Why California Leads the Nation in Deficit, Debt and Out-Migration

brucefan · Jan 13, 2009

The California Nightmare: Why California Leads the Nation in Deficit, Debt and Out-Migration
Tuesday, January 13, 2009, 08:52 AM

The latest reports are out- and there's good news and bad news for California. The good news is that California leads the nation. The bad news is that California leads the nation in deficit, debt and the amount of residents escaping to other states. The Mamas and Papas are rolling over in their graves. The California Dreamin' of the 1960's has morphed into the California Nightmare.
My new book ?The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gambling & Tax Cuts? is about the fact that liberal fiscal policies, government expansion, government employee unions, and government over-spending have all combined to bankrupt America. Examining the economic crisis occurring at this moment in America's largest state proves the point of my new book beyond a shadow of a doubt. ?The People's Republic of California? experiment is Exhibit A that liberal ?tax and spend? fiscal policy is a terrible failure. It is an experiment gone bad. VERY bad.
California is the perfect test tube baby- the state is arguably the most liberal, big spending, big government state in the entire United States of America. After decades of spending like there was no limit to taxpayers' money, California is mired in a deep economic crisis- poised to turn into economic Armageddon. The reality is that the state of California is bankrupt. Actually the state is far beyond bankrupt- what do you call ?so bankrupt, there is no amount of money available anywhere in the world to pay off our debts?? California is so bankrupt that bankruptcy attorneys have no words to describe the depths of this disaster. Let's just call it ?Bankruptcy squared.?

This is a lesson for the rest of America about what happens when you spend too much and tax too much. How much has California spent? The state has an expected budget deficit of at least $41.8 billion over the next two years. That's a bigger deficit than any state EVER. That's a bigger deficit than most countries. Yet since Governor Arnold Schwarzenegger's election in 2003, spending has increased by a staggering 40%. The actual dollar increase was $41 billion, to a total of $144.8 billion annually under the Governator. That's called ?whistling past the graveyard.?

Here are the facts, plain and simple:
*California leads the country in spending on government employees.
*California spends twice as much as the national average on education (with dismal results).
*California spends almost $200 million per year on free college educations for illegal immigrants (no that's not a typo).
*California has the most draconian anti-business rules and regulations in the nation. That forces businesses to spend too much. The result is that California is the most costly place in America to do business (according to the Milken Institute's business cost index).
*California is heaven for trial lawyers and hell for small businesses. That could be why so many major employers have left the state (according to Investor's Business Daily).
*California has the second highest income tax rates in all of America. And it is among the nation's leaders in virtually every tax category possible- income taxes, business taxes, sales taxes, property taxes, taxes on real estate transactions, taxes on stock transactions, capital gains taxes, workers compensation taxes, the list is endless.

The results:
*Over the next 18 months, California is facing (according to the Governor) a budget deficit of over $40 billion dollars- and that may prove to be conservative.
*California is reduced to begging the federal government for a bailout. There is no other solution on the table. But one year after a federal bailout, the state would undoubtedly be $20 billion (or more) in debt again.
*California has been given the lowest bond ratings of any state in America (soon no one will dare to loan a penny to California). That little problem costs California's taxpayers millions of wasted dollars per year in increased interest costs.
*In the 1970's California led the nation in job growth. Since 2000, California's job growth is 20% lower than the nation. But it's not just any jobs that California is losing. According to the California Manufacturers and Technology Association, the state has lost 440,000 high-wage jobs.
*California's unemployment rate is now the 3rd highest in the nation.
*In the 1970's California was among the nation's leaders in population growth. Last year, over 144,000 more people left California than moved in. That led the nation. This was the 4th straight year of out-migration. Why is that important? As more and more high-income and high-net worth individuals move out, homes will drop in value, small businesses will fail (as they lose customers), and taxes will rise on the remaining citizens (to replace the taxes no longer paid by those who have escaped).

Do you get the picture? The proof is in the pudding- big government spending leads to economic disaster. When your state (or country) is run by government employee unions; teachers unions; trial lawyer unions (The Bar Association); auto unions (who demand billion dollar bailouts from politicians they supported); lobbyists; and special interests; the result is financial Armageddon. California is Exhibit A.
Governor Arnold Schwarzenegger should stand by a Washington D.C. freeway exit with a sign that says, ?Broke. Need $40 BB handout. Will NOT work for food. We will spend it as soon as you give it to us- plus 20%. See you tomorrow.?
There is no way out for California, short of bankruptcy. The problem of course is California Dreamin. What I mean by that is that Californians live in a liberal, bleeding-heart, utopian dream world. It sounds like a nice thing to pay government employees huge salaries and pensions, as well as lifetime health benefits (as much as 60% higher than similar jobs in the private sector). It sounds nice to mandate a ?living minimum wage.? It sounds nice to enforce tough rules and regulations on business. It sounds nice to offer generous welfare benefits to the poor. It sounds nice to spend lots of money on the homeless. It sounds nice to let anyone sue his or her employer for virtually anything. It sounds nice to make it virtually impossible for business owners to fire an employee. It sounds nice to mandate fines for whatever government thinks is beneficial for society (recycling, carbon taxes, greenhouse gases). It sounds nice to spend more money on education "to benefit the children." It sounds nice to offer free breakfast and lunch (as well as courses taught in Spanish) to poor students at public schools- even if they're here illegally. It sounds nice to pay for the college education of illegal immigrants. It sounds nice to defend animal rights. It sounds nice to ban offshore oil drilling. All of that sounds like ?the right thing to do.? But in the real world, with real consequences, it is a dramatic failure.

The lesson here is that ?nice? may sound nice in theory. It might work out well in some kind of utopian dream state. But in the real world ?nice? doesn't pay the bills. ?Nice? doesn't pay a budget in the real world. All the liberal do-gooding in the world only leads to one thing: the bankruptcy of your state and a massive exodus of taxpayers. Nice has turned the California Dream into a Nightmare.

Is this a problem (as liberal ?tax and spend? politicians claim) of too little taxation in California? Not with the second highest income tax rates in the country. California even imposes an additional ?millionaires? tax surcharge on the highest incomes. The result is that the wealthy pay huge taxes in California. The top 1% of the California population pays 50% of the income taxes. The top 14% of taxpayers (those earning $100,000 or more) paid 83% of the income taxes in California (the latest 2005 figures). Could there be a connection between these numbers and the mass exodus of productive people (like me) out of the state? I escaped to Nevada a decade ago for these very same reasons. The California Nightmare of big government, big taxes and big spending drove me away. My loss has cost California dearly- in the way of millions of dollars of lost tax revenues to the state. But in the real world that's what happens when you choose to treat the people who create the jobs and pay the taxes badly- they choose to leave. The result: California gets none of my money.
The California economic model proves once and for all that taxes are not too low. The out-of- control deficit in California has nothing to do with taxes. California has a spending addiction. It just doesn't matter what the tax rates are. Whatever tax revenues flow into government coiffeurs, the spendthrift politicians and bureaucrats in California find a way to spend it all- and then some. The actual total is irrelevant. Give them $1.00, and California politicians will spend $1.50. But raise taxes and give them $2.00 (thereby bankrupting small businesses and forcing them to flee your state) and they'll spend $3.00. There's always some ?worthy? new government program to spend it all on. When you give billions of dollars of tax revenues to a government bureaucrat looking to keep a job for life, or a career politician looking to keep his or her job for life, they will find a way to spend it all- plus 20%.

How do we stop the insanity? Let's start with state and federal employees. No sane state can justify paying government employees compensation packages 40% to 60% higher than the private sector. Have you ever been to the DMV? Is government run efficiently for all that money? Is it run effectively for all those big salaries given to public service employees? In many cases, government employs people who couldn't get a job in the private sector. Do they deserve compensation 60% higher than you or me? On what grounds? Do they deserve to retire at age 55, while you and I work till the day we die, to pay all the taxes necessary for their huge pensions and unlimited health benefits?

Education is another place to start. ?Spending more for the children? is one heck of a sound bite, yet what it sounds like and what it means are completely different things. A raise in ?education spending? has little or NOTHING to do with spending more money on our children, or improving their economic opportunities in the future. It merely means spending more money on the education bureaucracy. It means hiring thousands of new bureaucrats (administrators) who will never pick up a book, grade an exam, or teach a course. Raising teacher salaries to far above the national average doesn't help the kids (just look at California for the proof). It does however increase union dues for the teachers union. It does fund more bureaucrats. It does bloat the population of the teacher's union- thereby giving it more clout and more reliable votes (in order to vote themselves more raises and pension increases).
Giving teachers tenure, so that under-performing teachers can never be fired- doesn't help the kids either. Giving teachers bigger pensions and allowing them to retire at age 55 to enjoy a pension for LIFE doesn't help the children one iota. But if that teacher lives to age 85, collecting a big pension for 30 years, it is guaranteed to overwhelm California's taxpayers and bankrupt the state budget. In many cases, government employees are retiring young enough to be paid a pension for more years than they worked. Perhaps now you understand why California is mired in deficit and debt.

It all sounds ?nice? and seems like ?the right thing to do.? In reality it's a one-way street leading to deficit, debt, and eventually bankruptcy. There just aren't enough taxpayers, nor is there enough money in any state or country, to allow people to retire at age 55 and collect pensions for 25 to 30 years (or more). The numbers just don't add up- unless you expect the rest of us to pay 70% or 80% tax rates until the day we die to pay for this ?privileged class? of federal and state employees. And even that might not be enough.

Allowing trial lawyers to run wild sounds great for California consumers, patients, and of course the ?victims? of abuse by big business- until you realize a few facts of life. First, if you raise taxes on business, the result will be a mass exodus by big business, small business and professionals (like doctors). They will flee your state by the tens of thousands- thereby reducing the tax base and requiring more tax increases for those who are left. Second, most jobs and tax revenues are created by thousands of small business owners- not by big business. Small business is hurt far more by high taxes and workers compensation rates. Third, business (even big business) isn't all bad- the reality is that business pays the bills for all these bloated government programs and government employee pensions. Chase business away and there's no one to pay the bills. Government (and all the people living off government) desperately needs business to be successful and satisfied, or government ceases to exist.

Fighting on behalf of the rights of ?defenseless animals? sounds like the right thing to do- until new laws requiring more humane treatment of chickens (just approved by the voters of California in the 2008 election) force the entire egg industry to leave your state. That reduces tax revenues by millions of dollars- once again increasing the deficit and debt of California.

Radical environmentalism sounds nice too. Saving the beaches by banning offshore drilling; making it virtually impossible for new oil refineries to open within your state borders; and mandating draconian new greenhouse gas rules that will add billions of dollars to bills paid by business and consumers; all sounds great, until it you get your latest utility bill?until you see the bill as you fill up at the pump?until you realize every product you buy at the store now costs more?until you realize that these government mandates result in more energy dependence on foreign nations that support terrorism. The result is that Californians are treated to the highest energy costs in all of America- 35% higher than the national average.

This reliance on big government, big unions, big taxes and special interests is a toxic brew that has poisoned the future of California, its citizens, its taxpayers, and future generations. The California Dream has turned into a toxic nightmare.

Now it's coming to a city, county or state nearest you. Instead of running from Armageddon, we're embracing it. We're electing more big government proponents (Obama and his friends); creating more bureaucracy (more agencies with hundreds of thousands of employees like Homeland Security); more draconian government rules and regulations (in the name of global warming); more government involvement in our everyday lives (universal healthcare); more foreign aid, foreign entanglements and wars across the globe; more powerful unions (our bailouts of the ?Big 3? automakers will prop up bloated auto union contracts); more corporate welfare (by handing taxpayer money to wealthy companies through trillion dollar bailouts); more government ?economic stimulus? packages; and certainly higher energy costs for consumers.

In reality the best way to stimulate the economy is not for government to spend more, while the citizens must cut more from their budgets. It is not for government to increase budgets and hire more employees, while the private sector cuts budgets and lays off employees. It is not for government to choose winners and losers- by giving away the taxpayer's money through bailouts, corporate welfare, or stimulus giveaways. It is not for the government to impose new mandates and higher taxes in the name of global warming that force businesses out of business.
The best way to stimulate the economy is simple: dramatically cut the taxes of those who earn the money and create the jobs. There's no middleman (government) needed. Let people keep more of the money they already earn. Now that's the most powerful economic stimulus plan in the world. Give taxpayers and job creators like me a vacation for the next year from income taxes and watch the economy rebound. Watch real estate prices rise again. Watch the stock market soar. Watch credit and capital markets start to lend again. Watch jobs increase. Give taxpayers and job creators dramatically and permanently reduced taxes, so we can keep more of our own money, and get ready for the greatest economic expansion in history.

President Ronald Reagan already proved it works. But he made the mistake of allowing government spending to increase wildly out-of-control, at the same time as he dramatically cut tax rates. That was a big mistake. Now combine the Reagan tax cut model with a dramatic cut in the size, scope and spending of government, and watch the economy go and grow. But that would be far too simple. Too much common sense confuses politicians. Either that, or my plan ruins their plans to get re-elected by spending more and giving away taxpayer's money to special interest groups and entitlement addicts.
We're headed in the wrong direction. Instead of running away from the train wreck of California's economic model, we are embracing it. With Obama as President, now all of America can turn into one big California with crushing debt; dramatic job losses; out-migration; failing schools; failing businesses; higher energy costs; higher business costs; bigger legal bills; and a drastically poorer quality of life. California Dreamin' has turned into our national obsession?and our national nightmare.

Wayne Allyn Root was the 2008 Libertarian Vice Presidential candidate. His new book, ?The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gambling & Tax Cuts? will be released in May 2009 by publisher John Wiley & Sons. For more of Wayne's political views, commentaries and to watch his many media appearances on FOX News Channel, please visit his web site at: www.ROOTforAmerica.com

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brucefan · Jan 14, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

I knew this thread would not get any attention, Liberals cant ever deal in facts when it comes to Economics

California Residents leaving in DROVES before the STATE GOES BANKRUPT!

By MICHAEL R. BLOOD, Associated Press Writer

LOS ANGELES ? Mike Reilly spent his lifetime chasing the California dream. This year he's going to look for it in Colorado.

With a house purchase near Denver in the works, the 38-year-old engineering contractor plans to move his family 1,200 miles away from his home state's lemon groves, sunshine and beaches. For him, years of rising taxes, dead-end schools, unchecked illegal immigration and clogged traffic have robbed the Golden State of its allure.

Is there something left of the California dream?

"If you are a Hollywood actor," Reilly says, "but not for us."

Since the days of the Gold Rush, California has represented the Promised Land, an image celebrated in the songs of the Beach Boys and embodied by Silicon Valley's instant millionaires and the young men and women who achieve stardom in Hollywood.

But for many California families last year, tomorrow started somewhere else.

The number of people leaving California for another state outstripped the number moving in from another state during the year ending on July 1, 2008. California lost a net total of 144,000 people during that period ? more than any other state, according to census estimates. That is about equal to the population of Syracuse, N.Y.

The state with the next-highest net loss through migration between states was New York, which lost just over 126,000 residents.

California's loss is extremely small in a state of 38 million. And, in fact, the state's population continues to increase overall because of births and immigration, legal and illegal. But it is the fourth consecutive year that more residents decamped from California for other states than arrived here from within the U.S.

A losing streak that long hasn't happened in California since the recession of the early 1990s, when departures outstripped arrivals from other states by 362,000 in 1994 alone."

brucefan · Feb 17, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

BCTTWR · Feb 17, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Is not the federal govt going to bail out Calif?

Joe Contrarian · Feb 17, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

BCTTWR said:
Is not the federal govt going to bail out Calif?

Let's hope not!

Wise Guy · Feb 17, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

From my point of view, the worst aspect of this is: these morons, when they leave the nightmare that they themselves created, a lot of them come to Nevada. And they bring their stupid ideas with them. We could do without their idiot votes which have hurt California so much.

And again, a huge percentage of our crime is caused by people who leave California to go somewhere better, and they bring their misfit kids with them -- and those kids end up in jail here instead of there.

Dear Californians: when you leave, please move to a place where you will really fit in, a place like Detroit.

brucefan · Feb 18, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

2012 Libertarian Presidential Hopeful Wayne Root Says 20,000 California Government Employees Losing Their Jobs is Not a Disaster- "It's a Start in the Right Direction."
Root Says, "The State of California Needs to Enter Rehab."

Las Vegas, NV-February 17, 2009-California's budget crisis and legislative standoff has brought the state to what the politicians call the brink of disaster. Wayne Allyn Root, 2008 Libertarian Party Vice Presidential Nominee and 2012 Libertarian Presidential hopeful, doesn't understand why California laying off 20,000 government employees is called a "disaster." Root says, "This is a crisis caused by too many government employees in the first place. Government has grown too big, too powerful, too bloated. 20,000 people losing their jobs is certainly a terrible thing under normal circumstances. But 20,000 government employees being laid off in California is a good start. It's moving in the right direction. The biggest danger to California's future is NOT earthquakes or global warming- it is bankruptcy and state default on debts of over $40 billion. Government debt is the true crisis that threatens to destroy the future of the children and grandchildren of California citizens."
Root described the tragedy of out-of-control government employee union spending: "Bloated government employee salaries, pensions and health care benefits are drowning California (and America) in debt. We have expanded government too fast. We have hired too many government bureaucrats. We have given far too much power to public school teachers unions and government employee unions. Unions destroyed Detroit; the state of Michigan; and 'The Big 3' automakers. Unions have wrecked our public school system. Now government employee unions threaten to turn all of America into one big Detroit. Unfunded liabilities for government union employees have buried California under an avalanche of debt. We must end the cycle. Spending more and hiring more government employees cannot prevent bankruptcy- it can only hasten the looming disaster."
Root described California's problem: "Increasing the size of government isn't the solution, it is the problem. California pays their government employees the highest compensation in the nation, and spends the most money on education in the nation. The results of this spending addiction are no coincidence- the state of California has the highest budget deficit; among the worst public schools (despite spending the most money); and the lowest bond ratings among 50 states. California is on the brink of economic Armageddon because of out-of-control government spending. Too many public employees, being paid far too much, are a centerpiece of this crisis."
But Root points out that the federal government has the exact same problem. "We presently have a $5 trillion dollar unfunded liability disaster looming over American taxpayer heads from the cost of retirement for federal government employees. In private industry the way to survive this economic downturn is clear- cut budgets; lay off employees; cut salaries; and reduce benefits. Why should government be any different? Why is a 'privileged government class' treated differently than all of us in the private sector? Instead of Obama's plans to dramatically expand government and hire hundreds of thousands of new federal employees and public school teachers, and give raises to millions of state and local government employees, we should be going in the opposite direction."
According to Root the solution is clear: "We must cut our losses now and save our country from bankruptcy by laying off public employees; instituting hiring freezes; cutting government budgets drastically; rescinding guaranteed pay increases; reforming overly-generous pension plans; and if possible, eliminating retiree health benefits altogether. Government employees should be living under the same rules as the rest of us. Government employees should be suffering and sacrificing just like the rest of us. Government employees must live within their means- just like the rest of us. The days of paying California civil servants 40% to 60% higher compensation and pension packages than private sector employees are over. That is what got us into this mess in the first place."
Root calls the loss of 20,000 government jobs sad and unfortunate. "I don't like to see anyone lose their job. Each job loss is a personal tragedy. But unfortunately government jobs are the albatross that is sinking our economy. The loss of 20,000 government jobs in California is a good start. We either cut a few government jobs, or we all go under. We need many more layoffs and cuts in government to stave off the bankruptcy of the state of California. While private industry is cutting budgets and employees, government must also deal with its spending addiction. The same rules apply to government. The state of California needs to enter Rehab."
Root compares government layoffs to the 'Black Box' in an airplane disaster. "If it takes an epic financial crisis to finally cut a measly 20,000 government jobs in California, then this crisis may yet turn out to be our 'Black Box.' When a plane crashes, something good can come out of a tragedy because of the black box. What we learn from that black box can save millions of future lives. Because of the black box, those plane crash victims did not die in vain. They are instead turned into heroes by what we are able to learn from the black box...
California needs to learn a valuable lesson about its spending addiction. We must do more than cut the annual increases in spending. We must cut the actual budget. My bet is that if California lays off 20,000 government employees, the average citizen won't even notice they are missing. This crisis will subside and we'll find out that we can survive just fine without all these layers of government bureaucrats. As a matter of fact, we may find that our lives actually improve. We need to get back to the American values of personal responsibility, self-reliance and individualism. If it is to be, it is up to me, NOT government."
Root compares capitalism to government. "Capitalism only had one bad year. Government has lost money in virtually every department, every year since inception. President Obama wants CEO's to be held accountable and responsible for their losses and waste. Well I agree. But I think it's time government played by the same rules as business. If they did, the President and our Congress would all be in prison for defrauding the American taxpayers. It's time for change. Let's hope the 20,000 government employee layoffs in California are merely a good start in the right direction."

Wayne Allyn Root was the 2008 Libertarian Vice Presidential candidate. His new book will be released by John Wiley & Sons this Spring entitled, "The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gambling & Tax Cuts." The book is available for pre-sale at Amazon.com. Wayne also happens to be Barack Obama's college classmate (Columbia University Class of '83). For more of Wayne's views, commentaries, or to watch his many media interviews, please visit his web site at: www.ROOTforAmerica.com

brucefan · Feb 19, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

California Libertarians: Budget Deal A 'Travesty'

PANORAMA CITY, Calif. -- Libertarian Party of California Chair Kevin Takenaga issued the follow statement today regarding the budget deal agreed to this morning by the California legislature:
"The budget package passed by the California legislature this morning is an absolute travesty. It shows just how little concern the Democrats and Republicans in Sacramento have for ordinary, hard-working individuals and businesses in California.

"And make no mistake, even those Republicans who voted against it today share the blame. The state's fiscal mess didn't just happen overnight. It took years of arrogance, neglect, ignorance and willful disregard for taxpayers by both major parties to reach this point. The state's $40 billion deficit was utterly predictable. Both parties were copartners in crime in approving ever larger spending plans that far outstripped the state's rising revenues. Despite a slowing economy, the state still separated taxpayers from a record amount of their money last year.
"And even with record revenues, the state has fallen further behind in quality of life compared to low-tax states like Nevada, Arizona, Texas and Florida. Our government-funded educational system ranks near the bottom of the 50 states, our traffic is among the worst in the nation, we have more state employees per capita than we ever have, and Democrats and Republicans still think the problem is 'not enough revenue.'

"Not only has the legislature threatened the future prosperity of Californians, but it will place on the ballot a proposed constitutional 'open primary' amendment that would prevent voters from choosing from a wide field of candidates in a general election. A 'top-two' system will effectively deny voters the opportunity to choose third-party candidates who could offer the best hope for a return to sound budget practices.

"Despite this double whammy, the Libertarian Party of California will again field candidates at the local, state, and federal levels in the 2010 election cycle who will offer policies that will prevent us from ever reliving this budget mismanagement nightmare. We offer the political choice that Californians desperately need right now."

The Libertarian Party of California fields candidates at the local, state, and federal level each election cycle. It also publishes the weekly Libertarian Perspective, an op-ed column authored by writers who strongly believe in freedom and individual liberty. Libertarians are socially tolerant and fiscally responsible, believe in personal freedom in both social and economic spheres, and in government small enough to protect those freedoms. For more information, visit the party's Website at www.ca.lp.org.

Doc Mercer · Feb 19, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

AND WHO IS THE GOV OF CALIFORNIA??

:LMAO:LMAO:LMAO:LMAO:LMAO:LMAO:LMAO

Joe Contrarian · Feb 19, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Only the Democrats could take one of the once most prosperous states in the union and turn it into Detroit.

brucefan · Feb 21, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Wayne on "Savage Nation" with Michael Savage talking about California's Budget Crisis

<EMBED src=http://blip.tv/play/Ae6KQwA width=320 height=270 type=application/x-shockwave-flash allowfullscreen="true" allowscriptaccess="always"></EMBED>

Doc Mercer · Feb 21, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Who is the Gov????

brucefan · Feb 28, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

1 in 10 Californians 2938u4ji23unemployed... 2938u4ji23

Here are the facts, plain and simple:
*California leads the country in spending on government employees.
*California spends twice as much as the national average on education (with dismal results).
*California spends almost $200 million per year on free college educations for illegal immigrants (no that's not a typo).
*California has the most draconian anti-business rules and regulations in the nation. That forces businesses to spend too much. The result is that California is the most costly place in America to do business (according to the Milken Institute's business cost index).
*California is heaven for trial lawyers and hell for small businesses. That could be why so many major employers have left the state (according to Investor's Business Daily).
*California has the second highest income tax rates in all of America. And it is among the nation's leaders in virtually every tax category possible- income taxes, business taxes, sales taxes, property taxes, taxes on real estate transactions, taxes on stock transactions, capital gains taxes, workers compensation taxes, the list is endless.

Joe Contrarian · Mar 1, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Obama's tax plan will hit Silicon Valley hard

http://www.mercurynews.com/valley/ci_11811503?nclick_check=1

By Pete Carey and Mike Swift

Mercury News

<script language="JavaScript"> var requestedWidth</script>
<script language="JavaScript"> if(requestedWidth > 0){ document.getElementById('articleViewerGroup').style.width = requestedWidth + "px"; document.getElementById('articleViewerGroup').style.margin = "0px 0px 10px 10px"; } &</script>President Barack Obama's tax plan, which would boost income taxes on those earning $250,000 or more a year, would affect about twice the share of taxpayers in Santa Clara County as in the state and nation.

That's because there are more people here who earn high incomes, and the plan would take more of their income in taxes while cutting back on one of the few deductions available to them ? mortgage interest.

"Long term, there is going be some pain involved" for these taxpayers, said Michael Gray, a San Jose certified public accountant.

That income class includes about 43,000 taxpayers in Santa Clara County ? nearly double the number of any other county in the Bay Area ? which amounts to nearly 6 percent of the county's tax filers, according to data analyzed Friday by the Franchise Tax Board at the request of the Mercury News.

The data covers the tax year 2006, the most recent available.

Statewide, about 2.9 percent of taxpayers, or a little over 400,000 households, would be affected by the proposal. Nationally, about 3 percent of taxpayers would see higher taxes as well.

Obama's proposal still needs congressional approval, and it wouldn't take effect until 2011, when the Bush-era tax cuts on high earners are allowed to expire. Obama pledged during the campaign not to renew those tax cuts, saying high earners had benefited disproportionately during the Bush years.

Meanwhile, the recent federal stimulus package will mean tax reductions for the majority of the region's taxpayers in 2009. These include tax credits for education costs, child care and energy-conserving home improvements, as well as new deductions for the sales tax on the purchase of a new vehicle.

But Silicon Valley's big paychecks, coupled with the fact that Bay Area homeowners pay the highest mortgage bills in the state, could represent a double whammy for many in the South Bay. To help underwrite a national health care plan, Obama would begin to phase down itemized deductions on things like home mortgage interest and charitable contributions for single filers earning more than $200,000 and married couples earning more than $250,000.

The benefit of those itemized deductions would be limited to 28 percent of their value for people in the 36 percent and 39.6 percent brackets. On a mortgage interest bill or charitable contribution of $10,000, that would mean a tax deduction of $2,800 instead of $3,600 or $3,960.

But high-earning valley taxpayers who have been paying the so-called alternative minimum tax may get a little break. People at the $250,000 to $400,000 income level are likely to be hit less hard by the Obama tax plan in high-tax, high property-cost states such as California, because their exposure to the AMT will be reduced as their regular tax bill rises, explained Clint Stretch, managing principal for tax policy at Deloitte in Washington, D.C.

The good news is, you are not going to get hit as hard by the taxes that the president has proposed, he said. The bad news is, they've already been hit by the AMT.

Santa Clara County may be more reliant on tax deductions for mortgage interest than other parts of the state: 35 percent of county homeowners with a mortgage spent more than $3,000 a month on mortgage interest and other housing costs, the third-highest percentage in the state after Marin and San Mateo counties, according to U.S. Census Bureau data for the 2005-07 period.

Another tax change for high earners may not have as much of an impact here, experts said.

The tax on capital gains ? profit from the sale of stock or a piece of investment property, for example, and often a key source of income for those in higher tax brackets ? would return to 20 percent in 2011 for couples making more than $250,000, up from the current 15 percent. But local accountants and personal finance advisers observed that the capital gains of a year or two ago have evaporated.

"One reason we used to get hit a lot is we had a lot of a capital gains and a lot of valuable options we were exercising," said John B. Shoven of the Stanford Institute for Economic Policy Research.

"That is not happening any more. Most of those who had capital gains now have capital losses. We are not going to be paying as much in taxes whatever what the rates are."

And what is likely to be the impact of higher taxes on the valley's economy?
"You can look at how the Silicon Valley economy did when we had higher taxes on the wealthy back in the 1990s, and how has it done since, and you can't really make a case that raising the rates will hurt the economy," said Stephen Levy of the Center for Continuing Study of the California Economy.

Contact Pete Carey at pcarey@mercurynews.com.

* In 2006, the last year for which figures are available, there were 68 ZIP codes in California where the average gross income was higher than $200,000 for all tax filers, and nearly half of them were in the Bay Area.

* Two Silicon Valley ZIP codes had the highest average gross incomes in California, according to Franchise Tax Board data: The average annual gross income filed in the 94027 ZIP code, in Atherton, was over $1.1 million.

* It was about $937,000 for the 94039 ZIP code, in Mountain View, which includes post office boxes associated with Google and other companies.
Affluent Marin County would have the biggest share of taxpayers affected in the Bay Area "? nearly 10 percent of taxpayers there fall into the high-earner categories targeted by Obama"s plan.

* Solano County, where only about 1.3 percent of taxpayers fall into the higher brackets, would have the smallest share of affected taxpayers in the Bay Area.

* The Bush-era tax cuts would be allowed to expire, making the top tax bracket 39.6 percent.

* Itemized deductions would be limited to 28 percent of their value for people in the 36 percent and 39.6 percent brackets. On a mortgage interest bill or charitable contribution of $10,000, that would mean a tax deduction of $2,800 instead of $3,600 or $3,960.

* An increase in the capital gains tax, from 15 percent to 20 percent.

Doc Mercer · Mar 1, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Isn't REPUBLICAN WONDER BOY "Arnie" running California ??

Wow ... now how shocking !!!

Bush fucked it up Nationally and "Arnie" is getting ready to say "I won't be
back ..."

THE GOP IF NOTHING ELSE: CONSISTENT FUCKUPS

brucefan · Mar 20, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Here are the facts, plain and simple:
*California leads the country in spending on government employees.
*California spends twice as much as the national average on education (with dismal results).
*California spends almost $200 million per year on free college educations for illegal immigrants (no that's not a typo).
*California has the most draconian anti-business rules and regulations in the nation. That forces businesses to spend too much. The result is that California is the most costly place in America to do business (according to the Milken Institute's business cost index).
*California is heaven for trial lawyers and hell for small businesses. That could be why so many major employers have left the state (according to Investor's Business Daily).
*California has the second highest income tax rates in all of America. And it is among the nation's leaders in virtually every tax category possible- income taxes, business taxes, sales taxes, property taxes, taxes on real estate transactions, taxes on stock transactions, capital gains taxes, workers compensation taxes, the list is endless.

The results:
*Over the next 18 months, California is facing (according to the Governor) a budget deficit of over $40 billion dollars- and that may prove to be conservative.
*California is reduced to begging the federal government for a bailout. There is no other solution on the table. But one year after a federal bailout, the state would undoubtedly be $20 billion (or more) in debt again.
*California has been given the lowest bond ratings of any state in America (soon no one will dare to loan a penny to California). That little problem costs California's taxpayers millions of wasted dollars per year in increased interest costs.
*In the 1970's California led the nation in job growth. Since 2000, California's job growth is 20% lower than the nation. But it's not just any jobs that California is losing. According to the California Manufacturers and Technology Association, the state has lost 440,000 high-wage jobs.
*California's unemployment rate is now the 3rd highest in the nation.
*In the 1970's California was among the nation's leaders in population growth. Last year, over 144,000 more people left California than moved in. That led the nation. This was the 4th straight year of out-migration. Why is that important? As more and more high-income and high-net worth individuals move out, homes will drop in value, small businesses will fail (as they lose customers), and taxes will rise on the remaining citizens (to replace the taxes no longer paid by those who have escaped).

Do you get the picture? The proof is in the pudding- big government spending leads to economic disaster. When your state (or country) is run by government

Wake up people

<EMBED src=http://www.campaignforliberty.com/flash/banner.swf width=580 height=120 type=application/x-shockwave-flash allowscriptaccess="always" allowfullscreen="true">

California unemployment jumps to 10.5%

February jobless rate in the most populous state far exceeds national 8.1% unemployment rate.

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SAN FRANCISCO (Reuters) -- California's unemployment rate increased to 10.5% in February from 10.1% in January as the most populous state's economy worsened, official data showed Friday.
California's February jobless rate far exceeded both the state's 6.2% rate a year earlier and the national unemployment average for February of 8.1%, according to the report by the state's Employment Development Department.
California lost 116,000 non-farm payroll jobs in February from January and 605,900 non-farm jobs from a year earlier, marking a 4% decrease in nonfarm payrolls, the report said.

0:00 /5:18Some jobs still available<SCRIPT type=text/javascript _extended="true">vidConfig.push({videoArray: ["/video/news/2009/03/17/news.031709.ladders.cnnmoney.json"], collapsed:true});</SCRIPT> 
The U.S. financial crisis has battered California's economy, the world's eighth largest, which already had been slowed by a prolonged housing downturn.
The report noted that only one industry category tracked by state labor market analysts expanded payrolls in February from January - 7,900 new information industry jobs.
Ten industry categories posted job losses between the months, led by construction, which shed 30,900 jobs.

Apple · Mar 20, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Hate to say it, but the illegal immigrants especially the latino ones are ruining the economy here..

ACCC · Mar 20, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

The first solution that is necessary from California is to cut back on the illegal immigrants. They take jobs from regular US workers for less money, then they pay no taxes, yet they still get government services and benefits of living in this country. That also leads to more Americans being unemployed, as well as the increased costs of that. This is not the time to attack teachers unions, living wages, and healthcare.

Doc Mercer · Mar 20, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Thank God they have had "Arnie" in charge ....

and to think this POS was "Presidential Material" according to Hannity

:LMAO:LMAO:LMAO:LMAO:LMAO:LMAO:LMAO:LMAO

brucefan · Mar 28, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Coming to a town near you.

Saturday, March 28, 2009

Bread Lines forming in California along with Tent Cities

ANTHONY BARTKEWICZ, MyFox National
- Many say a depression doesn't have to be great, that the economy can sink into a milder depression. The Salvation Army says it's happening now, and in San Diego County, people are standing in line outside a Salvation Army waiting for donated bread.

Salvation Army director of communications Suzi Woodruff Lacey said they are seeing people from all walks of life: "white collar, blue collar, people who have lost their jobs, people who are in danger of losing their homes."

Bread lines were regularly seen in the 1930s during the Great Depression, when unemployment peaked at more than 25 percent and the stock market lost 90 percent of its value. Today, California's unemployment rate hit 8.4 percent.

TENT CITIES
Tent cities reminiscent of the "Hoovervilles" of the Great Depression have been springing up in cities across the United States - from Reno in Nevada to Tampa in Florida - as foreclosures and redundancies force middle-class families from their homes.

"Where the tent city is now is literally a toxic waste dump, it's unsafe, but these people are very resourceful," Burke said. "Some people are living in squalor, with just a tarp tied to a chainlink fence. But then you'll see someone with several tents: The tent they live in, plus some outbuilding tents. And they couldn't be more neat and more tidy. They're working hard to create a sense of home."

Many of the 200 residents of Sacramento's Tent City, as with those around the country, are not recent victims of the downturn: They are the chronically homeless, some of them mentally ill. But the encampment seized national attention after Oprah Winfrey featured it on her daytime television show, part of a series of reports she has been running on the "new faces" of homelessness.

Embarrassed by an influx of television crews, Arnold Schwarzenegger this week announced plans to house the tent-dwellers in a nearby convention centre until a $1m (?690,000) plan for more permanent shelter can be implemented.

The California governor told reporters he had "personally delivered a letter to President Barack Obama last week, to request that economic stimulus funds for the homeless be fast-tracked".

Obama grappled with the phenomenon on Tuesday, when a reporter at his primetime news conference asked him about the "tent cities sprouting up across the country". The president said he was "heartbroken that any child in America is homeless", adding: "The most important thing I can do on their behalf is to make sure their parents have a job."

WORTH REPEATING AS WE ALL GET READY TO "DEBATE"

THE BUDGET!:cheers

Here are the facts, plain and simple:
*California leads the country in spending on government employees.
*California spends twice as much as the national average on education (with dismal results).
*California spends almost $200 million per year on free college educations for illegal immigrants (no that's not a typo).
*California has the most draconian anti-business rules and regulations in the nation. That forces businesses to spend too much. The result is that California is the most costly place in America to do business (according to the Milken Institute's business cost index).
*California is heaven for trial lawyers and hell for small businesses. That could be why so many major employers have left the state (according to Investor's Business Daily).
*California has the second highest income tax rates in all of America. And it is among the nation's leaders in virtually every tax category possible- income taxes, business taxes, sales taxes, property taxes, taxes on real estate transactions, taxes on stock transactions, capital gains taxes, workers compensation taxes, the list is endless.

The results:
*Over the next 18 months, California is facing (according to the Governor) a budget deficit of over $40 billion dollars- and that may prove to be conservative.
*California is reduced to begging the federal government for a bailout. There is no other solution on the table. But one year after a federal bailout, the state would undoubtedly be $20 billion (or more) in debt again.
*California has been given the lowest bond ratings of any state in America (soon no one will dare to loan a penny to California). That little problem costs California's taxpayers millions of wasted dollars per year in increased interest costs.
*In the 1970's California led the nation in job growth. Since 2000, California's job growth is 20% lower than the nation. But it's not just any jobs that California is losing. According to the California Manufacturers and Technology Association, the state has lost 440,000 high-wage jobs.
*California's unemployment rate is now the 3rd highest in the nation.
*In the 1970's California was among the nation's leaders in population growth. Last year, over 144,000 more people left California than moved in. That led the nation. This was the 4th straight year of out-migration. Why is that important? As more and more high-income and high-net worth individuals move out, homes will drop in value, small businesses will fail (as they lose customers), and taxes will rise on the remaining citizens (to replace the taxes no longer paid by those who have escaped).

Do you get the picture? The proof is in the pudding- big government spending leads to economic disaster. When your state (or country) is run by government

Doc Mercer · Mar 28, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Thank God none of this shit happened under Bush' watch

:+textinb3:+textinb3:+textinb3:+textinb3

Jesse Livermore · Mar 28, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

One question for all of us that live outside of California. Why are we paying taxes to the federal govt. to bail out California when we are not residents of that state ?

Do I smell a revolution coming ?

Doc Mercer · Mar 28, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Joey C is rounding up his Canadian Mounties !!!!

Joe Contrarian · Mar 28, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Jesse Livermore said:
One question for all of us that live outside of California. Why are we paying taxes to the federal govt. to bail out California when we are not residents of that state ?

Do I smell a revolution coming ?

tank · Mar 28, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Doc Mercer said:
Thank God none of this shit happened under Bush' watch

:+textinb3:+textinb3:+textinb3:+textinb3

Yeah it just all of a sudden happened in the last 2 months.

brucefan · May 14, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

California Officially Begs Washington For Bailout

California formally asks Geithner for TARP assistance

Story Comments (38)

Alert Email Print<SCRIPT type=text/javascript src="http://w.sharethis.com/button/sharethis.js#publisher=b1f6011c-ea44-4541-b0b6-e731f2789411&type=website&buttonText=Share&style=rotate&send_services=&post_services=facebook%2Cdigg%2Cdelicious%2Cybuzz%2Ctwitter%2Cstumbleupon%2Clinkedin%2Creddit%2Ctechnorati%2Cmixx%2Cblogger%2Ctypepad%2Cwordpress%2Cgoogle_bmarks%2Cwindows_live%2Cfark%2Cpropeller%2Cnewsvine&linkfg=%232d317a"></SCRIPT> Share By John Letzing, MarketWatch

SAN FRANCISCO (MarketWatch) -- California Treasurer Bill Lockyer asked U.S. Treasury Secretary Timothy Geithner on Wednesday to authorize assistance for his state from the federal Troubled Asset Relief Program, warning that depressed tax revenues may cut into basic services and halt the building of infrastructure.
In a letter, Lockyer asked Geithner for TARP assistance for California and "other financially strapped states and local governments which face a severe cash flow crunch."
"If we cannot obtain our usual short-term cash-flow borrowings, there could be devastating impacts on the ability of the State or other governments to provide essential services to their citizens," Lockyer wrote.
In particular, Lockyer cited fire and police protection, education and social services.
No credit

In addition, Lockyer warned in the letter that California's cash flow problems may lead to trouble accessing the long-term bond market, which could "eventually even halt our infrastructure construction programs."
Lockyer estimated that California's cash flow shortfall in fiscal 2009-2010 will be more than $13 billion.
But weakness in the credit markets will cause difficulties in short-term borrowing to make up that difference, Lockyer wrote, necessitating the use of TARP money to help make funds more easily available through banks.
Under a plan outlined by Lockyer in his letter, if a government is unable to repay loans made using TARP funds, the Treasury would use TARP money to "purchase the non-performing assets."
Under that scenario, the state or local government would then directly repay the Treasury under the terms it had with the bank, according to Lockyer's plan.
Lockyer has stated previously that he believes the Obama administration has the authority to use TARP to guarantee state-government borrowing.
John Letzing is a MarketWatch reporter based in San Francisco

FACTS WORTH REPEATING

Here are the facts, plain and simple:

*California leads the country in spending on government employees.
*California spends twice as much as the national average on education (with dismal results).
*California spends almost $200 million per year on free college educations for illegal immigrants (no that's not a typo).
*California has the most draconian anti-business rules and regulations in the nation. That forces businesses to spend too much. The result is that California is the most costly place in America to do business (according to the Milken Institute's business cost index).
*California is heaven for trial lawyers and hell for small businesses. That could be why so many major employers have left the state (according to Investor's Business Daily).
*California has the second highest income tax rates in all of America. And it is among the nation's leaders in virtually every tax category possible- income taxes, business taxes, sales taxes, property taxes, taxes on real estate transactions, taxes on stock transactions, capital gains taxes, workers compensation taxes, the list is endless.

Joe Contrarian · May 14, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

brucefan said:
FACTS WORTH REPEATING

Here are the facts, plain and simple:

*California leads the country in spending on government employees.
*California spends twice as much as the national average on education (with dismal results).
*California spends almost $200 million per year on free college educations for illegal immigrants (no that's not a typo).
*California has the most draconian anti-business rules and regulations in the nation. That forces businesses to spend too much. The result is that California is the most costly place in America to do business (according to the Milken Institute's business cost index).
*California is heaven for trial lawyers and hell for small businesses. That could be why so many major employers have left the state (according to Investor's Business Daily).
*California has the second highest income tax rates in all of America. And it is among the nation's leaders in virtually every tax category possible- income taxes, business taxes, sales taxes, property taxes, taxes on real estate transactions, taxes on stock transactions, capital gains taxes, workers compensation taxes, the list is endless.

Hussein's socialist vision for America in a nutshell.

BCTTWR · May 16, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

4625 · May 16, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

The biggest entertainment value would be a link to the website where these wacky pics come from. . .I bet you can also purchase a tinfoil hat with matching gloves off the same site. . .

Junkyarddog47 · May 16, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

For all of you people who do not live inCalifornia, here is what really happened. Years ago California opened the gates for every illegal who wanted to, to enter the state. This was the doing of the Liberal Democrats, who run this state. Then it was time to get rid of Gray Davis, the Democratic Governor, who raised taxes so high that people could not survive. There was no primary. Arnold ran, as a Republican, but gathered 50% of the Hispanic vote, and 30% of the African American vote. In case you do not know this, his wife is Maria Shriver, a loyal Kennedy girl who backed Obama in the past election.

The State Legislature was living under a false economic sense of security. What was happening was that the state was being overrun by poor hispanics, while the middle and upper middle class started to leave. This meant that even though the population remained constant, the money and jobs were leaving the state. The state legislature, which never saw a dollar that it did not want to spend, assumed that as long as the population remained constant, so would the tax revinues. Dead wrong. Illegals and the poor who replaced the middle and upper middle class spend a lot less money, meaning that tax revinues drop dramatically. They eat at McDonalds, not a nice restaurant. They buy used beat up cars, not new ones. They flood the hospitals with their runny noses and gun shot wounds, and have no insurance or way of paying for their care.

So the State starts to run a defecit, but the Ultra ZLiberal Democrats who run the State Legislature simply can not stop giving away money. Ten the bottom falls out of the economy. Now the State is broke. So ARnold and the idiots inSacramento raise taxes, including a 1% sales tax hike. That is still not enough, because the Democrats can not stop spending money.

Now Arnold says he will cut 5000 employees from the state payrolls, cut the swchool year by 7 days, release 100,000 criminals back on to the streets, turn 23,000 jailed illegals over to the feds, cut funding to hospitals, and drill for oil off the Santa Barbara Coast, to offset a 16 Billion Dollar defecit. And all this is assuming that 5 ballot measures aimed at making the temporary tax hikes permanent, pass on Tuesday. They are far behind now. Arnold also wants to borrow 6 Billion Dollars from private industry in California, because the State's Bond rating is the worst of any State in the Nation, and no bank in it's right mind will lend California any money.

All this, because California allows so many illegals into it's borders. Illegals are a cancer to California. While many of them work, they still take out way more money than they put in. Their dependnecy on Welfare, monitary assistance, free health care, free educations, and other programs far outwrigh any tax contributions that they may make. As long as California, and their Liberal State Legislatures, and LIberal City Councils allow this huge influx of illegals, the State will never get out of it's financial crisis. REmember, that lying Liberal leader of the House, Nancy Pelosi, is from California. Enough said?

4625 · May 16, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

From the content, i can comprehend why you created a ghost. . .

brucefan · May 19, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Beck Slams California Tax Hike Proposition, Calls for Real Budget Cuts

May 19, 2009 - 10:56 ET
<EMBED src=http://www.eyeblast.tv/public/eyeblast.swf?v=ydqGSU6Ueu&c1=0xACACAC&c2=0x373737&sm=1 width=250 height=202 type=application/x-shockwave-flash allowfullscreen="true"></EMBED>
As Californians go to the ballot box to vote whether or not to increase their taxes, government leaders in Sacramento are trotting out "the usual human shields" - kindergarteners, firefighters, policemen and nurses to frighten people into voting.
The ballot initiative, promoted by California Gov. Arnold Schwarzenegger, has little to no chance of passing according to the Los Angeles Times. But that did stop the governor from using fear tactics, as Fox News Channel's Glenn Beck pointed out on his May 19 program.
"What's their plan to turn the state around? They have one?" Beck said. "Yes - the Governator, he proposed $15 billion in cuts. Wow. And he warned that if his, if his propositions failed, California will need to release 40,000 prisoners out on the streets."

brucefan · May 20, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

:thumbsup Press Release

For Immediate Release
Wednesday, May 20, 2009
Libertarian Party of California Says the Failure of Propositions 1A Through 1E Signals Need for Real Budget Reform

To erase the deficit, the California Legislature must address its addiction to spending

PANORAMA CITY, CA ? The Libertarian Party of California (LPC) applauds the defeat of ballot propositions 1A through 1E, and notes that to eliminate the perennial budget deficit, the state legislature must confront its addiction to spending.
"The Libertarian Party of California couldn't be more pleased that voters soundly rejected the proposed tax increase and phony budget solutions offered by Props. 1A through 1E," said Kevin Takenaga, the chair of the LPC. "These propositions, which were crafted in a backroom deal with no public input, offered phony solutions to real problems.
"The legislature has no choice now but to confront its addiction to spending. And the Libertarian Party of California has offered, and will continue to offer and support, policy suggestions that could save billions of dollars dedicated to wasteful and inefficient programs."
Government demonstrates every day that increased spending doesn't guarantee quality service. For example, test scores for students in government-funded schools are lower, on average, than for students who attend private schools, which spend less per capita than its public counterparts. In "The Money Myth: School Resources, Outcomes, and Equity," author and University of California professor W. Norton Grubb cites studies that find only a weak relationship between public school funding and educational outcomes.
Moreover, adjusting state employees' pay and benefits to average that of workers in private industry could save the state up to $40,000 per position and would go a long way towards eliminating the current budget deficit. The state budget could be further cut by reviewing each state department, division, bureau, board, and commission to determine whether the taxpayer-funded government service should be discontinued, merged with other departments, or charge user fees to cover its budget, or whether the service should be competitively bid out at less cost to taxpayers. Many such options were already offered by the California Performance Review Commission.
The legislature and governor can also find savings by rethinking its current punitive taxes on wages, enterprise, the sale of goods, and the value of buildings, and replacing them with voluntary user fees, pollution charges, and taxes on the land value generated by governmental public goods.
Spending relief could also come as a result of decriminalizing recreational drugs. Billions of dollars could be saved by eliminating enforcement of drug laws, including the arrest, prosecution and incarceration of nonviolent drug offenders.
"Libertarians don't just complain, but offer real solutions," Takenaga said. "Our sound advice is a far cry from the shell games, phony spending caps, and budget gimmicks that the Democrats and Republicans have tried for years to offer as budget reform. If they have proven anything, it's that their ideas don't work. It's time for a fresh approach. Libertarians believe in freedom and limited government, but we want the government we have to work efficiently and effectively. Unfortunately, that is a novel concept for the career politicians who control Sacramento, but it's one we hope voters will embrace as a real solution for California."
About the Libertarian Party of California
The Libertarian Party is America's third largest political party, founded in 1971 as an alternative to the two main political parties. The Libertarian Party of California fields candidates at the local, state, and federal level each election cycle. It also publishes the weekly Libertarian Perspective, an op-ed column authored by writers who strongly believe in freedom and individual liberty. Libertarians are socially tolerant and fiscally responsible, believe in personal freedom in both social and economic spheres, and in government small enough to protect those freedoms. For more information, visit www.ca.lp.org.
Press release from the Libertarian Party of California

javascript:void(0)

brucefan · May 29, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

May 29, 2009

<TABLE width="95%" border=0><TBODY><TR><TD align=left width="80%">Obama Should Tell California to Drop Dead

</TD><TD align=right>

</TD></TR></TBODY></TABLE>
During the height of New York City?s financial crisis in the 1970?s, President Gerald Ford had the good sense to turn down Mayor Abe Beame?s request for a federal bailout. The refusal prompted the famous New York Post headline, ?Ford to City: Drop Dead.? More than 30 years later, as California Governor Arnold Schwarzenegger makes a similar plea to Washington, I hope President Obama will show similar restraint. Unfortunately, given Obama?s recent string of unwise economic decisions, it?s hard to imagine that his judgment will suddenly improve.

A federal bailout would spare California from having to make spending cuts needed to bring its budget into balance. The matter has become urgent since California voters rejected several tax-hiking ballot initiatives. Rather than taking the vote as a signal to dramatically curtail spending, the state turned to the feds. If they get a free pass, the politicians can avoid fixing any of their past mistakes or preparing California for the future.

California, like many states, expended its bureaucracy as the nation?s bubble economy inflated. When condos flipped like hamburgers and homeowners flush with equity spent like lottery winners, extra tax revenue flooded into Sacramento. However, instead of saving the money for a rainy day or paying off prior debts, the state government simply ballooned its spending. Now that the bubble has burst, and revenues are severely depleted, it is time for California to reconsider its excesses.

Governor Schwarzenegger?s claim that a federal guarantee is not a bailout is ludicrous. No one in the private sector will lend California any money because the state can?t pay it back. Just like AIG and GM, its needs federal help to stay solvent. And although the Federal balance sheet is in far worse shape than California?s, there is one crucial difference: Washington has a printing press, and Sacramento does not. With the ability to pay off debts with newly created funds, a federal default is not a concern.

However, if Obama comes to the rescue, none of the needed cuts will be made. Instead, California will continue to operate its bloated bureaucracy and will be in constant need of more bailouts. In other words, if Schwarzenegger gets his bailout, look for him to utter his famous line ? ?I?ll be back.?

But it?s not just Schwarzenegger who will be back, but governors from all the other states as well. After all, if the Federal government bails out California, by what right can they deny similar aid to other states? The bailout will send a clear message that states do not need to cut spending.

Similar to the reckless behavior that resulted from federally guaranteed mortgages, federal guarantees on state debt will counteract the market?s attempt to force states to act responsibly. As the market accurately prices-in the heightened risk of default, California faces staggering increases in its borrowing cost. Under normal circumstances, this pressure would force the state to act prudently now to diminish the risk of a future default. However, by allowing California to evade the ?bond market vigilantes,? the stage will be set for much bigger losses.

The moral hazards created by state bailouts are tremendous. With federal guarantees given to profligate states, those states that had shown greater fiscal responsibility will face higher interest rates ?as their bonds lack a federal guarantee. This creates the perverse incentive for all states to act irresponsibly.

Just as government-guaranteed mortgages lead the market to make overly risky home loans, federally guaranteed state obligations will set the stage for yet another crisis.

Federal backing of California bonds would effectively turn them into Treasury bonds, with the added appeal of being exempt from California state income tax. Therefore, the Treasury will be at a competitive disadvantage when it looks to issue its own debt to Californians. If it then has to guarantee the bonds of all the other 50 states, why would any Americans buy Treasuries when they can get identical credit quality on better terms from the states? The only real buyers left would be foreigners, who are already queasy about the Treasuries they own.

The need to make good on state and federal obligations will further depress the appeal of all U.S. dollar-denominated debt. As a result, as real buyers flee the market, the Fed will have to run its printing presses even faster to pick up the slack. This will set into motion a self-perpetuating spiral of money printing and Treasury sales with a predictable result: hyperinflation.

In the meantime, by redirecting credit to California that otherwise would have gone to more credit-worthy borrowers, the government will worsen the credit crunch for the rest of the country. Since there is only a finite supply of credit, money borrowed by California will no longer available to other borrowers. The effect is a less efficient allocation of capital that further undermines national productivity.

The only rational policy choice for Obama is to send Schwarzenegger packing. If he does, California will have no choice but to cut spending or default on its bonds. My guess is that, with their backs to the wall, the California legislature will choose the former. However, even if they default, at least the losses will be borne by those who freely assumed the risks. With a bailout, the losses will be shouldered by those who were not even parties to the transactions. If we go this route, we can all say ?hasta la vista, baby? to our prosperity.

For a more in depth analysis of our financial problems and the inherent dangers they pose for the U.S. economy and U.S. dollar denominated investments, read Peter Schiff?s book "Crash Proof: How to Profit from the Coming Economic Collapse".

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brucefan · Jun 9, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Tuesday, June 9, 2009

California to lead us into Abyss

California Leads Nation to Bond Default Abyss: Kevin Hassett
Commentary by Kevin Hassett

June 1 (Bloomberg) -- There is an old joke that a borrower dies if everyone stops believing in him. A look at the history of financial crises suggests there is a kernel of truth in this.

That's why the California budget crisis may well lead to a second financial calamity that would be far worse than anything experienced over the past 18 months.

California is, of course, facing a debacle. Voters rejected a series of ballot initiatives designed to restore some sense of sanity to the state's budget. As a result, California is more than $21 billion in the hole.

Governor Arnold Schwarzenegger is struggling to find enough spending reductions to close the gap, but investors are skeptical. According to Fitch Ratings, which in March downgraded California's general obligation bond rating, California has the worst rating of any state.

Even amid economic calamity, the people of California are relatively wealthy, and the state's economy is an impressive engine. If California were a country, it would have the eighth- largest economy on Earth. Given those advantages, the notion that California might default on its government debt might seem farfetched. After all, the reasoning goes, they can always raise taxes to pay off debt. Even a gridlocked legislature might act if California gets too close to the edge.

The problem with that line of thinking is that California's politicians might get little notice that desperate times are at hand. For some borrowers, the first sign of problem is their inability to make an interest payment. For others -- and here lies the nightmare scenario -- the problem first becomes visible when all the lenders disappear.

My reaction: As Kevin Hassett writes, ?The California budget crisis may well lead to a second financial calamity that would be far worse than anything experienced over the past 18 months.?

1) California is more than $24.3 billion in the hole.

2) On Monday, California Gov. Arnold Schwarzenegger ordered a halt to funding for state contracts on everything from pencils to office space.

3) California's state controller has warned about the state running out of cash in two weeks (this warning happened last week).

4) The likely scenario (also the nightmare scenario) is that all California?s lenders disappear, and the state is unable to roll over its debt.

5) If the unofficial eighth-largest economy fails on its debt, it will cast doubt on all government debt, especially treasuries.

6) The US government's fiscal situation is in worse shape than California's.

Conclusion: The ?bad? phase of the financial crisis is on the verge of beginning. It involves the dollar?s collapse, soaring commodities, and skyrocketing interest rates.

The time frame for everything to really start falling apart is the next two or three months. California budget crisis is one of many factors which sets this time frame (default is likely within three months). A default by California would drag the bond market into the abyss.
More Here

Nicolos_Darvas · Jun 9, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

http://www.youtube.com/watch?v=dN3GbF9Bx6E

brucefan · Jun 11, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

Here comes the next Federal bailout

Then all hell breaks loose

California nears financial "meltdown" as revenues tumble

<CITE class=caption>AFP/Getty Images/File ? California Gov. Arnold Schwarzenegger, seen here in May 2009 in Washington, DC, has announced plans to ? </CITE>

Slideshow:Calif. Budget Crisis
Play Video Video:California's Budget Deficit <CITE>ABC News</CITE>
Play Video Video:San Quentin Prison, LA Coliseum For Sale? <CITE>AP</CITE>

<CITE class=vcard>By Jim Christie Jim Christie </CITE>? <ABBR class=timedate title=2009-06-10T21:05:06-0700>Thu Jun 11, 12:05 am ET</ABBR>
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.
DUELING BUDGET CONCEPTS
Schwarzenegger, a Republican, has proposed filling the state's budget gap with deep spending cuts, borrowing from local governments and by scrapping some state programs, including its welfare program.
Democrats who control the legislature are crafting a rival budget plan that includes spending cuts and saves programs Schwarzenegger has proposed eliminating. They instead would use reserves estimated in his budget to narrow the budget gap.
State Senate President Pro Tem Darrell Steinberg said on Tuesday he wants a budget agreement by the end of this month.
California's new fiscal year begins on July 1. The sooner the state has a budget the better poised it will be to raise short-term cash to fund its operations by selling revenue anticipation notes, or RANs, on the municipal debt market.
If pressed, California could sell revenue anticipation warrants, or RAWs, an idea floated by Schwarzenegger when he unveiled his budget plan last month. But he quickly shelved it amid opposition from lawmakers.
"No one wants to issue RAWs for our cash-flow borrowing," said Tom Dresslar, a spokesman for State Treasurer Bill Lockyer. "Everyone would prefer to issue RANs for the obvious reason: It costs less."
Lockyer, a Democrat, supports a budget with the reserve Schwarzenegger has proposed. That would increase confidence among investors that California has cash to pay the $7 billion to $9 billion in short-term debt notes that Lockyer's office assumes the state will need to sell, Dresslar said.

Joe Contrarian · Jun 16, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

California to miss budget deadline, "meltdown" nears

<abbr title="2009-06-15T16:54:35-0700" class="timedate">Mon Jun 15, 7:54 pm ET</abbr>

http://news.yahoo.com/s/nm/20090615/pl_nm/us_economy_california_budget

SACRAMENTO, California (Reuters) ? California lawmakers were poised to miss their constitutional deadline on Monday for a state budget, bringing the state's government closer to running out of cash.

Democrats and Republicans in the legislature's budget conference committee worked through Monday afternoon on a variety of proposals addressing Gov. Arnold Schwarzenegger's plan to close a $24.3 billion budget shortfall, but they failed to find common ground on its most dramatic proposal: eliminating the state's welfare system.

"This meeting is not headed in that direction," Republican Assemblyman Roger Niello said.

California's revenues are plunging amid recession, rising unemployment and the prolonged housing crisis, and the state is unable to borrow its way out of its immediate financial trouble by issuing debt at low cost because of its budget gap.

It will run out of cash within weeks if it does not balance its books, leaving it little option but to postpone a variety of payments, according to State Controller John Chiang, who estimated last week that California was "less than 50 days away from a meltdown of state government."

Democrats, who control California's legislature, said their aim is to cut spending, but to maintain a base of government programs, including many for the needy.

Republicans countered that only dramatic cuts will balance California's budget for its next fiscal year, which begins in July.

Some state Assembly Democrats have talked about the possibility of increasing some taxes to raise revenues, but both Schwarzenegger and Republicans said no.

Republicans have enough votes to block budgets from passing and have used the power in previous years to delay spending plans from reaching the governor's desk.

In fact, the legislature has missed its constitutional budget deadline for more than 20 years running. It is not unusual for the government of the most populous U.S. state to begin its new fiscal year without a spending plan in place which is one reason why California has the lowest credit rating of any U.S. state.

In most years, California officials have been able to rely on the state's growing economy to fill the state's government's coffers -- even as the bickered over budget plans.

The sooner California has a budget, the sooner it will be able to approach Wall Street to sell short-term debt in the form of revenue anticipation notes to help smooth out its near term finances, according to the state treasurer's office.

(Reporting by Jim Christie, editing by Leslie Gevirtz)

Rxx · Jun 16, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

If California got just 90 cents of every dollar they send to Washington rather than the 80 cents currently, there wouldnt be a budget problem here. You idiots scrawling about illegals sucking tax dollars just highlight your ignorance.

brucefan · Jun 20, 2009

Re: Why California Leads the Nation in Deficit, Debt and Out-Migration

ANOTHER LIBERAL BIG GOVT SUCCCESS STORY :LMAO

Saturday, June 20, 2009

Hey New York your next after California

For now, folks living in New York can watch the soap opera playing out in California from a comfortable, continent-sized distance.

But after that drama plays out, New York is next.

Smart Money: Right now, at least 47 states are facing significant shortfalls in their 2009 and/or 2010 budgets, according to the Center on Budget and Policy Priorities, a think tank in Washington, D.C. And many of those states are looking to tax hikes to help fill the gaps.

?Pretty much everyone is doing poorly,? says Kim Rueben, senior research associate at the Tax Policy Center. ?It?s just a question of who?s hurting more than others.?

The top honor goes to California, which is projecting that it will fall about $25 billion short come fiscal 2010. Taking second place is New York with a projected $17.6 billion deficit for fiscal 2010, according to the National Conference of State Legislatures, a bipartisan policy research organization in Washington, D.C.

This can't be a surprise to anyone. New York is like California. It's highly exposed to some of the worst areas of the economy. It's got a huge government apparatus, and its political system is something of a joke (see: The New York State Senate). Thank god for New Yorkers that there isn't a referendum system here, or the state would've gone bust years ago.

New York should be hoping for a California bailout, since that's their fate, too.

You can read more from the think tank here.

Why California Leads the Nation in Deficit, Debt and Out-Migration

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