should have been coining its own money, as is its Constitutional right, instead of relying on Federal Reserve notes. That money would be worth a lot of notes right now, as gold is booming as the notes bust.

But that's just crazy talk.

If we can let crooked bankers from New York to Timbuktu sell American taxpayers every piece of non-performing garbage securities at inflated prices why not give Ahnold a few billion too.

What a fucking joke America has become...

Rather than bail out the credit markets and then have to trust them not to do it again (scant hope of that), there's nothing stopping the federal government from simply replacing them by providing short term lending services. At a suitable profit. Call me socialist if you want but the "free market" has already proven that it can't be trusted.

Sure, this would cause inflation, but is it's either that or a depression, I'll take the inflation.

I agree with Bacchus (too bad he ain't Bacchus), time for a State Bank. You want stability in the banking system? Then establish a bank with United States citizens as its backup, not one with the 'market' as its backup, and the profit motive as its driving force. Then there would be no credit crisis, although perhaps every insane loan, like McDonalds getting latte equipment, might not get approved.

Oh, can't do that, everything has to appeal to the lowest common denominator in the House, the Republican caucus who still can't believe that laissez faire has bitten the dust. The bitter enders. The Bunker crew. The people living in the economic past. The ass-end of America. The representatives of small business entrepeunurship. The trodlydytes. Call them what you will, our country is held hostage once again - by Paulson and economic conservatives.

California sales tax is just this side of 8%, which begs the question, what happens when people stop spending? I noted when Arnie took office, that the bond refi was based on this source of revenue, and that it was not a dependable source. (The terms of those bonds allows the state to dip into the general fund if they can't make the payments) Now many cities and counties have added their own sales tax bonds on top of the states. There is no easy way to unwind all this debt in a consumer led recession.

Populist Republicans have never been laissez faire about monetary creation... that's in the constitution, after all. It's Congress's job.

But they still don't know how it works. This is the important point: almost nobody in this semi-democratic society knows how we create money within this society. And because fractional reserve banking is so misunderstood, they don't realize that for the markets to be freed it needs to be slapped down hard.

People, the vast majority of people, still think the government lends money to banks. Tell them it's the other way around and they give you a strange look. "Well where do the banks get the money, then?" Easy, they create credit and we all have to pretend it's money.

And while the people lack understanding, the bankers then get to make out like kings. More or less literally.

No small-government free-market conservative approves of fractional-reserve banking... it can only exist through heavy government regulation, after all. But when well-meaning small-government conservatives who don't understand fractional-reserve lending try to peel back regulation on it...

Boom.

$84 billion. That's how much California would get if the $700 billion bailout was distributed on a per capita basis to the states rather than to Wall Street investment banks.

From there the state could inject liquidity into the California banks (favoring credit unions), and that could keep California businesses solvent. Combine that with a tax break program linked to renewable energy-based job creation programs, and the state would do quite well.

Instead, we get a sell-out/rip-off/bail-out that benefits Saudi and Kuwaiti and Israeli investors in U.S. securities, as well as our homegrown aristocrats like Buffet & Gates, far more than it benefits the average citizen, who it will actually hurt.

This is one of the points in U.S. history where state's rights should overrule federal control - especially given the obvious and blatant corruption that now rules much of Congress and all of the White House.

The bailout will not ease the U.S. economic crisis - instead, it will just encourage more reckless behavior on the part of overpaid finance CEOs and their even greedier shareholders. The whole thing is an effort to cushion the wealthiest of the wealthy from the coming economic shocks, so that all of the weight falls on middle class homeowners and pensioners.

Citizens might want to consider sending their next IRS check to their state government, instead of to the federal government. Legally, you will have paid your taxes, and the state will take your money - just send the receipt to the federal government, with a little note attached:

"No Taxation Without Representation!"

You are aware that there literally isn't enough gold refined in the whole world to replace the paper money in Californias economy, right?

Then that should tell you something about the debt-based currency we currently use, shouldn't it?

California runs out of money because it can't borrow for a week? I didn't realize it was that close to the edge. No wonder nobody wants to loan them money. Aren't revenue anticipation bonds the governmental equivalent to a payday loan? California is going bankrupt because nobody will give it a payday loan anymore. I guess that what comes from the Democrats running the legislature for decades.

Did the banks ever come clean about just how much worthless/overvalued paper they're holding..?

It doesn't tell me or anybody else who's been paying attention anything we all didn't already know. I know our current paper money has no intrinsic value. But you've got to have a medium of exchange in a complex society and precious metals haven't been viable as a meduim of exchange for about 40 years now. That's why there isn't one single gold back currency left in the whole world and never will be again. Look ahead, not back.