California goes broke, halts $3.5 billion in payments

[WarDog]

http://rawstory.com/news/2008/California_goes_broke_halts_3.5_billion_0202.html

[Primbs]

Talk about the height or irresponsibility. The state legislature should be fired.

[hillbilly123069]

So goes down the 1st domino.

[nobody's_hero]

I recall that socialism failed in Hawaii with state-managed healthcare.

Now it looks like the pinnacle of socialist states is hitting rock bottom, and there will still be people thinking that it just has to work on the federal level.

[Truth Warrior]

Someone should have told the PRC that socialism just doesn't work. :p :rolleyes:

[werdd]

It's their fault they adopt every social program they can think of, atleast we might get rid of arnie and pelosi in the process.

[slacker921]

how odd.. there was no mention of this on the morning news. Every morning news show I tuned into had something about the woman who had 8 babies (mother of 14) though. Maybe this isn't important?

[acptulsa]

Maybe this isn't important?

Nationalist Rubric Playdough (putty in the hands of power since they fired Bob Edwards) was too busy emphasizing how dangerous it was to speak the truth in Iran right now, then enthusiastically giving the full name of the one old woman who was foolish enough to speak openly to them. So, obviously this news just didn't fit. Haven't seen the New York Times today. Did they consider it fit to print, or even make it fit?

[georgiaboy]

"I see the will during the negotiations even though these are very, very tough things that we talk about, where we go into areas that we have never, ever dreamt of going into and trying to solve," said Governor Arnold Schwarzenegger. "So you will be very surprised when the whole thing is done. We're still not there yet. There is still a lot of work that needs to be done but we are moving slowly forward with this process."

Any idea what Governator is referring to here? Could they be proposing - dare I think it - a more libertarian approach? =O

[acptulsa]

Any idea what Governator is referring to here? Could they be proposing - dare I think it - a more libertarian approach? =O

Austrian economics from the Austrian? Ha! Don't hold your breath. He knows who put him in power...

[angelatc]

Any idea what Governator is referring to here? Could they be proposing - dare I think it - a more libertarian approach? =O

No, he's probably positioning himself to overturn Prop 13, which keeps property taxes low for people who have been in their homes for a long time.

[Primbs]

That will really cause a real estate crash if they get rid of Prop 13.

[angelatc]

Someone should have told the PRC that socialism just doesn't work. :p :rolleyes:

Of course it does! Haven't you been to Canada, or England?

[Truth Warrior]

Of course it does! Haven't you been to Canada, or England? Nope, but I've talked with some Canadians and Brits whose opinions I trust. ;) :)


Don't Go Socialist (http://www.lewrockwell.com/raimondo/raimondo28.html)
Justin Raimondo on Putin's advice to the West.

[Feenix566]

It doesn't take a lot of hard work to balance the budget. I could balance California's budget before I finish my Cherios in the morning. All it takes is pissing off a whole lot of people who depend on the nanny state.

[Primbs]

Very True.

[angelatc]

It doesn't take a lot of hard work to balance the budget. I could balance California's budget before I finish my Cherios in the morning. All it takes is pissing off a whole lot of people who depend on the nanny state.

Exactly!

[fr33domfightr]

Just so everyone understands what's going on in California:

1. We've had a majority of Democrats in Sacramento for many many years. They've liked spending money.

2. The Dot Com bubble created increasing incomes and capital gains, this lead to an increase in the state budget.

3. After the Dot Com bubble burst, revenues dropped, which lead to State Budget imbalances. Gray Davis wanted to deal with this with tax increases. People got pissed off and removed him from office.

4. Arnold Schwarzenegger gets voted in by saying he'll reform Sacramento; Blow up the boxes, to FIX the budget. People believed he could do it.

5. Arnold meets heavy resistance from the Dems, along with their primary supporters, the Teachers Union, State Workers Union, Prison Guards Union, etc., etc., etc. Arnold gets by, by borrowing money to keep things kosher.

6. Arnold tries to have a special election, putting propositions on the ballot to get the people's vote on the budget issues. These propositions would give arnold the power he needs to reign in runaway spending. The ballot propositions receive huge opposition from the affected workers unions. The ballots are resoundly defeated!! Arnold is stunned...

7. The housing bubble is growing, making for lots of extra capital gains tax revenue coming into the state coffers. This eases the pain, and allows Arnold to pass budgets increasing in size, supposedly to give the people what they want, their cake (and their desire to eat it too). This goes on for several years, eventually leading to a 40% budget increase SINCE Arnold took office!!

8. The housing bubble finally bursts, since no one can afford homes anymore. Because the housing bubble was so big here, prices must fall much more than other places in the country. With falling prices, no one wants to buy, deepening the impact. With no sales, there's no capital gains taxes. The state is in trouble.

9. The housing bubble, along with the long inflationary trend since 1971, has increased prices across the board in the economy. People cut back on spending because they bought an expensive home and must try to make ends meet. People who Rent saw there rates skyrocket during the housing bubble, as property owners thought they could cash in. People start losing their jobs. People cut back even more to pay off debt or save money just in case they get laid off.

10. The State Budget analysts wake up to a shocking finding, they are short over $40 Billion over the next 2 years. Democrats are insistent that we must have tax increases to make up the shortfall. Arnold is convinced of this too, that "we have a revenue problem." The fact still remains, the budget went up 40% since he took office. The few republicans in the legislature are blocking any tax increases. Many signed a "no tax increase" pledge just 5 months ago; cracks might be forming in their resolve...


FF

[Primbs]

It looks like they will try to get taxpayers from other states to bail California by going to the Federal Government for relief.

Problem is, most other states are in trouble as well.

[Feenix566]

Thanx for that post fr33domfightr :)

It's only a matter of time before the whole system comes crashing down. The sad part is that most people will have NO IDEA how it happened, because they've been told by Keynesian economists for years that spending is great and saving is bad.

[dannno]

It doesn't take a lot of hard work to balance the budget. I could balance California's budget before I finish my Cherios in the morning. All it takes is pissing off a whole lot of people who depend on the nanny state.

Look, Ron Paul has said that the LAST place he would cut the budget is for people who are dependent on government programs, and that's Federal programs. You're saying that's the FIRST thing you want to cut in a state budget?! I agree they should cut benefits for non-citizens, but the erosion of the middle class and destroying the wealth of poor people is cause by this system, why would you want to hurt those people first?

Property taxes suck everywhere, but I live in California and my state income tax is like 1/10th of my Federal Income tax.

If we ended our overseas empire and cut major federal government organizations like the DOE, DEA and FDA then we could bring taxes down far enough to where state taxes (other than property tax, which I completely disagree with) are manageable. Once we pull ourselves out of this downtown, we could then think about beginning to cut these programs. Then people with their prosperity will have the means to help the downtrodden.

[LittleLightShining]

Look, Ron Paul has said that the LAST place he would cut the budget is for people who are dependent on government programs, and that's Federal programs. You're saying that's the FIRST thing you want to cut in a state budget?! I agree they should cut benefits for non-citizens, but the erosion of the middle class and destroying the wealth of poor people is cause by this system, why would you want to hurt those people first?

I agree with you here but there are some things to keep in mind. Part of the way the Democrats stay in control is by increasing social services so that more and more people become dependent on them.

I'm not surprised that the teachers' and state employees' unions are putting up a stink in CA. They're doing the same thing here in VT.

Budget cuts can be made in a number of areas. How about instead of a 2 day/mo unpaid leave the state goes to a 4 day week for all non-essential services? How about cutting legislators room and housing allowances? No, they won't solve the problems but every little bit helps. Teleconferencing anyone?

What about funding for non-profits? If a non-profit can't exist without the govt it needs to reassess what it's doing. If the services they provide are so essential you'd think the market would provide for it.

I'm so sick and tired of spineless legislators. Make the frickin cuts.

[fr33domfightr]

I agree with you here but there are some things to keep in mind. Part of the way the Democrats stay in control is by increasing social services so that more and more people become dependent on them.


They also do it with Gerrymandering. They draw legislative district boundries such that it gives dems or repubs a majority, thus maintaining power.

Fortunately, California (barely) passed a ballot intiative thats supposed to stop gerrymandering. After the next census, in 2010, new lines are to be drawn up, using the new method. With some luck, things should start to change after that. The Dems fought against this intiative too!!


FF

[LibForestPaul]

Someone should have told the PRC that socialism just doesn't work. :p :rolleyes:

They know. They don't care. 1 billion plus - 1 dead Chinese = still too many!:eek:

[Truth Warrior]

They know. They don't care. 1 billion plus - 1 dead Chinese = still too many!:eek: I think you are correct. ;) :(

[xd9fan]

with all due respect, Cali can rot in hell

[Danke]

with all due respect, Cali can rot in hell

What will happen to all the fruits and nuts?

[jack555]

No, he's probably positioning himself to overturn Prop 13, which keeps property taxes low for people who have been in their homes for a long time.


And by low we mean still high (imo I can't believe what my parents pay and they bought the house at 1/4 its value). Just not like raping you so you MUST sell your house high.

[Pauls' Revere]

Think I'll go surf...or somethin
:D

WEEE !!