California: 50 Days Away From Financial "Meltdown"

Discussion in 'Politics, Religion, Social Issues' started by Unspeaked, Jun 11, 2009.

  1. Unspeaked macrumors 68020

    Unspeaked

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    #1
    LINK

     
  2. leekohler macrumors G5

    leekohler

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    #2
    Let it meltdown. Perhaps they'll finally get to work on fixing it.
     
  3. Mr. Giver '94 macrumors 68000

    Mr. Giver '94

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    #3
    Gee thanks... :p


    I do agree though. Ignoring the problems have only made them worse.
     
  4. Unspeaked thread starter macrumors 68020

    Unspeaked

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    #4
    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).]
     
  5. nick9191 macrumors 68040

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    #5
    As long as Apple's okay. Symantec can die though.
     
  6. iGary Guest

    iGary

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    #6
    So you're OK with no police and fire?
     
  7. leekohler macrumors G5

    leekohler

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    #7
    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.
     
  8. fivepoint macrumors 65816

    fivepoint

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    #8
    I think there are probably a few better things to cut than police and fire departments!



    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!
     
  9. Cursor macrumors 6502

    Cursor

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    #9
    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.
     
  10. rdowns macrumors Penryn

    rdowns

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    #10
    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.
     
  11. iGary Guest

    iGary

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    #11
    You didn't answer my question.
     
  12. benthewraith macrumors 68040

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    #12
    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.
     
  13. Ugg macrumors 68000

    Ugg

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    #13
    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.
     
  14. maflynn Moderator

    maflynn

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    #14
    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.
     
  15. Cursor macrumors 6502

    Cursor

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    #15
    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!
     
  16. Rodimus Prime macrumors G4

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    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.
     
  17. mactastic macrumors 68040

    mactastic

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    #17
    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
     
  18. iGary Guest

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    #18
    Not completely true.
     
  19. mactastic macrumors 68040

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    #19
    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.
     
  20. Cursor macrumors 6502

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    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.
     
  21. mactastic macrumors 68040

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    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.
     
  22. jjahshik32 macrumors 603

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    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.
     
  23. iGary Guest

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    #23
    Is ponzi scheme the new Libertarian catchword for eveyrthing? :D :confused:
     
  24. jjahshik32 macrumors 603

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    #24
    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.
     
  25. MacNut macrumors Core

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    #25
    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?
     

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