Lining up...

Once the federal spigot is open, everybody is going to line up to get theirs...

California may need a $7 billion emergency loan from the federal government to pay for "teachers' salaries, nursing homes, law enforcement and every other state-funded service" this month, Gov. Arnold Schwarzenegger warns. California is running short on cash, he warns in a letter sent to Treasury Secretary Henry Paulson. State Treasurer Bill Lockyer issued a statement a day earlier saying because of the national financial crisis, California "has been locked out of credit markets for the past 10 days." "Absent a clear resolution to this financial crisis that restores confidence and liquidity to the credit markets, California and other states may be unable to obtain the necessary level of financing to maintain government operations and may be forced to turn to the federal Treasury for short-term financing," Schwarzenegger wrote. The governor warned that a number of states are facing the same cash flow crunch this month, but that his state is "so large that our short-term cash flow needs exceed the entire budget of some states." Schwarzenegger said his state would attempt to sell "$7 billion in Revenue Anticipation Notes for short-term cash flow purposes in a matter of days." Lockyer said that unless the national economic crisis subsides and California can secure private short-term loans "the state's cash reserves would be exhausted near the end of October. Payments for teachers' salaries, nursing homes, law enforcement and every other state-funded service would stop or be significantly delayed," Lockyer said. "And California's 5,000 cities, counties, school districts and special districts would face the same fate."