Schwarzenegger says California needs $500 billion to rebuild

Governor Schwarzenegger was quoted in a Reuters interview as saying that California needs $500 billion in bonds to rebuild:

“I was at a meeting this morning where someone said, ‘Look, we need $150 billion just for infrastructure and transportation.’ It’s true – We need $500 billion to rebuild California the way it ought to be,” he added. “But this is of course too big for people to digest, so you don’t talk about that.”

Speaking about the total of $42.7 billion in general obligation bonds authorized by voters last year for public works spending, Schwarzenegger said: “This was only the foot in the door, to whet the appetite.”

In the short term, Schwarzenegger acknowledged California could face lower tax revenues than projected in his January budget plan, but said he opposed new taxes. “We have done tremendously with the revenue increases, but we do not want to do a tax increase.”

He said he does not expect California to issue less debt if the economy slows. “I don’t think we have to do that,” he said.

The blog “Mish’s Global Economic Trend Analysis” called this “fiscal insanity” and calculated that it “translates to a staggering $22,176 liability for every working age person”. Mish concluded, “The kicker is that Schwarzenegger thinks this can be paid for without increasing taxes, in the face of falling revenues, even if the economy heads into a recession. Mark my words California, your taxes are going to skyrocket if anything remotely close to this proposal passes.”