Posted by
rycK on Sunday, January 18, 2009 4:47:20 PM
California Sinks into the
Financial Abyss.
The
contemporary practice of politics, easily studied in this innovative age of
instant and comprehensive communication, has shown us a wide range of measures
that, some independently, can annihilate the financial health of any society.
The number of ways to lose in this selected category is legion. One would
conjecture that those who have practiced some form of financial control over
groups of millions of citizens would have identified some reasonable form of
management of taxes, jobs, benefits, and debt. But, no. After all, we have seen
numerous strategies and experiments in dozens of countries fail resulting in
revolution, war, starvation, depression, inflation and moral disintegration.
Why cannot these elected ‘leaders’
manage to find a way to keep away from huge debts and inevitable bankruptcy?
The answer is: because they don’t have to and don’t want to.
The Golden State has now refused to pay state tax refunds as they panic and watch their bank accounts vanish. They are
conserving cash. All this was been predicted by this author.
Not alone in their slide into
economic oblivion they are accompanied by other large states like New York, New Jersey and probably Massachusetts, where the situation is, of course, hopeless.
This hopelessness is based on the Snake Pit Theory of politics wherein those politicians who are apt to lose
anything, however slight, will manage to
make matters terminal by grappling so as to lose everything as they dance around the snake
pit jeering the opposition and daring them to jump across for bloody war. This
is a form of group mental illness that can only be solved by massive loses at
the ballot box in a future election. A good bankruptcy judge might have some
good suggestions too.
Some
comments from reporters on this situation:
“Republicans, whose votes are
needed to pass budgets, are resisting proposals for tax increases.”-- California Delaying
Tax Refunds Amid Cash Crisis Fri Jan 16, 2009 3:09pm EST
“Schwarzenegger, a Republican, has backed some form of tax increase to raise revenues, angering Republican lawmakers, and is pressing
Democrats to cut spending. [Emphasis is mine in all quotes.]
And
from a different source:
“Still, even a governor and Legislature in
perfect ideological harmony would struggle to close a deficit this big.
Consider that $40
billion is the amount the state shells out of its general fund each
year for the public school system. Payroll for California's roughly 230,000
civil servants tallies a mere $18 billion — not including legislative aides or
people who work for the state's courts or university systems. (Those 149,000
additional folks aren't under the governor's control, but even if
Schwarzenegger could fire them, their salaries wouldn't be enough to patch the
$40 billion deficit.)”--How big is California's budget hole? Try these numbers on for size By
Mike Zapler
Mercury
News Posted: 01/15/2009 07:20:07 PM PST
Analysis:
This
averages about $78,000
per employee for the state. The school bill, meaning the state’s part averages $1300
for each of the state’s 30 million inhabitants not counting a few million
illegal aliens here and there. Add local
school taxes to that.
This is
called spending
and it is the root cause of the problems in a place that used to lead the world
in class and innovation but is now a mere containment facility for losers,
perverts and some others who wonder just what went wrong. Spending has caused
this mess and the left refuse to truncate their spending.
A
solution would be to reach some kind of compromise including both some extra
taxation and some strong cost-cutting, but that is not really a solution.
Moreover, this frightful intermezzo will be relived in squalid agony as the
next budget process approaches and will be compounded by the fact that people
are losing their jobs, thus the current tax revenues are and will continue to fall and the situation will become worse.
Apparently,
there is no sober education on debt and its effects on governments available to
these political leaders. Maybe they live outside the box? Maybe they spend too
much time in the sunshine and their brains are cooked. Perhaps the elected
officials in California have never heard of the Great
Depression or are aware that Europe is sinking into some economic morass. Maybe their reasoning powers are shadowed by
clouds of marijuana fumes.
The
prediction here is that the antagonists in this gruesome war will not yield independently and California will go bankrupt and beg for alms
in Washington. Raising taxes will only drive
more taxpayers out of the state and further lower the tax revenues. They MUST stop spending and make some serious
cuts. This mere 40 billion dollar deficit will soar to maybe 50 or 70 billion
next year and to 100 billion or more the year after.
Not to
put all the blame on California, New York State and New Jersey and Massachusetts are all in the same pit. Note,
please, that they are all dominated by far-left, wild-spending liberal
Democrats.
Many will
look to Barack Obama for ‘change’ and he is planning trillion dollar deficits,
per annum, and what does that suggest. The salient difference between the
states and the federal government is that the states, as yet, cannot print
money. That would be the solution to the problem for the rest of us in the
remaining 46 until Washington prints so much that our currency
collapses. But there is a major opportunity here for the entire US financial system to collapse in
chaos. I am not convinced that this is a bad option for the far left. They want
to control everything and if money evaporates then controls will have to be
placed on food distribution and such.
They may
wind up seizing our 401(k)s or giving us a wealth tax if we do not spend enough
in income taxes. They need money desperately and our national personal wealth
is still about 7 trillion dollars so they have a lot of loot to grab. We have not seen the end of this. Failure is
no excuse for higher taxation and taxation is all that the left has left.
We could
wind up looking like Zimbabwe.
rycK
Comments
to: ryckki@gmail.com
The Continuing Collapse of California and other Third World Marxist Economies in the Coming
Depression II.