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Prepare for Demise of California; Liberals Will Get All the Government (and Tax Hikes) They Want ^ | November 11, 2012 | Mike Shedlock

Posted on 11/11/2012 8:27:52 AM PST by Kaslin

On Tuesday voters in California went the wrong way on three propositions.

  1. Voters approved Proposition 30 "temporarily" increasing the state sales tax and income tax on individuals making over $250,000.
  2. They voted against Proposition 31 that would allow the governor to cut the budget in fiscal emergencies.
  3. They voted against Proposition 32 would prevent unions from making campaign donations via members' dues.

Moreover, and worse yet, Democrats picked up two more votes in the state legislature giving them a supermajority, capable of passing any tax hikes they want.

Those results are so awful I suggest you prepare for the demise of California.

Indeed California's Liberal Supermajority is about to run the state into the ground and taxpayers are going to get all the government they ever wanted.
The main check on Sacramento excess has been a constitutional amendment requiring a two-thirds majority of both houses to raise taxes. Although Republicans have been in the minority for four decades, they could impose a modicum of spending restraint by blocking tax increases. If Democratic leads stick in two races where ballots are still being counted, liberals will pick up enough seats to secure a supermajority. Governor Jerry Brown then will be the only chaperone for the Liberals Gone Wild video that is Sacramento.

The high Democratic turnout in moderate and right-leaning districts helped the party pick up three seats in the senate and four in the assembly.

So now Californians will experience the joys of one-party, union-run progressive governance. Mr. Brown is urging lawmakers to demonstrate frugality and the "prudence of Joseph." As he said the other day, "we've got to make sure over the next few years that we pay our bills, we invest in the right programs, but we don't go on any spending binges." That's what all Governors say. Trouble is, merely paying the state's delinquent bills will require tens of billions in additional revenues if lawmakers don't undertake fiscal reforms.

With no GOP restraint, liberals can now raise taxes to pay for all this. [$200 billion in unfunded liabilities, the California State Teachers' Retirement System in need of $10 billion annually for the next 30 years to amortize its debt, $73 billion in outstanding bonds for capital projects and $33 billion in voter-authorized bonds, etc.]

They'll probably start by repealing Proposition 13's tax cap for commercial property. Democrats in the Assembly held hearings on the idea this spring. Then they'll try to make it easier for cities to raise taxes.

The greens want an oil severance tax. Other Democrats want to extend the sales tax to services, supposedly in return for a lower rate, but don't expect any "reform" to be revenue neutral. Look for huge union pay raises and higher pension benefits.

The silver lining here is that Americans will be able to see the modern liberal-union state in all its raw ambition. The Sacramento political class thinks it can tax and regulate the private economy endlessly without consequence. As a political experiment it all should be instructive, and at least Californians can still escape to Nevada or Idaho.

Law of the Funnel in Action

Big government and absurdly strong unions destroyed Greece and Spain. Expect no less for California.

Many large California corporations that can flee, will flee. Those stuck in California will see massive tax hikes (with many more to come) just so public unions and administrators can collect absurdly high salaries and benefits that most citizens can only dream about.

Please see the Law of the Funnel for a description as to what just happened.

Economists Cut US GDP Forecast, Raise Inflation Forecast

Here is a headline news story that I found interesting for reasons I will explain following: Economists cut U.S. Q4 growth forecasts.

Economists expect the economy to grow at an annual rate of 1.8 percent in the current quarter, down from the previous estimate of 2.2 percent growth, according to the Philadelphia Federal Reserve's fourth-quarter survey of 39 forecasters.

While that left estimates for gross domestic product for the year unchanged at 2.2 percent, growth in 2013 looked modestly weaker with economists forecasting 2 percent, down from 2.1 percent.

Over the next three quarters, growth was seen averaging 2.1 percent, down from earlier expectations of 2.2 percent.

The unemployment rate was forecast to come in lower than expected, averaging 7.9 percent in the fourth quarter from the previous estimate of 8.1 percent. The monthly unemployment rate released by the government was 7.9 percent in October.

Still, unemployment was seen stuck at 7.9 percent in the first quarter of next year, and holding at 7.8 percent in the second and third quarters.

Economists raised their forecasts for inflation this quarter with the headline consumer price index seen averaging 2.3 percent, up from earlier estimates for 2.0 percent. For the year, CPI was expected to average 1.9 percent, up from 1.8 percent.
Given exports were recently revised up and imports revised lowered, I expected economists to think GDP would come in higher. It would have been interesting to see their reasons. Hurricane Sandy perhaps?

I expect the economy to weaken of course (and by far more in 2013 than the economists). Curiously the economists do not seem worried about the alleged fiscal cliff, at least for their GDP estimates.

For more on the fiscal cliff, please see "Saturation Point" for QE Nonsense; Fiscal Cliff Comparisons

TOPICS: Business/Economy; Culture/Society; Editorial; US: California
KEYWORDS: bluestates; ca2012; california; supermajority; taxandspend
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To: Kaslin

It is truely amazing to witness the morons of California. Rich poor and even bums all chant the same mantra of the brain washed left. The Mexicans just giggle at the stupidity of gringos. These idiots just passed a retroactive sales tax. Twenty five cents on the dollar is owed by any business that sold goods. So pretty soon the goods will be drying up.

21 posted on 11/11/2012 8:59:44 AM PST by jetson
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To: vette6387

Why does everybody think things will get better after a collapse? We will still have the same cast of characters all with their hands out. The unions will still control the politicians and the permanent underclass will still be the voting majority. We will just become a pemanent third world state.

22 posted on 11/11/2012 8:59:51 AM PST by umgud (No Rats, No Rino's)
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To: Kaslin

DumBO’s reelection will pave the way, that, any tax hikes in California will be paid by the rest of the country, in particular, those without a state income tax.

23 posted on 11/11/2012 9:00:29 AM PST by depressed in 06 (America conceived in liberty, dies in slavery.)
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To: Kaslin

I tell my students that I can run any business in America as long as I can borrow money. I’m going to tell them that I can also run any level of government as long as I can borrow money. California got a reprieve by having Obama be re-elected. Obama’s not going to let California go down the tubes. They vote Democrat. Obama will find a way to use federal money to bail California out. Jerry Brown is one happy man.

24 posted on 11/11/2012 9:00:48 AM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: Le Chien Rouge

Why is California so Leftist? I submit that it is so Leftist, because people who didn’t like where it was headed, simply picked up sticks and moved out.

Now we advocate more of the same?

Folks, if you want our nation to be sound, then encourage the right sorts of people to move back into the state, vote the Marxists out, and reclaim it for the United States we love.

California has a population of around 38 million. We are losing elections by less than 10% of that. If we had 3.5 million more Conservatives in the state, guess what, we win every election.

The 55 electoral votes go the the Republican candidate every time. The state legislature turns back to the right. The governor will be a Republican.

Are folks aware that 16 states now have a Democrat majority. Read the threads here that talk about it.

We have to find a way to turn these states around. We can’t just move out of them and surrender them to the Left. That is a loser’s strategy, and given thought, I think most of us would agree.

25 posted on 11/11/2012 9:01:23 AM PST by DoughtyOne (Hurricane Sandy..., a week later and 47 million Americans still didn't have power.)
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To: all the best

“...see who they will blame.”

Reagan? He was a Calif governor in the 60’s (and conveniently dead and unable to defend his record).

26 posted on 11/11/2012 9:02:16 AM PST by nonsporting
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To: Bikkuri

Democrats never apologize for anything. Ever.

27 posted on 11/11/2012 9:02:31 AM PST by onedoug
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To: vladimir998
the "prudence of Joseph."

Was it prudent to give the go ahead to a bullet train from nowhere to nowhere?

How could anyone vote for Prop 30 after that aerodynamic polished turd was signed into law?

28 posted on 11/11/2012 9:04:39 AM PST by who_would_fardels_bear
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To: DoughtyOne
Los Angeles just passed a law requiring all porn stars to use condoms.

If that entire industry moves out of the state then the vote might swing a bit more to the right.

However, Jenna Jameson did say she was voting for Romney. So maybe even that prediction is overly optimistic.

29 posted on 11/11/2012 9:07:16 AM PST by who_would_fardels_bear
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To: Kaslin

When California becomes a complete hellhole Mexico can have it back

30 posted on 11/11/2012 9:07:23 AM PST by mjp ((pro-{God, reality, reason, egoism, individualism, natural rights, limited government, capitalism}))
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To: Kaslin

I have previously commented on Calif Prop 13 and the attack beginning on commercial property. For those who don’t know, property tax in CA is set at the time of purchase at 1% plus local taxes that make it about 1.2-1.3% of purchase price. That is locked in and can only increase 2% of the total per year. A $300,000 purchase will have first year tax of about $3750. It can go up $75 the next year.

I knew that when they had a super majority, the RATS would attack Prop 13, which they have despised and targeted since its passage in 1978. The first area, as the article indicates is commercial property. The RATS think they can go after commercial property owners first because they will pose less opposition at this time than homeowners. But that will be coming.

In college I taught real estate law and economics. You do not have to have such background, however, to know what is going to happen when a commercial property owner gets a tax increase. Of course, that increase is passed onto the tenant. And, of course, that increased business cost is passed onto consumers. We pay more for goods. Well, poor people, get ready for that.

31 posted on 11/11/2012 9:08:25 AM PST by doug from upland (Obama and the leftists - destroying our country one day at a time)
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To: Mr Rogers
Californians fleeing California, please: Go to Texas. You can stop in Arizona long enough to get fuel and a bite to eat. If desperate, you can spend the night. Do NOT stay here for over 24 hours. We don't want you.

32 posted on 11/11/2012 9:09:26 AM PST by Vince Ferrer
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To: DoughtyOne

Well, at least I’m commuting twixt here and South long as the money and the airline structure holds out.

33 posted on 11/11/2012 9:11:49 AM PST by onedoug
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To: tophat9000
What happen when you run out of rich people?

More tax on the middle class. Soon they will be forced to cut off the poor and freeloaders. Happy times, California.

34 posted on 11/11/2012 9:13:30 AM PST by Logical me
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To: DoughtyOne
"encourage the right sorts of people to move back into the state"

Libertarians, who are a much more unified group than conservatives or Republicans, tried to get a significant percentage of their numbers to move to one state in order to improve their chances to elect candidates to their liking.

They should have chosen a state like North Dakota, but instead settled on the fairly attractive state of New Hampshire, i.e. on the coast, no income taxes, good jobs in Massachusetts, etc.

To date, however, very few have moved to the state and it has drifted further to the left and away from its motto of "Live Free or Die".

It's a nice thought having conservatives move to California, but it ain't gonna happen.

Free State Project

35 posted on 11/11/2012 9:14:22 AM PST by who_would_fardels_bear
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To: blueunicorn6
I wouldn't be so sure of that.

California isn't a "swing state," so Democrats in Washington can pretty much take it for granted. If you are a state and you really want to grab a lot of Federal dollars, you should do one or both of the following: (1) make sure your popular vote in presidential elections is never more lopsided than 52%-48% one way or another, and (2) make sure you elect one Democratic and one Republican U.S. Senator. That's how the game is played, folks.

36 posted on 11/11/2012 9:14:32 AM PST by Alberta's Child ("I am the master of my fate ... I am the captain of my soul.")
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To: Kaslin

The California/Michigan experiment.

Two states starting in the same place and going in opposite directions. It should be very interesting to see which does better.

37 posted on 11/11/2012 9:16:11 AM PST by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: Alberta's Child

That’s because Californians aren’t just stupid, we’re downright stoopid!

38 posted on 11/11/2012 9:16:50 AM PST by who_would_fardels_bear
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To: Kaslin
Here in San Diego, always thought of as a conservative city, We got Bob Filner as mayor (Filner as in "I am a congressman and can do what ever I want and you can't do anything about it). I wondered why we had a big acorn voter registration in 2008, I guess I know now. The demonrats are like the Al-Qaeda and make plans to be used later.
39 posted on 11/11/2012 9:17:56 AM PST by Foolsgold (L I B Lacking in Brains)
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To: who_would_fardels_bear

Oh, you’ll never have to convince me of that. I really daily reports from the shipping industry about what goes on all over North America, and I find myself shaking my head at some of the idiocy I see at the Ports of Los Angeles and Long Beach. With all of the added costs and regulations in place out there, they wonder why more and more shippers are doing business with other ports instead.

40 posted on 11/11/2012 9:23:02 AM PST by Alberta's Child ("I am the master of my fate ... I am the captain of my soul.")
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