What may have been lost in all the bank earnings headlines this week was some very significant financial news out of California.
You may know that if California was it's own separate country, it would represent the 10th largest stand alone economy in the world. (Right after Italy).
So it was extremely positive news when the Golden state sold $6.85 billion in bonds Wednesday, including $5.23 billion in federally subsidized "Build America Bonds."
California officials reported that the debt sale was expanded from original plans of about $3 billion. The proceeds will be used immediately to restart projects, including highway upgrades, levee repairs, hospitals, libraries, natural habitat restoration and parks. All these projects were halted in December with the state treasury facing a $42 billion budget deficit.
Build America Bonds were designed to help state and local governments finance capital projects at lower interest rates. As you can see from the list of projects above, the bond sales will immediately and significantly benefit job opportunity creation in the state.
Other states have also quickly followed suit. The New Jersey Turnpike Authority just sold $1.38 billion of bonds for turnpike projects. The University of Virginia raised $250 million. And New York’s Metropolitan Transit Authority today raised $750 million for transportation improvements.
Credit is flowing again. It is no longer debatable. As cash infusions jump-start these and other shovel ready projects, the result will be more job options nationwide.
When all you read is gloom, turn here for a much different perspective.