Posted on 10/12/2009 10:45:57 AM PDT by Ernest_at_the_Beach
California's budget debacle holds a lesson for America, but one we will probably ignore. It's easy to attribute the state's protracted budget stalemate, now temporarily resolved with about $26 billion of spending cuts and accounting gimmicks, to the deep recession and California's peculiar politics. Up to a point, that's true. Representing an eighth of the U.S. economy, California has been harder hit than most states. Unemployment, now 11.6 percent (national average: 9.5 percent), could top 13 percent in 2010, says economist Eduardo Martinez of Moody's Economy.com. Meanwhile, the requirement that any tax increase muster a two-thirds vote in the legislature promotes paralysis. Democrats prefer tax hikes to spending cuts, and Republicans can block higher taxes.
All this produced the recent drama: plunging tax revenue and the state's resulting huge budget deficits; endless negotiations between Gov. Arnold Schwarzenegger and legislative leaders; the deadlock that led the state to issue scrip (in effect, IOUs) to pay bills; and a final agreement on a 2009-10 budget. But there is also a bigger story with national implications. California has reached a tipping point. Its government made more promises than its economy can easily support. For years, state leaders papered over the contradiction with loans and modest changes. By overwhelming these expedients, the recession triggered an inevitable reckoning.
Here's the national lesson. There's a collision between high and rising demands for government services and the capacity of the economy to produce the income and tax revenue to pay for those demands. That's true of California, where poor immigrants and their children have increased pressures for more government services. It's also true of the nation, where an aging population raises Social Security and Medicare spending.
(Excerpt) Read more at newsweek.com ...
Elect moderates and finish the state off already.
Yup....California taxes companies and the working stiff and gives it away to the immigrants and those that won’t work. Either our government learned from California or the reverse.
Interesting listing of cost-cutting measures.
But, there’s something wrong with my computer...nowhere could I find the term “illegal aliens” in the article.
I’m calling IT now to fix the problem.
Sarc switch now being turned to “off”
1 billion below expectations already.
Could it be capital and the eeevil wealthy are fleeing the state and taking their tax dollars with them? (I will soon be with them, once I know I can sell my home)
So, naturally the legislature wants to increase taxes even more to entice those people and businesses back. That works, right?
liberal thinking...
ROFLMAO!....
California is no longer the bellweather for the U.S. I love California but those guys out there have got to get over themselves.
Big government reigns supreme in California.
Actually this is from Newsweek...I messed up the source...link works ok...asking for a correction.
California’s problems have been around for decades and mostly can be attributed to the fact that the state legislature has been completely monopolized by tax and spend liberals. They’ve never met a tax they didn’t like and only cloud the issue by using the euphemism of “fees” to excuse their spendthrift ways. Then adding insult to injury, they also pile on the insane government regulations that every single business, large and small, must meet or pay outrageous penalties for even as these businesses are leaving the state for more lucrative states. These are the same problems that face other states such as Michigan, Illinois and New Jersey just to name a few. California is not an exception because of these policies and the American people are getting angrier by the day over these job killing morons and idiots in state and federal government.
Did Newsweek get one right?
NO...I think the essence of the editorial is that itis the Bellweather...think what the big Healthcare reform will do for us....prime example of wishful thinking.
This is happening worldwide. It’s like a total breakdown of human math comprehension.
A lot of the powers that be here are Northeasterners and products of illegals giving birth here.
It is still a beautiful state but it may well take a ‘Big One’ to reset the game out here. It’s really sad that Moonbeam , a forerunner of the green movement, is now leading future Gubinor polls and he hasn’t been announced.
My gut feeel is he may well not run , fully realizing how sad a shape the state is in and how precariously it is perched on the edge of an abyss that will swallow what is left of the state’s busisesses.
The failure here and across America, is the lessons of history, common sense and economics 101. What we have too much of is corrupt political behavior, illegal activities and ignorance. Now ask the question of how this is fixed? Everyone knows the answer, yet, because of political expediency the status quo will be maintained as long as the politically corrupt, illegal and ignorant have someone else pay costs, the system will continue to exist as a parasite.
A little truthful editing here:
“That’s true of California, where illegals and their children have increased pressures for more government services as soon as they come into California illegally.”
You got that right. If the State cut back on business taxes and personal taxes, people would flock to the state. But nooooooooo, they can’t seem to figure that one out.
Indeed, ROLF. It don’t get much better then that.
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