California: 50 Days Away From Financial "Meltdown"

[Unspeaked]

LINK (http://www.reuters.com/article/topNews/idUSTRE55974820090611)

California nears financial "meltdown" as revenues tumble

By Jim Christie

SAN FRANCISCO (Reuters) - California's government risks a financial "meltdown" within 50 days in light of its weakening May revenues unless Governor Arnold Schwarzenegger and lawmakers quickly plug a $24.3 billion budget gap, the state's controller said on Wednesday.

Underscoring the severity of California's cash crisis, Controller John Chiang, who has previously warned the state's government risks running out of cash without a budget deal, said revenues in May fell by $1.14 billon, or 17.7 percent, from a year earlier.

Additionally, the revenues of the government of the most populous U.S. state fell short of estimates in Schwarzenegger's budget plan by $827 million, Chiang said.

He warned California's state government is speeding toward a financial disaster unless officials act urgently to balance its books.

"Without immediate solutions from the governor and legislature, we are less than 50 days away from a meltdown of state government," Chiang said in a statement.

California's revenues have been on a dramatic slide as a result of recession, rising unemployment and its lengthy housing downturn.

The state's revenues from personal income taxes tumbled by 39.3 percent in May from a year earlier while revenues from corporate taxes fell by 52.1 percent and revenues from sales taxes sagged by 7.6 percent, according to a report released by Chiang's office.

"A truly balanced budget is the only responsible way out of the worst cash crisis since the Great Depression," Chiang, a Democrat, said.

[leekohler]

Let it meltdown. Perhaps they'll finally get to work on fixing it.

[Mr. Giver '94]

Let it meltdown. Perhaps they'll finally get to work on fixing it.

Gee thanks... :p


I do agree though. Ignoring the problems have only made them worse.

[Unspeaked]

Let it meltdown. Perhaps they'll finally get to work on fixing it.

Unfortunately, it's an eight of the total US economy.

It would arguably have a larger impact than any of the corporations that have been saved would have made by going under.

No doubt more money will be thrown at CA in the form of a bail-out.

[Considering the only other options are 1. massive budget cuts (unlikely) and 2. a miracle (equally unlikely).]

[nick9191]

As long as Apple's okay. Symantec can die though.

[iGary]

Let it meltdown. Perhaps they'll finally get to work on fixing it.

So you're OK with no police and fire?

[leekohler]

Gee thanks... :p


I do agree though. Ignoring the problems have only made them worse.

I'm sorry. We can't bailout everything and everyone. We shouldn't have done what we've done already. It's going to turn into a never-ending cycle. It already has.

So you're OK with no police and fire?

What are we going to do, iGary? Bailout every business and state until the cows come home? I'm beginning to wonder, quite honestly. I mean, come on guys! How much more are we going to put on the National Credit Card? If we keep doing it, sooner or later, it's not going to matter about California. The whole country will be bankrupt.

[fivepoint]

So you're OK with no police and fire?

I think there are probably a few better things to cut than police and fire departments!



I'm sorry. We can't bailout everything and everyone. We shouldn't have done what we've done already. It's going to turn into a never-ending cycle.

What are we going to do, iGary? Bailout every business and state until the cows come home?

I COMPLETELY agree. Scary, eh Lee?


In all seriousness, perhaps some Californians would be interested in giving an opinion on what caused this meltdown, and why California is so worse off than most other states?

Could it have to do with the incredibly high tax rates for businesses causing them to leave California hand over fist in recent years? Could it be the general philosophy of big government tax and spend as much as possible?

Texas for example, has much lower corporate tax rates, has been adding thousands upon thousands of new businesses in the past 2 years, and is sitting on a decent sized budget surplus.

I think it's important here to find the SOURCE of the problem. Very interested in some opinions from people who actually live there.


Either way, I'll be the first to wish all Californians luck. Here's hoping they can do what's necessary to get through this and learn from their mistakes and misfortune. Lets just hope BO doesn't decide to bail them out too!

[Cursor]

I'm sorry. We can't bailout everything and everyone. We shouldn't have done what we've done already. It's going to turn into a never-ending cycle. It already has.



What are we going to do, iGary? Bailout every business and state until the cows come home? I'm beginning to wonder, quite honestly. I mean, come on guys! How much more are we going to put on the National Credit Card? If we keep doing it, sooner or later, it's not going to matter about California. The whole country will be bankrupt.

I vote for let California go bankrupt. I think it is the only way to rebuild on a more stable platform.

I fear we are already over the abyss. We are currently playing an expert con game by trying to sell our treasuries and bonds to our creditor nations, and convince them that we are "good for it". The only way to repay our debt is too inflate our money, and that would be disastrous for 95% of the country.

[rdowns]

The legislature needs to grow some balls and raise taxes. California voters have done this to themselves.

Of course, they'll do nothing and wait for the federal bailout.

[iGary]

I'm sorry. We can't bailout everything and everyone. We shouldn't have done what we've done already. It's going to turn into a never-ending cycle. It already has.



What are we going to do, iGary? Bailout every business and state until the cows come home? I'm beginning to wonder, quite honestly. I mean, come on guys! How much more are we going to put on the National Credit Card? If we keep doing it, sooner or later, it's not going to matter about California. The whole country will be bankrupt.

You didn't answer my question.

[benthewraith]

The legislature needs to grow some balls and raise taxes. California voters have done this to themselves.

Of course, they'll do nothing and wait for the federal bailout.

Which would drive more businesses from the state, continuing the downward spiral California is in right now and. It's not going to generate new long term revenue, it will only cause more companies to move to states with rather lax tax laws.

[Ugg]

q
I think it's important here to find the SOURCE of the problem. Very interested in some opinions from people who actually live there.


1. The initiative process. Proposition 13 is responsible for much of today's problems because businesses have gotten a free ride for almost 30 years.

2. California went from almost nothing pre WWII to a major player in defense, agriculture, entertainment and technology. There really hasn't been a major adjustment. This is it.

3. The 2/3 majority needed to created new taxes means the taxes that are created are nightmares. It also means that right wing whackos have been hijacking the budget process. Ironically, the majority of the Republicans in office are from the poorest areas of California. Whatever happens in the next month will disproportionately affect the poor. I think we'll finally see an end to the Republican party in much of the poor areas of the state.

[maflynn]

I'm not from that state but from what I can gather, california has a ton of social programs that no one wants to cut even though revenue has tanked. The citizens voted down a massive tax increase so they're left with no alternative.

[Cursor]

The legislature needs to grow some balls and raise taxes. California voters have done this to themselves.

Of course, they'll do nothing and wait for the federal bailout.

Seriously? Aren't taxes in California some of the highest in the US? How about cutting programs for all of the illegal immigrants!

I think if they raise taxes any more, even after voters angrily voiced a NO opinion, and they'll have open war in the streets!

[Rodimus Prime]

CA is an example of what will happen to the US goverment if at some point they do not get their act in gear and reduce spending. Bring spending more in line with income.

I still get jaw drop at how much in the hole CA is when you compared it to TX which by TX state constitution it can not run a budget deficit. Guess what even in this economice down turn the state is not even going to have to pull on its rainy day fund to cover its cost. That means for yet another year the state of TX revenue is greater than it expensive.

Things do need to change maybe god forbid required to not run a budget deficit would work wonders.

It looks like CA is going to learn there is no such thing as a free lunch.

[mactastic]

I think it's important here to find the SOURCE of the problem. Very interested in some opinions from people who actually live there.
The SOURCE of the problem is the ridiculous ballot initiative process whereby citizens are able to vote themselves increases in spending at the same time they vote restrictions on revenue. Prop 13 needs to be revised to exempt corporate properties, for starters. The tyranny of the minority needs to be abolished in the legislature such that the state can raise the revenue stream when they need to. We need serious prison reform -- some hideously high percentage of the budget goes to keep non-violent offenders locked up thanks to our tough-on-crime "three-strikes" policy.

Above all, we need a legislature that makes these decisions rather than leaving them up to a popular vote. As I've said many times before, the one ballot initiative I'd like to see more than any other is one that reads "The ballot initiative process is hereby eliminated; and all previous initiatives are declared null and void." It's time to stop letting every monied special interest group have their way with our initiative process.

For anyone who's been paying attention, Ahnold took office after declaring his predecessor inept for not being able to fix the budget problems. He's had more than 6 years now to do something, and guess what? Same problems still exist, only worse. The problem isn't leadership, it's systemic. Without addressing the systemic problems noted above, no one will solve this state's problems.

Oh, and I keep hearing all these stories about the rich fleeing California for lower tax locales, but I've yet to see any evidence that it is true. Seems to be just a right-wing talking point. They keep saying the rich will "go Galt" on us, but it just doesn't happen. Too much about California that keeps people here far beyond taxes. I mean hell... who wants to go live in Texas when you can live in paradise? :confused: :p

[iGary]

Seriously? Aren't taxes in California some of the highest in the US? How about cutting programs for all of the illegal immigrants!

Not completely true. (http://articles.latimes.com/2009/feb/02/local/me-cap2)

[mactastic]

Seriously? Aren't taxes in California some of the highest in the US? How about cutting programs for all of the illegal immigrants!
What programs for all of the illegal immigrants are you talking about? Can you name some? :confused:

I think if they raise taxes any more, even after voters angrily voiced a NO opinion, and they'll have open war in the streets!
Best interpretation of the recent vote I've seen is that the extremely small minority who bothered voting weren't necessarily opposed to the taxes proposed, but rather that the legislature and governor attempted to foist the decision onto the voters rather than taking action themselves.

[Cursor]

What programs for all of the illegal immigrants are you talking about? Can you name some? :confused:


Best interpretation of the recent vote I've seen is that the extremely small minority who bothered voting weren't necessarily opposed to the taxes proposed, but rather that the legislature and governor attempted to foist the decision onto the voters rather than taking action themselves.

I was thinking about healthcare, schooling, prison space/programs/food actually. Although, I did read iGary's article and stand somewhat corrected. I still don't think people living illegally in this country should be eligible for entitlements though, at any cost.

With all of the people losing housing and jobs in CA, I just don't think raising taxes is the answer. The people who get hurt most from higher taxes is the middle class, and they can't be stretched anymore than they are.

[mactastic]

I was thinking about healthcare, schooling, prison space/programs/food actually. Although, I did read iGary's article and stand somewhat corrected. I still don't think people living illegally in this country should be eligible for entitlements though, at any cost.

With all of the people losing housing and jobs in CA, I just don't think raising taxes is the answer. The people who get hurt most from higher taxes is the middle class, and they can't be stretched anymore than they are.
Another one of the problems with California's tax structure is that because of Prop 13 restricting what the government can take in from property taxes, they have come to rely much more heavily on income and sales taxes -- which are notably subject to swings in the economy. People become unemployed and/or stop buying more, and the state takes a much more dramatic hit in revenue stream than if there were a higher burden on property tax and less on income and sales taxes. Because this doesn't happen in other states to the degree it does here, it makes it easy to target California's "wasteful" politicians; when the culprit really is the conservative anti-tax movement forcing the state to rely on more volatile sources of revenue.

[jjahshik32]

You have to let it fail because if the government bails them out it'll come out of citizen's pockets for the irresponsible spending that californians did.

They live way beyond their means. You have to let the banks, credit card companies, businesses that are not competent enough to fail so the people who saved could step in and take over.

This also needs to apply to the United States as well. But nope we all hate recession even though its natural and actually good for the economy because it lets bad companies fail and incompetent people fall replaced by competent people that cleans up the economy. Thats what a true capitalistic economy is but were no more. We let the government step up to prop up bad companies.

Now the Feds are bailing out major corrupt corporations because they are their friends and propping up the ponzi schemes.

[iGary]

You have to let it fail because if the government bails them out it'll come out of citizen's pockets for the irresponsible spending that californians did.

They live way beyond their means. You have to let the banks, credit card companies, businesses that are not competent enough to fail so the people who saved could step in and take over. This also needs to apply to the United States as well. But nope we all hate recession even though its natural and actually good for the economy because it lets bad companies fail and incompetent people fall replaced by competent people that cleans up the economy.

Now the Feds are bailing out major corrupt corporations because they are their friends and propping up the ponzi schemes.

Is ponzi scheme the new Libertarian catchword for eveyrthing? :D :confused:

[jjahshik32]

Is ponzi scheme the new Libertarian catchword for eveyrthing? :D :confused:

No its just the system that the corrupted companies really use.

The banking system is a ponzi scheme as well. Its a joke how we do our banking in this country.

Credit driven economy + service economy = Massive debt + eventual collapse. Most people cant understand you have to live below your means and save instead of relying on credit cards and buying everything you want now and pay it off slowly later with interest rates is idiotic.

You can bet your arses that VAT tax is coming very soon to the United States as a last resort to try softening the insanely high inflation blow that awaits us.

[MacNut]

I don't understand how a state that has the biggest movie studios and stars in the world can't pay their share. How many billions of revenue comes out of Hollywood?

[kitki83]

I am an angelino and I have to say .... people deserved it. The system that was created is straight out stupid. I give credit to the governor for being blunt with things but honestly some people in Sacramento need to stop catering to their ideologies.

We need a website that tracks every decision made by each politician so people know what they did or didn't do.

[.Andy]

We need a website that tracks every decision made by each politician so people know what they did or didn't do.
http://www.usa.gov/

[jjahshik32]

I am an angelino and I have to say .... people deserved it. The system that was created is straight out stupid. I give credit to the governor for being blunt with things but honestly some people in Sacramento need to stop catering to their ideologies.

We need a website that tracks every decision made by each politician so people know what they did or didn't do.

Oh dont think only Sacramento and parts of San Francisco will go down. Its all of california. Its only the beginning of bankruptcy and soon every part of the economy in California will dry out effecting every city.

I think California is going to be the first example of what is going to happen to the United States. Soon gangs will flood around the cities, crimes go up, unemployment goes up every month to insane percentages. Many people already left California and especially the wealthy people.

[jjahshik32]

I don't understand how a state that has the biggest movie studios and stars in the world can't pay their share. How many billions of revenue comes out of Hollywood?

The big corporations run hollywood. They pocket the money and pay small money to the actors/actresses and the economy barely sees the revenues.

What do you think all these huge bonuses and tax exemption is all about on the wealthy?

[benthewraith]

The big corporations run hollywood. They pocket the money and pay small money to the actors/actresses and the economy barely sees the revenues.

What do you think all these huge bonuses and tax exemption is all about on the wealthy?

Its not just them. All major corporations do it. Take for instance the RIAA lawsuits. The artists who create the material and should have ownership of the material don't clearly don't, as the proceeds go to funding other lawsuits against others. Artists don't get paid nearly as much as they make with their albums, and the majority of their money comes from live concerts.

[jjahshik32]

Its not just them. All major corporations do it. Take for instance the RIAA lawsuits. The artists who create the material and should have ownership of the material don't clearly don't, as the proceeds go to funding other lawsuits against others. Artists don't get paid nearly as much as they make with their albums, and the majority of their money comes from live concerts.

A-men brother. People need to wake the *uck up. The government is robbing us in broad daylight.

Soon you'll see VAT taxes, carbon tax which includes almost everything! Protect yourselves with precious metals because silver and gold is REAL money. Paper dollar bills will become worthless very soon.

I know some older people who's been through a collapsing of their currency from their countries and they cant believe its happening to them again. Some of them already left the United States going back to their countries and they tell me some scary stories. They also say that its so familiar on the early stages in the United States before hyperinflation hits.

The ironic part is that 40-50 years ago they had to bribe officers for them to leave their country to run off to the United States with gold. Now their going back. They never thought they'd see the day.

When people lose everything and they have nothing else to lose, they lose it.

[Cursor]

That is my favorite Gerald Celente quote! Anyway, I was hearing a couple of things from various news outlets about California possibly legalizing marijuana (not just medical, but all mj) for tax purposes, and also possibly splitting into 2-3 separate states. Any truth to either of those?

[jjahshik32]

That is my favorite Gerald Celente quote! Anyway, I was hearing a couple of things from various news outlets about California possibly legalizing marijuana (not just medical, but all mj) for tax purposes, and also possibly splitting into 2-3 separate states. Any truth to either of those?


Lol, I love that quote as well, it has so much truth to it. I got my food, water, guns and ammo, do you? LOL. I'm not going to let the government/police come to my crime scene after I get robbed, I'm going to stop it before it happens. ;)

Yes there are talks about it but most people think it will never happen. I know there is a trial recently about a medical marijuana user is going on trial or will be sentenced I think today or sometime soon because he grew his own marijuana and faces at least 5 years in jail.

But most people think it wont pass. The government/Feds are not going to allow it.

If it does pass imagine how many people moving to california lol. They'll become the california dream once again, perhaps exponentially more so.

[jjahshik32]

sorry double post

[CalBoy]

I don't understand how a state that has the biggest movie studios and stars in the world can't pay their share. How many billions of revenue comes out of Hollywood?

Well we do pay (as a state) 20% more to the Federal government than we get back, and with the size of our economy, that just about comes to most of the budget shortfall we're currently experiencing.


In all seriousness, perhaps some Californians would be interested in giving an opinion on what caused this meltdown, and why California is so worse off than most other states?

I, and several other posters, have already explained this before and you've posted this drivel about high taxes and business flight several times. Either respond to our points about the referendum process or stop posting this nonsensical theory of yours. An insistance on being a broken record is, for all intents and purposes, trolling.

The legislature needs to grow some balls and raise taxes. California voters have done this to themselves.

Problem is they can't. It takes 2/3 of the legislature to increase taxes (yes, our constitution is that wonderful; it takes only 50%+1 to remove equal protection, but 2/3 to raise taxes and pass a budget :rolleyes:) and a lot of tax sources are off limits because dozens of previous propositions limit their use. Dozens of other propositions also prevent cutting programs, so the legislature really has very little to work with.

Of course, they'll do nothing and wait for the federal bailout.

Does Fiat have enough money left? :p

Guess what even in this economice down turn the state is not even going to have to pull on its rainy day fund to cover its cost. That means for yet another year the state of TX revenue is greater than it expensive.

Texas also a source of economic output that requires little labor and can be readily taxed without much impact on the state's residents.


Things do need to change maybe god forbid required to not run a budget deficit would work wonders.

California does have that requirement; if it didn't, we wouldn't have a problem because the debt could just be bonded.

[mactastic]

I, and several other posters, have already explained this before and you've posted this drivel about high taxes and business flight several times. Either respond to our points about the referendum process or stop posting this nonsensical theory of yours. An insistance on being a broken record is, for all intents and purposes, trolling.

But... but... liberals... higher taxes... rich people fleeing... San Francisco values... Hollyweird... lather, rinse repeat...

[leekohler]

You didn't answer my question.

Of course I'm not OK with that. But here we go again. Is the fed also going to have to go in and fix California's government?

[Clive At Five]

So you're OK with no police and fire?

So CA's budget is composed entirely of police and fire?

There's *nothing* else in there that is less critical than basic services that could be cut? Really?

This is the typical game big government apologists try to play: pretend that every cent being spent by government is critical and without it, there will be mass chaos in the streets. Buildings will burst into flames and the Vercetti Gang will rule the town.

Everyone is struggling right now... people, businesses and government. The only way to get through it is to cut back on non-essentials. That includes government services. If gov't doesn't cut non-essentials, then the quality of all services - including the essentials - start suffering greatly.

It's time to start thinking efficiently, people. Shouldn't we be holding government to the same standard?

-Clive

[mactastic]

Of course I'm not OK with that. But here we go again. Is the fed also going to have to go in and fix California's government?
If the obstructionist "no tax at any time" conservative MINORITY would stop their "I'm taking a stand" BS and let the state raise revenue, we wouldn't need any help.

Everyone needs to step up to the plate to fix this mess. It's going to take higher taxes and spending cuts to make this work and not balance the budget on the backs of either to poor or the rich. Everyone needs to share the pain, and as it stands right now the minority party has the power to force the poor to bear all the burden.

Again, I can't overstate how stupid it is that it takes a 2/3 majority to raise a tax, but only a 50%+1 majority to strip away fundamental rights.

[jjahshik32]

Your going to see parts of California on sale to other countries. Property, land, etc..

Might as well just put California on www.eBay.cn.

[leekohler]

If the obstructionist "no tax at any time" conservative MINORITY would stop their "I'm taking a stand" BS and let the state raise revenue, we wouldn't need any help.

Everyone needs to step up to the plate to fix this mess. It's going to take higher taxes and spending cuts to make this work and not balance the budget on the backs of either to poor or the rich. Everyone needs to share the pain, and as it stands right now the minority party has the power to force the poor to bear all the burden.

Again, I can't overstate how stupid it is that it takes a 2/3 majority to raise a tax, but only a 50%+1 majority to strip away fundamental rights.

Ugh- that is so insane! WTF is wrong with people?

[chrmjenkins]

We all know the real problem. I moved here a year ago. It's clearly my fault.
Sorry.

[jjahshik32]

Its not only that but illegal immigrants are EVERYWHERE!

I wonder if most hollywood stars will eventually move out of California and go to either new york or something.

Or the rich areas will build huge gates around their community to keep all the gang bangers out.

[Eraserhead]

The federal government does need to step into California not with money but to take away their right to have these propositions.

This either needs to happen implicitly or explicitly, but its not going to be pretty either way.

[Gelfin]

The federal government does need to step into California not with money but to take away their right to have these propositions.

This either needs to happen implicitly or explicitly, but its not going to be pretty either way.

The initiative process needs to be gutted, but there is definitely no legal avenue by which the federal government could accomplish this.

In order to do so, one would have to prove to the satisfaction of a federal court that the California initiative process itself somehow violates the US Constitution. That is the only case in which a federal court could ever void part of a state's constitution.

We are in a very tough spot. Attacking the voter initiative process legislatively would be political suicide even if we didn't have a do-nothing legislature. If you know of a way to get the majority of Californians (or any other populace) to vote for a measure that takes away their power to vote themselves free beer, I would very much like to hear it.

I am very reluctantly resigned to the idea that a constitutional convention is the only remedy, but that comes with its own risks. If the current leadership were competent enough to re-draft our constitution, they'd be competent enough to fix the problem without a new constitution to begin with. So in a few years when you're booking vacation tickets to the Republic of Pepsi, State of Refreshment, I claim "told you so" rights.

[leekohler]

The initiative process needs to be gutted, but there is definitely no legal avenue by which the federal government could accomplish this.

In order to do so, one would have to prove to the satisfaction of a federal court that the California initiative process itself somehow violates the US Constitution. That is the only case in which a federal court could ever void part of a state's constitution.

We are in a very tough spot. Attacking the voter initiative process legislatively would be political suicide even if we didn't have a do-nothing legislature. If you know of a way to get the majority of Californians (or any other populace) to vote for a measure that takes away their power to vote themselves free beer, I would very much like to hear it.

I am very reluctantly resigned to the idea that a constitutional convention is the only remedy, but that comes with its own risks. If the current leadership were competent enough to re-draft our constitution, they'd be competent enough to fix the problem without a new constitution to begin with. So in a few years when you're booking vacation tickets to the Republic of Pepsi, State of Refreshment, I claim "told you so" rights.

If they aren't going to change it and fix what's wrong, they most certainly should expect no money from the rest of us. :mad:

[mactastic]

If they aren't going to change it and fix what's wrong, they most certainly should expect no money from the rest of us. :mad:
While I understand your frustration, Lee, you need to remember that California pays the feds more than they receive in federal tax receipts. Just letting us keep the same amount we send off for the good of the rest of the nation would solve our fiscal crisis.

I could just as easily say that the rest of you should expect no money from us.

[racers]

Its not only that but illegal immigrants are EVERYWHERE!



Yes its the immigrants fault :rolleyes:

without immigrants you would pay a lot more for stuff like groceries

[rdowns]

I could just as easily say that the rest of you should expect no money from us.

Easy there, Mac. I live in NY and we send about $40 billion more than we get in return. When you look at the charts, blue states are supporting the red states.So I guess you can say that Republicans are a bunch of welfare queens. :D

[jjahshik32]

Yes its the immigrants fault :rolleyes:

without immigrants you would pay a lot more for stuff like groceries

I dont blame the legal immigrants, I'm one of them!! I'm talking about illegal immigrants.

[racers]

I dont blame the legal immigrants, I'm one of them!! I'm talking about illegal immigrants.

Im not blaming anyone I was just saying that with sarcasm

[iGary]

So CA's budget is composed entirely of police and fire?

There's *nothing* else in there that is less critical than basic services that could be cut? Really?

I didn't say that. But if we have a total meltdown without helping them, those services will suffer. Everyone here is like "eff em."

[erickkoch]

Again, I can't overstate how stupid it is that it takes a 2/3 majority to raise a tax, but only a 50%+1 majority to strip away fundamental rights.

I'm beginning to agree with that (I was militantly opposed to tax increases at one time) but I fear our politicians going hog wild with new taxes and creative spending proposals if they can do it with 51% of the vote. There's got to be a way to make it a little easier to increase revenue but still limit spending?

I love CA I'm opposed to more bailouts. Maybe if we go broke it will be a warning to the Feds and states to do something about their debt and spending.

At least the weather's nice here.

[mactastic]

I'm beginning to agree with that (I was militantly opposed to tax increases at one time) but I fear our politicians going hog wild with new taxes and creative spending proposals if they can do it with 51% of the vote. There's got to be a way to make it a little easier to increase revenue but still limit spending?

I love CA I'm opposed to more bailouts. Maybe if we go broke it will be a warning to the Feds and states to do something about their debt and spending.

At least the weather's nice here.
I'd be happy to see some well-aimed spending cuts. We could save some serious coin by reforming our prison system, for starters.

But the way things are right now, costs are going up even if Republicans can say that they've resisted raising taxes. Municipalities are raising fees left and right since they can't raise taxes. They're gonna get their revenue one way or the other, whether it takes increased parking / moving violation fines, higher fees for public space usage, higher permit fees, higher vehicle licensing fees, etc. It's all good just so long as you don't call it a tax increase.

[Desertrat]

mac, you've commented before that it's fallacious to claim that well-to-do people are leaving California. I don't see it as any sort of "right wing talking point" when people from Oregon, Washington, Nevada and Idaho comment regularly about the influx of people from California who have driven up the cost of housing--and demand services such as they had "back there" but do not find in their new home. It's a fact that many business people from California have moved to Texas as well as other states. I've observed a large influx into Las Vegas, through the 1990s, and I hear various comments from friends along the I-25 corridor about ex-pat Californians.

"Flood"? "Only the rich"? No, not at all. But it is indeed a steady emigration of productive people, some of whom are indeed quite wealthy.

Philosophically and pragmatically, if one's income is constrained, one's spending should also be constrained. Californians as a group have not done that. Now the group is suffering from a financial crapstorm and finding little sympathy for the self-induced problem.

[mactastic]

mac, you've commented before that it's fallacious to claim that well-to-do people are leaving California. I don't see it as any sort of "right wing talking point" when people from Oregon, Washington, Nevada and Idaho comment regularly about the influx of people from California who have driven up the cost of housing--and demand services such as they had "back there" but do not find in their new home. It's a fact that many business people from California have moved to Texas as well as other states. I've observed a large influx into Las Vegas, through the 1990s, and I hear various comments from friends along the I-25 corridor about ex-pat Californians.
Sure, people have left. But not because of taxes, as was claimed.

"Flood"? "Only the rich"? No, not at all. But it is indeed a steady emigration of productive people, some of whom are indeed quite wealthy.
But again, not from taxes.

Philosophically and pragmatically, if one's income is constrained, one's spending should also be constrained. Californians as a group have not done that. Now the group is suffering from a financial crapstorm and finding little sympathy for the self-induced problem.
Again, you miss the mark. Not only is income constrained, but spending is constrained as well. In a sane world, both sides would give a little, and meet in the middle. Raise income some, cut expenses some. But the current tyrannical minority of the conservative party is refusing to allow anything other than complete capitulation from the other side of the aisle. They will simply not allow any increase in revenue to occur and demand that all balancing be done by spending cuts; and as I've noted previously, they have convinced Californians that relying on the volatile income and sales tax is better than the more stable property tax. TANSTAFL, right?

[leekohler]

While I understand your frustration, Lee, you need to remember that California pays the feds more than they receive in federal tax receipts. Just letting us keep the same amount we send off for the good of the rest of the nation would solve our fiscal crisis.

I could just as easily say that the rest of you should expect no money from us.

Mac- what's the point in throwing money at something broken that the state of California refuses to fix? I'm sorry, but that just doesn't make sense.

[mactastic]

Mac- what's the point in throwing money at something broken that the state of California refuses to fix? I'm sorry, but that just doesn't make sense.
If you've paid any attention to my posts, you'll notice I'm not arguing for federal bailout money. I'm saying the conservative anti-taxers need to put some skin in the game. Sitting around saying that everyone else needs to suffer while they give up nothing just isn't right.

[leekohler]

If you've paid any attention to my posts, you'll notice I'm not arguing for federal bailout money. I'm saying the conservative anti-taxers need to put some skin in the game. Sitting around saying that everyone else needs to suffer while they give up nothing just isn't right.

I agree with you. They've got 49 days left to do it.

[Shivetya]

Sure, people have left. But not because of taxes, as was claimed.


But again, not from taxes.


Again, you miss the mark. Not only is income constrained, but spending is constrained as well. In a sane world, both sides would give a little, and meet in the middle. Raise income some, cut expenses some. But the current tyrannical minority of the conservative party is refusing to allow anything other than complete capitulation from the other side of the aisle. They will simply not allow any increase in revenue to occur and demand that all balancing be done by spending cuts; and as I've noted previously, they have convinced Californians that relying on the volatile income and sales tax is better than the more stable property tax. TANSTAFL, right?

If not from taxes why did they leave? Why can papers find an endless supply of businesses and people who claim that is why they left?

Exactly why are these conservatives wrong? You cannot spend what you don't have! That is what is totally wrong with your type. When Bush was running deficits people on both sides were complaining, when the new boy on the block does it you guys shrug... just like you shrug when some state level liberals want to bust the the deficit wide open under the stupid and ignorant idea it will fix things.

Look, California brings in more than enough money to run a state. The problem is they spend more than they bring in because they waste it. Either by paying overly generous benefits and pay to state employees and their retirement programs to funding entitlement programs that should never have started.

Sorry, this minority that is stomping on your spending orgy is right. They tried it your way and have spent themselves into a ditch.

What is the magic number more they need to spend? I bet they can't tell you. You speak of give and take but all the state is doing is taking.

Californian's themselves stomped any chance of property tax settling the issue. See, the legislature can try and tax it differently but it will soon be on the ballot as a public initiative and stomp that too

[mactastic]

If not from taxes why did they leave? Why can papers find an endless supply of businesses and people who claim that is why they left?
Most everyone I know who left or contemplated leaving claimed that it was the high cost of housing that was driving them to seek other locales. But perhaps you can provide some of these "endless supply" of papers who claim it was because of taxes?

Exactly why are these conservatives wrong? You cannot spend what you don't have! That is what is totally wrong with your type. When Bush was running deficits people on both sides were complaining, when the new boy on the block does it you guys shrug... just like you shrug when some state level liberals want to bust the the deficit wide open under the stupid and ignorant idea it will fix things.
My type, eh? Nice generalization you've got going there. And you're lying when you say people on both sides complained with Bush ran a deficit. As I noted previously, RBCheney even said "deficits don't matter" to nary a peep from the right. So don't give me this ************ about both sides complaining.

Why are these conservatives wrong? Because a minority shouldn't be allowed to dictate to the majority, for one. And second, because they're they only group unwilling to compromise. Everyone else is taking spending cuts, and they refuse to consider a single penny in new revenue. Let's see them put some skin in the game.

Look, California brings in more than enough money to run a state. The problem is they spend more than they bring in because they waste it. Either by paying overly generous benefits and pay to state employees and their retirement programs to funding entitlement programs that should never have started.
Again, many of these programs are mandated via the same process that restricts revenue increases. Thus, when crunch time comes cuts can only be made in schools, mental health programs, state parks, etc. The programs that really need to be cut are untouchable because some special interest group got it on the ballot -- same way as the anti-tax crowd got their way.

Sorry, this minority that is stomping on your spending orgy is right. They tried it your way and have spent themselves into a ditch.
Perhaps you agree that the minority should also have their way with marriage equality? Would you have complained if a majority of the state voted to restrict marriage rights, but that wasn't enough?

Whether they are right or not (a matter of opinion), they haven't managed to convince a majority of Californians to vote them into office, and thus should not have the right to dictate things to the majority. Influence? Yes. Veto power? No.

What is the magic number more they need to spend? I bet they can't tell you. You speak of give and take but all the state is doing is taking.
The magic number is the one that balances the budget. And again, you're lying when you say all the state does is take. How do I know that? Because in nearly the same breath you complain about all the entitlements and other programs the state provides (AKA *giving*) to people.

I speak of give and take in the realm of budget negotiations. So far it's been all give from the spending cut side, and no give from the revenue side. Just a bunch of take.

Californian's themselves stomped any chance of property tax settling the issue. See, the legislature can try and tax it differently but it will soon be on the ballot as a public initiative and stomp that too
A perfect illustration of why the ballot initiative process is so flawed...

[Desertrat]

mac, wasn't it back around 1797 when the observation was made about Democracy being wonderful, until the public learned it could "vote itself largesse from the public coffers"? And don't politicians get votes by promising largesse? And is it all that unusual for people to want somebody else to provide the contents of those coffers?

Doesn't matter. The next three years are not going to see improvements.

http://www.bloomberg.com/apps/news?pid=20601213&sid=aQ_ZgC75Zfyw

"$750 Billion Problem

More than $750 billion of option ARMs were originated in the U.S. between 2004 and 2008, according to data from First American and Inside Mortgage Finance of Bethesda, Maryland. California accounted for 58 percent of option ARMs, according to a report by T2 Partners LLC, citing data from Amherst Securities and Loan Performance."

So that's $203 billion in more trouble from unemployment and reduced spending.

AltA mortgages amount to some $2.5 trillion, and they're no bed of roses, either. Then there is the misery in the $3.5 trillion commercial real estate market which is now underway. I don't know the percentages in California, but I'd imagine they're not trivial.

[mactastic]

mac, wasn't it back around 1797 when the observation was made about Democracy being wonderful, until the public learned it could "vote itself largesse from the public coffers"? And don't politicians get votes by promising largesse? And is it all that unusual for people to want somebody else to provide the contents of those coffers?
Are you claiming that this attitude is somehow unique to California? :confused:

[mgguy]

So far it's been all give from the spending cut side, and no give from the revenue side. Just a bunch of take.

Taxes have already been raised to help balance the budget. It's not as if all that has been done so far is to cut spending. When revenues were way up, spending on new programs went way up too. Now that revenues have come down, it seems only prudent to reduce spending on these programs. We can't always grow spending. The least we can do is cut down the rate of increase in spending, which I believe is what is being proposed by those advocating "cuts." Someone asks for a 10% increase in spending, they only get 5%, and then complain that their programs and services got cut by 5%. This is dreamland. Raising taxes will only encourage another round of increased long-term spending. Yeah, more entitlement programs!

[mactastic]

Taxes have already been raised to help balance the budget. It's not as if all that has been done so far is to cut spending. When revenues were way up, spending on new programs went way up too. Now that revenues have come down, it seems only prudent to reduce the spending on these programs. We can't always grow spending. The least we can do is cut down the rate of increase in spending, which I believe is really what is being proposed by those advocating cuts. Someone asks for a 10% increase in spending, they only 5%, and then complain that their programs and services got cut by 5%. This is dreamland. Raising taxes will only encourage another round of increased long-term spending. Yeah, more entitlement programs!
Yeah more tax cuts! That'll solve everything, just like it always has.

If you'll notice, I'm not advocating growing spending. We need to both cut spending and increase taxes just to meet the levels of spending mandated by the same voters who mandated lower taxes.

[mgguy]

Yeah more tax cuts! That'll solve everything, just like it always has.

If you'll notice, I'm not advocating growing spending. We need to both cut spending and increase taxes just to meet the levels of spending mandated by the same voters who mandated lower taxes.

Taxes have been raised and will not be cut, at least in this budget cycle. Fees, levies, etc. will be raised. Note too that local and state governments are continuing to re-label taxes as fees so they can say they didn't raise taxes.

[leekohler]

Taxes have been raised and will not be cut, at least in this budget cycle. Fees, levies, etc. will be raised. Note too that local and state governments are continuing to re-label taxes as fees so they can say they didn't raise taxes.

Could you and mac post some data for us? Maybe you already have, and I missed it. But this seems to be an easily resolved argument.

[mactastic]

Taxes have been raised and will not be cut, at least in this budget cycle. Fees, levies, etc. will be raised. Note too that local and state governments are continuing to re-label taxes as fees so they can say they didn't raise taxes.
Yep... raising fees and levys and fines is a favorite way of getting around the anti-tax crowd. I note that many people who won't support a tax increase for political reasons are more than happy to support a fee increase.

[Gelfin]

Yep... raising fees and levys and fines is a favorite way of getting around the anti-tax crowd. I note that many people who won't support a tax increase for political reasons are more than happy to support a fee increase.

It's easy to see why this is. If there is one attitude that most characterizes public financing debates in this country, on all sides, it's, "I'm not the problem. You're the problem." People want a state financial apparatus that confirms their own moral appraisal of some other vaguely defined and stereotyped social class.

Tax increases cut too evenly. They aren't punitive enough for the class warriors who really badly want the public finance machinery to hurt somebody else for their wickedness and reward them for their virtue.

Fees, on the other hand, are implicit punishments. Getting hit with a fee means you're bad. It means the state agrees you are part of the problem. People support fees because they believe they are on the side of the angels, and therefore presumably the fees will be applied to other people, awful people who deserve it.

A tax sounds like polite robbery. A fee sounds like justice.

[Shivetya]

Most everyone I know who left or contemplated leaving claimed that it was the high cost of housing that was driving them to seek other locales. But perhaps you can provide some of these "endless supply" of papers who claim it was because of taxes?

So in other words, you have nothing to back it but your imaginary people. You cannot point to articles, you could go surf for it but instead you attempt to place the onus on someone else to disprove your made up facts?


My type, eh? Nice generalization you've got going there. And you're lying when you say people on both sides complained with Bush ran a deficit. As I noted previously, RBCheney even said "deficits don't matter" to nary a peep from the right. So don't give me this ************ about both sides complaining.

I can find lots of example of right wingers who barked a lot about the deficits that were run during Bush's term (hell even Rush ranted on it). The key is that California is just like the US Government, spending money they don't have then railing against everyone calling them on it. LOL...


Why are these conservatives wrong? Because a minority shouldn't be allowed to dictate to the majority, for one. And second, because they're they only group unwilling to compromise. Everyone else is taking spending cuts, and they refuse to consider a single penny in new revenue. Let's see them put some skin in the game.

Hate to break it to you, your not a majority if you succumb to a minority. Why should they compromise their values? Just so you can spend yourself into a ditch?


Again, many of these programs are mandated via the same process that restricts revenue increases. Thus, when crunch time comes cuts can only be made in schools, mental health programs, state parks, etc. The programs that really need to be cut are untouchable because some special interest group got it on the ballot -- same way as the anti-tax crowd got their way.

Mandates made by government can be ended by government. Mandates are the *********** cop-out. Why is it when government is told to cut back they always go for stuff no one wants cut, like police, fire, and such? Simple because they know many people are stupid and easily incited into fear.


Perhaps you agree that the minority should also have their way with marriage equality? Would you have complained if a majority of the state voted to restrict marriage rights, but that wasn't enough?

ooh, hyperbole. Attempt to put me on the defensive with a lame attempt to discredit my position by giving me an indefensible one. LOL - lame 5th grade attempt. Whats next, I'll be at fault if you hold your breath and pass out?



The magic number is the one that balances the budget. And again, you're lying when you say all the state does is take. How do I know that? Because in nearly the same breath you complain about all the entitlements and other programs the state provides (AKA *giving*) to people.

I speak of give and take in the realm of budget negotiations. So far it's been all give from the spending cut side, and no give from the revenue side. Just a bunch of take.

There has too much taking. Thats the point. You can only take so much before there is none to give. They need to CUT CUT CUT CUT. They are not compromising if they don't give up their sacred cows.

California deserves its hell. It spent money it knew it didn't have and now the politicians need to be run out of town


A perfect illustration of why the ballot initiative process is so flawed...[/QUOTE]

[mactastic]

So in other words, you have nothing to back it but your imaginary people. You cannot point to articles, you could go surf for it but instead you attempt to place the onus on someone else to disprove your made up facts?
Umm... you've overwhelmed me with all the articles you posted (which you claimed were "endless", yes?)

So, IOW, you have nothing to back up your claims. Remember, it's not up to me to disprove your claims, it's up to *you* to prove them. You say high taxes are driving people from the state, and there is an endless supply of newspaper articles that say so? Let's see!

I can find lots of example of right wingers who barked a lot about the deficits that were run during Bush's term (hell even Rush ranted on it). The key is that California is just like the US Government, spending money they don't have then railing against everyone calling them on it. LOL...
And I can find lots of examples of left-wingers expressing concerns about Obama's deficits. Duh.

Hate to break it to you, your not a majority if you succumb to a minority. Why should they compromise their values? Just so you can spend yourself into a ditch?
Hate to break it to you, but you don't know what you're talking about. The LAW is that the minority rules. That's wrong, IMHO.

Mandates made by government can be ended by government. Mandates are the *********** cop-out. Why is it when government is told to cut back they always go for stuff no one wants cut, like police, fire, and such? Simple because they know many people are stupid and easily incited into fear.
Sigh... again with teh stoopid. Have you not been paying attention this whole time, or is your burning hatred of anything left-of-center so intense that facts just don't make it all the way into your cerebral cortex?

THESE MANDATES WERE NOT PUT IN PLACE BY GOVERNMENT AND THUS CANNOT BE ENDED BY GOVERNMENT!

I don't know how much plainer I can make it.

ooh, hyperbole. Attempt to put me on the defensive with a lame attempt to discredit my position by giving me an indefensible one. LOL - lame 5th grade attempt. Whats next, I'll be at fault if you hold your breath and pass out?
LOL... I notice you don't want to provide an answer to that one. That's OK, your non-answer tells me all I need to know!

There has too much taking. Thats the point. You can only take so much before there is none to give. They need to CUT CUT CUT CUT. They are not compromising if they don't give up their sacred cows.
Education, mental health care, public works projects... these ARE sacred cows. It's not compromising if you don't give up your sacred cows, but the conservatives won't move on taxes. Why should only the left have to compromise on their principles, particularly when they are the political majority?

California deserves its hell. It spent money it knew it didn't have and now the politicians need to be run out of town.
We'll be happy to take the additional federal funds we pay out every year. Propping up the rest of the nation (mostly red states BTW) who can't support themselves would fix our problems with no cuts or tax increases. Y'all deserve your hell, right? Spending money y'all don't have, and just expecting California and other productive states to support your poor decisions and all... :rolleyes:

[rhsgolfer33]

Why are these conservatives wrong? Because a minority shouldn't be allowed to dictate to the majority, for one. And second, because they're they only group unwilling to compromise. Everyone else is taking spending cuts, and they refuse to consider a single penny in new revenue. Let's see them put some skin in the game.

I suppose you'd be fine with having the amendment process to the US constitution be that a 50%+1 vote of both houses of congress could create an amendment then? And that you would be saying the same if republicans ran California's legislature, were advocating for only large spending cuts, and were opposed by a small number of democrats calling for new taxes?

I'm glad I'll be leaving next year, this state isn't as great as everyone seems to think it is. Our public school system, even in so called "good" areas, sucks, pay to cost of living is low, people can't drive, and the tax burden is relatively high. Thank god for large accounting firms that pay about the same in every state and have offices in most states and countries.

[Desertrat]

mac, of course I'm not saying it's unique to California. It's merely part of a common problem, but the thread's aboot California.

"(The conservatives) will simply not allow any increase in revenue to occur and demand that all balancing be done by spending cuts..."

If you know that's the situation, why, then, commit to more spending? If the boss won't give a pay raise, don't go commit to buying a fancier car with larger monthly payments.

Folks have been selling in California and moving to lower-cost areas for decades, commonly saying it was because of the high cost of living there, and including taxes in their griping. Sell a house in California, buy the equivalent house somewhere else, and pocket a bunch of money. I had that conversation quite often during business trips to Lost Wages, among other places.

In the 1970s, we saw a lot of this sort of thing in Texas. People moving from the northeast, buying as much or more house as what they'd had, and then having enough left over for a lake house.

[rhsgolfer33]

In the 1970s, we saw a lot of this sort of thing in Texas. People moving from the northeast, buying as much or more house as what they'd had, and then having enough left over for a lake house.

That is still going on. I'll probably leave here for Austin or San Antonio (at least until I have enough experience and a high enough salary to ask for a transfer to the income tax free Cayman Islands). Its easy to get a job there and I can afford to live in the trendier downtown areas close to work since instead of being a $1 million and up like they are here in Los Angeles, they are more like $250,000 and up. Or I can choose to live 20 minutes from work and buy a brand new 3000 square foot place for close to $250,000 (I can barely get a newer condo for that where I'm at right now, even with the downturn). Not to mention more expensive gas, groceries, insurance, and utilities that salaries don't make up for here in California.

[SactoGuy18]

I wouldn't be surprised that we could see a substantial shrinkage in the size of state government. If they can reduce the government spending to under US$90 billion/year we could finally end this crisis.

[mactastic]

I suppose you'd be fine with having the amendment process to the US constitution be that a 50%+1 vote of both houses of congress could create an amendment then? And that you would be saying the same if republicans ran California's legislature, were advocating for only large spending cuts, and were opposed by a small number of democrats calling for new taxes?
Whatever gave you that idea? I've been arguing the opposite this whole time.

If you know that's the situation, why, then, commit to more spending? If the boss won't give a pay raise, don't go commit to buying a fancier car with larger monthly payments.
Again, you're just not understanding where the problem is coming from. It's not coming from the government, it's coming from the people. If the boss won't give a pay raise? More like the workers voted themselves a pay raise -- and voted at the same time to lower revenue. And then told the boss to go eff himself, and figure out how to make it work.

Folks have been selling in California and moving to lower-cost areas for decades, commonly saying it was because of the high cost of living there, and including taxes in their griping. Sell a house in California, buy the equivalent house somewhere else, and pocket a bunch of money. I had that conversation quite often during business trips to Lost Wages, among other places.

In the 1970s, we saw a lot of this sort of thing in Texas. People moving from the northeast, buying as much or more house as what they'd had, and then having enough left over for a lake house.
But lets be clear here -- they're almost never leaving because of taxes, they're leaving because of the overall high cost of living. Last time I saw, the difference between "high tax" California and the national average was about 3% per $1000 earned. Figure you've got a moderately good income, say maybe $80,000 coming into your household. So your tax burden is some $2,400 higher here than it is in an average state. So $200/ month. But the median house price is $450,000 here, and the national average is less than half that. So instead of a $3,000 mortgage payment, you've only got a $1,500 mortgage payment. That's a $1,500 a month difference. People can tolerate a $200 hit to their pocketbook in order to live in paradise. They can't tolerate a $1,500 hit.

Do you see why I laugh when conservatives get all up in arms about how everyone is fleeing California because of the oppressive hand of government? Last I checked, government wasn't causing insanely high housing prices.

That is still going on. I'll probably leave here for Austin or San Antonio (at least until I have enough experience and a high enough salary to ask for a transfer to the income tax free Cayman Islands). Its easy to get a job there and I can afford to live in the trendier downtown areas close to work since instead of being a $1 million and up like they are here in Los Angeles, they are more like $250,000 and up. Or I can choose to live 20 minutes from work and buy a brand new 3000 square foot place for close to $250,000 (I can barely get a newer condo for that where I'm at right now, even with the downturn). Not to mention more expensive gas, groceries, insurance, and utilities that salaries don't make up for here in California.
Just to check... it's the cost of housing and other non-government costs that are your primary concern, right? I don't see "OMG my taxes are too high" on your list of reasons for leaving.

[rhsgolfer33]

Whatever gave you that idea? I've been arguing the opposite this whole time.

Just to check... it's the cost of housing and other non-government costs that are your primary concern, right? I don't see "OMG my taxes are too high" on your list of reasons for leaving.

Namely that you've been arguing a minority shouldn't be allowed to dictate a majority. Basically, from what I've gathered (and correct me if I misinterpreted or read what you have posted) you would like elimination of the 2/3 budget rule in California. I assume you'd feel the same way if the republicans were in command of the legislature.

My primary concern, yes, but taxes are part of my reason for leaving. Its certainly not the sole reason, but the tax burden in California is higher than many other states. My moves after that, especially as I near the partner or director level at a firm (provided I don't make the move to industry as a CFO or controller), will be motivated solely by taxes. If I can work in the Caymans you better believe I'll be there to avoid income tax.

[Saladinos]

I'm sorry. We can't bailout everything and everyone. We shouldn't have done what we've done already. It's going to turn into a never-ending cycle. It already has.

Completely disagree. Small government caused the problem.

Saying "we can't bail everyone out" is childish. What, so you're just going to let the state of california collapse? That's the preferred option? Irresponsible budgeting can only be fixed by taking responsible action (however distasteful) and paying for them to get out of it.

Weren't they considering legalising and taxing marihuana not too long ago? That'd probably work. I hope.

[rhsgolfer33]

Completely disagree. Small government caused the problem.

Saying "we can't bail everyone out" is childish. What, so you're just going to let the state of california collapse? That's the preferred option? Irresponsible budgeting can only be fixed by taking responsible action (however distasteful) and paying for them to get out of it.

Weren't they considering legalising and taxing marihuana not too long ago? That'd probably work. I hope.

The state won't collapse. Reasonable action has to be taken to solve the problem, you're right, but it certainly doesn't require a bailout from the federal government to solve. It can easily be solved by a mix of spending cuts and tax increases, what this entire thread is about. Lee is right, a bailout is entirely unnecessary. Iceland essentially went bankrupt late last year, it would be quite possible for California to do the same, though I'd be surprised if it happened.

[opinioncircle]

I'm sorry. We can't bailout everything and everyone. We shouldn't have done what we've done already. It's going to turn into a never-ending cycle. It already has.



What are we going to do, iGary? Bailout every business and state until the cows come home? I'm beginning to wonder, quite honestly. I mean, come on guys! How much more are we going to put on the National Credit Card? If we keep doing it, sooner or later, it's not going to matter about California. The whole country will be bankrupt.

I agree with you that you can't bailout everyone. However California is one of the most powerful states in the US, and could be a top 5 world power if they were their own country. That's just too tough for the Obama administration to let that go by without doing something.

What's more worrying IMHO, is that the first cuts that'll be done aren't massive contributions to various industries, but scholarships and public funds for hospitals, local businesses, and such....

[Desertrat]

"...the first cuts that'll be done aren't massive contributions to various industries..."

Massive contributions such as what? And with some approximation of the dollar amounts? Remember, we're talking about a shortfall around $24 billion.

Out of curiosity, what sort of contributions to "local businesses"?

'Rat

[ikermalli]

What are we going to do, iGary? Bailout every business and state until the cows come home?

Actually I'm on my cow right now, taking a stroll with my MacBook through the park with an internet stick.

ikermalli saves US once again!

[mactastic]

"...the first cuts that'll be done aren't massive contributions to various industries..."

Massive contributions such as what? And with some approximation of the dollar amounts? Remember, we're talking about a shortfall around $24 billion.

Out of curiosity, what sort of contributions to "local businesses"?

'Rat
Well, let's see... as I'm mentioned (and been ignored) before, prison reform alone would save some serious money. We spent some $7 billion on prison construction in one year alone recently, and that's above and beyond the $10 billion annual operating expense of the prison system itself.

If we reformed the system so we weren't throwing people in jail for life because they stole a package of donuts, and we weren't having to lock up non-violent drug offenders, allowing the terminally ill who are no threat to the public to die in a hospice or at home, etc., we wouldn't need to be building new facilities for one, and we could reduce the operating costs of the existing facilities while we're at it.

We could also see a $5 billion increase in revenue by simply assessing all commercial property at market value. A complete overhaul of the tax system has been put at a potential $17 billion increase in revenue.

We could also join the rest of the oil-producing states, and tax extractions at the wellhead. Leaving that money on the table for the oil companies to pocket is just ridiculous in light of these fiscal circumstances. That's another $1 billion or so a year.

Just a few suggestions, since you asked for numbers.