Californiastan?

I haven’t poked fun at California lately, but how can I pass this up?

Bloomberg and Reuters now reports that the cost of credit insurance on California debt is now higher than that of such rock solid, fiscally sure places as … Kazakhstan, Lebanon, and Uruguay.

Ouch!

All the media attention being focused on the mess the Greeks have made of their economy, and it is an enormous mess, misses the point. The Greek economy is small compared with California’s. Very small. A Greek debt default would not shatter the world economy, but a California implosion could. Remember: California is the world’s eighth largest economy, and its $20 billion a year deficit is destroying its ability to raise cash to meet its obligations. Actually that’s not quite accurate: what is hurting most is the fact that the state seemingly has no intention of fixing its problems, or ability to to get its political gridlock settled so responsibility can be placed squarely on anyone. Calofornia has become the poster child for the way in which hard and fast constitutional limits can scupper sensible or responsive politics. The people voted for the series of disasters that have led to California’s slide, so they have to shoulder the blame.

As for Greece: I learned today that Greek bureaucrats get not twelve monthly paychecks, but fourteen. They get an extra monthly check twice a year. Plus the Greek retirement age is 61 – way below the EU average. No wonder the place has a budget crisis. It’s laughable.

But for California credit risk to be more expensive than Kazakhstan … that’s just insane.