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I have the same question. Why not aggressively pay of the existing debt and reduce borrowing, when the sate has enough money in general budget. > The independe
by YeBanKo 5y ago
I have the same question. Why not aggressively pay of the existing debt and reduce borrowing, when the sate has enough money in general budget.
> The independent Legislative Analyst’s Office estimates that the total debt may not be paid off until 2031.
Negative consequences on the timeline are so far from the decision making point, that it will be hard to attribute one to another.
- redis_mlc 5y agoNote that California has serious structural issues: - water infrastructure projects have stalled for decades. Only around half of them were completed, all in the last century - public pensions are pegged at 8% annual returns, so that's a bottomless pit - homelessness is exploding, as even people with jobs can't afford to rent an apartment. The above will cost trillions. Also, high earners and other productive workers are leaving California in droves. Leftists have threatened to create an asset tax which follows residents even to other states, so some are migrating in advance - it's a real sword of Damocles.
- naturalauction 5y ago>I have the same question. Why not aggressively pay of the existing debt and reduce borrowing, when the sate has enough money in general budget. I don’t know about this specific case but it can make sense for a state to borrow if their rate of return is greater than the interest rate on debt. With capital being so cheap right now this is likely true (unless they are pumping it into their high speed rail). Similar idea to people investing in their retirement instead of paying off their mortgage.