germany's Siemens Wants To Build Cali High Speed Train

http://www.youtube.com/watch?v=P8P8RtS5tSc

France's Alstom Wants To Build Cali High Speed Train

http://www.youtube.com/watch?v=lSgJv4TYshI

FLASHBACK July 2011: Hundreds Dead In China High Speed Train Crash; Siemens Technology

http://www.youtube.com/watch?v=YfcKmEF3gnY

China: Rail Minister - Hundreds Of Millions In Bribes

http://www.dailymotion.com/video/xh1b42_senior-chinese-minister-liu-zhijun-fired-in-corruption-probe_news

FLASHBACK February 2012: 49 Dead In Argentina High Speed Train Crash: Alstom Trains

http://www.youtube.com/watch?v=Ga-QmlQtO-I

LEGO: High Speed train Crash

http://www.youtube.com/watch?v=V_Qo4a_3IeQ

JUST RELEASED COMMERCIAL: Louis Vuitton Luggage For High Speed Train Traveller

https://www.youtube.com/watch?v=gB2ZwFkyMM4

 

 

 

 

redpill's picture

Well obviously there is corruption, but it's ideological stupidity on top of corruption.  If they were really interested in building a successful rail project, proposals for it do exist. Most notably, a primarily privately-funded high speed train from the LA area to Las Vegas. Party car, casino car, cocktail bar car, hell even a stripper car! Soon as you cross state lines people can start gambling onboard, slots, sports book, etc. Since it's usually a leisure trip there would be lots of booze consumed, which has excellent profit margins as well. The trip is a straight shot, there would be no need for many stops at all, unlike a marathon straight up the state.

But they won't do this for two main reasons. 1) It wouldn't go to liberal mecca San Francisco, which is obviously a primary requirement, and 2) They certainly wouldn't want to help their filthy neighbor Nevada do anything even if ultimately the increased economic activity is beneficial for all.

Oh regional Indian's picture

Very Smart. Put in a rail line on one of most seismically active places on earth.

San Andreas, meet formerly parallel tracks to infinity...

With no apologies to Rahrah Pawlin.

ori

Hulk's picture

There will never be a rail line. At this point, its all about getting that FED money...

Careless Whisper's picture

One hour to get through the TSA checkpoint for a 45 minute train ride. Makes perfect sense.

zaphod's picture

The biggeer problem, which seems to be missed in all of this is:

Why does it even cost ~$70B to build a train track that goes roughly the same distance as NYC to DC. This is an absurd amount of money that only seems small because of the T's Benny has been tossing around, but it still is a massive amount of money.

The cost alone is an indication this is not a serious project..

OldPhart's picture

The San Andreas crosses through the Cajon Pass between San Bernardino and the High Desert.  Along the Cajon Pass is Interstate 15, which has a small bridge over the highly visible fault.  Down the valley, along the Santa Ana river to the east, are a number of Southern Pacific Burlington Northern railroad tracks that are in heavy use every day as transfers from the Port of Long Beach and other facilities are routed to Barstow and beyond.

These tracks also cross the San Andreas.

A high speed rail system, though I find it dubious, would make some minor sense going from LA to Lost Wages with a stop in Barstow.  In Barstow, travelers from the Central area could connect as well as those in the High Desert. 

Ideally the tracks would parallel I-15 so that those caught in the rather frequent traffic jams out in the middle of nowhere will witness the train zipping by.  I might even make the trip, once, but would rather have my own means of transportation where ever I wind up.

palmereldritch's picture

FYI

From the green-red paradigm:

http://www.treehugger.com/urban-design/bucolic-vision-agenda-21-future-a...

It appears they are beginning to step away from the word "sustainability"

Lore's picture

Good point. Agenda 21 sociopaths love rail projects as much as they love destroying communities with crushing debt. BIG RED FLAG: BEWARE OF RAIL PROJECTS IN YOUR AREA. THEY ARE A "GREEN" RECIPE FOR FINANCIAL DISASTER.

More on Agenda 21: http://www.postsustainabilityinstitute.org/the-post-sustainable-future.html

Lucky Guesst's picture

"FLASHBACK July 2011: Hundreds Dead In China High Speed Train Crash; Siemens Technology"

 

I'm still against it but slightly less now. The stupid asses will get what they deserve.

Pure Evil's picture

Of course they should shorten the school year. Look what they produce. After the chillin' graduate they go out and vote for Governor Moonbeam, and Bailout Obama.

Where's my EBT card?

stirners_ghost's picture

The madness of crowds...

I stopped decrying the idiocy of California voters when I realized they're on a path to destroy government--same as me--and they're doing it very efficiently, without additional violence.

Don Keot's picture

Corruption is now at the lowest levels of city government and connected business, at lesast in California.

Dr. Sandi's picture

That actually makes a lot of sense. When there's nothing much left to steal, move along to somewhere that still has  goodies.

Prince Eugene of Savoy's picture

Public employee unions run bluest California.  One party to rule them all.

Bolweevil's picture

...and in the darkness bind them. 

Stuck on Zero's picture

I'm a California voter.  Here's our reasoning.  We can borrow billions cheaply today and spur the economy.  The likelihood that we'll have to pay it back is zero.  We're going to default.  We'll never pay it back but we'll get all the benefits today.  It's olike maxing out your credit card knowing full well you're going to declare bankruptcy.

Not only that, but it's likely that the rail will be built by a Korean contractor, using Japanese trains, Indonesian, concrete, and Chinese steel rails.  Therefore they'll be stuck with all the losses.

 

DoChenRollingBearing's picture

Actually, + 1 from me.  Your explanation makes sense!

I am not chumbawamba, but he would approve your reply!

Divine Wind's picture

 

 

StuckOnZero:

 

Oh ! You mean blatant theft, yes?

 

Stuck on Zero's picture

The only thing Californians have to lose in this proposition is their good name.

 

mick_richfield's picture

I think the way to say that faster is "We are thieves."

 

mick_richfield's picture

Oops -- sorry, Divine Wind.  Your wisdom only wafted over me after I copied it.

bigfire's picture

Nope.  The railroad from nowhere to nowhere have one purpose only.  It's a slush fund for the Democratic party machine and their government worker union overlord to spend as they see fit.  The actual railroad, who cares, it's money they can spend.  Better yet, it's government money.  If they ran out of that, just tax the rich.  That always works.

Lucky Guesst's picture

Thanks A LOT!!!!! Take money from other cash strapped states for yourselves and don't pay it back. FUCK YOU ALL!!!!!!

Steadfast's picture

Actually,

 

The money the Fed is extending to California is available thanks to the US Treasury Bonds being bought by China...Bonds that have interest paid TO China. And bonds that the US Treasury guarantees to repay TO China.

So, the Korean contractor, using Japanese trains, Indonesian, concrete, and Chinese steel rails WILL get paid out of the proceeds issued by the Federal Government...even if California defaults.

And if California defaults, which I expect them to do, the Chinese (Bond Holders) WILL STILL GET REPAID by the US Treasury... However, the money used to repay them may end up coming from higher taxes and interest rates assessed on ALL US taxpayers in all 50 states (including post-default California).

In that case...and all the similar examples states and local governments taking the bribe money in order to keep the farce going long enough for the next generation to receive the bill....is DESTROYING OUR COUNTRY AND ALL OF OUR FUTURES.

Wake up and admit YOU (California legislature and voters) are as guilty of DESTROYING America as are the Washington Politicians, and many of the US and global Corp Oligarchy.

 

 

VallejoVillain's picture

You didn't hear? They lost all our votes , so they just flipped a coin! START BUILDING

Never One Roach's picture

Stuck on Zero:

"Not only that, but it's likely that the rail will be built by a Korean contractor, using Japanese trains, Indonesian, concrete, and Chinese steel rails..." .....to carry Mexican passengers.

 

There, it's fixed now.

logically possible's picture

STUCK ON ZERO

"The likelihood that we'll have to pay it back is zero. We're going to default" 
     
Your typical of many Americans today. Void of any ethics and integrity. Your mentality is the reason why our country is in the situation it is today.

Royal Fleming's picture

Has nothing to do with the voters. Its the corrupt state govt. and the corrupt unions. I voted for nothing. As a matter of fact, I signed a petition to stop this high speed crap. We cant even get commuter trains to go over 30mph. without hitting a mexican tryin to go under the crossing gaurds , or some mental patient layin on the tracts commiting suicide. It a joke.

Dingleberry's picture

WRONG. Voters absolutely refused to reign in gov pending on police, fire, teachers and illegals. I was there when Arnie tried to get 4 referendums passed reigning the unions in just a tad in '07 I think........and guess what?

The voters tronced them ALL.  YOU voters are the problem. Not anyone else.  One day you will learn there is a limit to other poeple's money.

Royal Fleming's picture

I meant vote on the disneyland monorail to pelosi and boxer and feinstien land. This is a pure democrat state. Republicans dont stand a chance here. I've lived here all my life. and watched the deterioration of the state. It always reminded me of the crazy cat lady, that takes in and feeds so many cats with her bleeding heart , until she goes bankrupt, gets evicted and all the cats are off to the humane society to get destroyed.

Lucky Guesst's picture

So if she was my neighbor I would move away as fast as I could that way she doesn't drag down my property with hers. Your feeding the monster by living, working, spending there.

SolidSnake961's picture

as bart simpson says, "sorry mom, the mob has spoken"

hivekiller's picture

It's the legislature that wants this, not Californians. No doubt the politicians in the democratic crime syndicate are being bribed to do so. Screw the taxpayers. Remember, they always know better and if you disagree, you're (take your pick) 1) a terrorist; 2) a hater, 3) unprogressive, 4) a denier, 5) against greening the economy.

mick_richfield's picture

This is the wonderful thing about American states -- the filtering effect of being able to move from one to another.  The Californians who were smart enough to see what their state was becoming started leaving long ago, knowing that they would be outvoted for the rest of their lives otherwise.

They wouldn't think of it this way, but when they say "Fuck it, I'm going to Texas / Colorado / Wyoming"  -- they're really "going Galt" - at least with respect to the People's Republic of  California.

The ability of Americans to emigrate internally to significantly different political / fiscal / business environments makes every state gradually -- more so.  More of whatever it started out being.

California started out always lucky, sometimes hard-working, wishful, romantic, and stupid.  At this point they're just stupid. 

They will end up as cannibals.

 

mjk0259's picture

Same thing will happen in the other states since none of them are allowed to enforce laws against illegal immigration.

 

AssFire's picture

Most public transportation systems are unacceptable due to the people that travel on them.

Whereas when normally extending their range a dark blight follows; in this case linking the ends of the central valley is more like connecting a siphon from the bottom of one septic system to the bottom of another.

What cheap exoduses will be facilitated from Fresno 16% unemployment to 12% Bakersfield unemployment? Not until this is linked to San Francisco and LA will the flow to better benefits be realized (and the city services overrun).

Let the skums enter like Lennin at the Finland station; shit let them ride on Reardon Steel! Nothin like mobilizing armies of unemployed- soon San Francisco and LA will learn.

Hope they extend the line to Sacramento. Moving Unemployed To Sacramento (M.U.T.S. line)

DeadFred's picture

If you've ever been to Madero you'd know Fresno is an upgrade. Plus Fresno is one of the nation's largest cities. Still you're right about it being nowhere.

A Nanny Moose's picture

Fresno. Not the end of the world, but you can see it from there.

1100-TACTICAL-12's picture

Any camps along the said railine ?