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California is Broke
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softaire
01-Jul-09, 07:39

California is Broke
The California legislature failed to pass a budget last night that balances the $24 Billion shortfall. Therefore, California will now start issuing IOU's rather than paying its' bills. How long this will continue is unknown but the last time it happened (around 1998 I think) it lasted a few months.

I think I have heard that there are 44 state governments with budget deficit shortfalls looking for the U.S. government to bail them out. The U.S. government is heading in the same direction... spending money it does not have.

Does anybody think this is fiscal responsibility or a good thing to do? Does this make sense to anybody?
anomalocaris
01-Jul-09, 13:11

Ah hell
just print more money. Didn't we just borrow a trillion dollars to get out of debt?
illinawek
01-Jul-09, 13:58

I think they need to shut down the Universities and empty out the Prisons, and let Californians reconsider whether they like Government services and are willing to pay for them.
anomalocaris
01-Jul-09, 14:00

Ill
All the convicts would just end up lost in L.A.
chessnovice
01-Jul-09, 14:27

...
The UC schools could easily go private and still flourish just fine. Were the drug laws not so obscene, the prisons full of drug "offenders" would probably not be so difficult to manage.

The problem in California isn't that Californians are unwilling to pay more.
softaire
01-Jul-09, 21:17

chess
A lot of the problem IS that Californians are NOT willing to pay more taxes. We are already the most heavily taxed state (except perhaps New York). We just recently, roundly defeated a bunch of new tax propositions in a special election.

Fully 50% of our $24 Billion budget deficit could be resolved by NOT paying for illegal aliens. The money paid for welfare, food stamps, education, incarceration, and health care annually is now $12 Billion.

If we simply enforced the immigration and employment laws, those illegals would return home and their jobs would be available to citizens and legal immigrants.
chessnovice
01-Jul-09, 22:36

softy
Well, I meant it in a different sense. The source of the problem isn't coming from the Californians. It's largely the people governing the Californians.

There is a lot of legislation that is wrong in California. I wanted to originally reply to you saying what the problem is, but it's hard to really find where to begin. In a way, it sort of reminds me of when I heard about people in New Orleans who used to joke before Hurricane Katrina about how the levies wouldn't hold. The right approach is to chop the bloated spending and repeal the legislation that is unnecessarily costly or chases people and businesses away. But it's become politically dangerous to do the right thing, because inevitably some group of people will be angry about not being to breastfeed off the state.
chaz-
02-Jul-09, 06:27

...
... is it all partisan issues in CA? ... is Arnold up to the job? ... from where does courage need to manifest itself?

I get the idea the "problem" needs to get a lot worse before the public has the right appetite to acquiesce to fixing it. Many steps could have already been taken and haven't been. There is so much bickering!
softaire
02-Jul-09, 11:13

Chess... you are exactly right. About 2 years ago, Arnold sponsered and backed four propositions that would have either done that or severely cut spending. The unions and special interests rallied public support (remember those were the days of "Hate Bush" and growing liberal political might) to defeat all of them.

Since that time, he has been a good, compliant Democrat, until just recently when he vowed to veto any budget that did not address ALL the problem. If he sticks to that, we may be in for a lot of IOU's but that is taking some courage. He could have accepted a few minor changes and gone from bad to worse.

Chaz... Good question up until recently (see above). I don't think it gets much worse than the state issueing IOU's. The only reason there weren't riots last time is that most banks accepted and held the IOU's for the public, as if they were cash, and then later redeemed them from the state. That may or may not happen this time, especially if it lasts a long time.

chessnovice
02-Jul-09, 12:23

chaz
The governors of California, for how much heat they always get for it, are generally pretty powerless when it comes to California's financial problems. Arnold has been about as good a governor as he can be, at least trying to come up with ways to try to resolve or alleviate the issue. But the place where (as you say) courage needs to manifest itself is the state legislature. That's where the restrictions and expensive projects came from, and that's where they are able to come to an end. Even though seeing the state government pay with IOU's is an outrage, this is something that's been coming for a very long time. The spending waste only seems harmless until the bill arrives.

And since the original post extrapolated California's current problems to America's impending problems (an accurate comparison to make, I think), the same generally holds true at the federal level. It's hard to hold Obama responsible for financial issues when so much of that has to do with the irresponsibility of the legislative branch. I do think the ideas he supports, like the increasingly controversial bailouts, are dooming us to real trouble in the future. But the blame doesn't land squarely on the person making calls to try to get people to accept the crappy idea. The blame lands on the Senators and Congressmen who vote in favor of them. Getting rid of those schmucks, particularly since they're less publicized in the matter, is more difficult to do.
softaire
03-Jul-09, 23:18

Chess
Exactly right once again.

It is the House of Representatives that initiate Financial Bills and it is the Senate that confirm or deny Presidential appointments, such as Judge Sotomayor. Other than that, when one of them approve legislation, the other body has the ability to vote it approved or rejected. Neither the Courts, nor the President, are able to approve and pass ANY legislation.

ALL laws of the land are approved by BOTH the House and then Senate. And, ONLY the House and the Senate can approve them. The president could veto them and the courts could determine them unconstitutional, but ONLY the house and Senate can make them law.

ALL of our ridiculous spending is due to the House and the Senate passing stupid legislation, which they do not bother to read. Any law you feel is stupid and unconstitutional stems from BOTH the House and the Senate. They are in Cahoots together in these matters.
chaz-
04-Jul-09, 07:10

...
... can we enact laws against petty partisan bickering? ... we seem to enjoy self righteous attitudes over compromise and priority action. Both the D's and R's are guilty of this ... will the public even care until some 'essential' service/program actually falters? It seems to be a game of multiple gauntlets among teenagers with dangerous weapons. CA is not the place to be right now ... they could find themselves legislating from the street.
illinawek
04-Jul-09, 22:06

Its my understanding (correct me if I am wrong) that California needs a two-thirds majority in the legislature to raise taxes.

Great idea.
kingofpawns
06-Jul-09, 15:46

Chess
>>>The UC schools could easily go private and still flourish just fine.<<<

This is not correct. To go private, the UC schools would have to charge $25,000 (currently
out of state tuition) across the board. Many if not most students would have to drop out
because the UC schools do not have large endowments that can provide large support for
needy students. The UC schools are going to try to wean themselves off of the 12% support
they now get by moving more towards a University of Michigan or University of Virginia
model where you increase out-of-state enrollment. In the long run, I see the UC system as
going from the best public university system to one of the worst over the next 10-20 years.

>>Were the drug laws not so obscene, the prisons full of drug "offenders" would probably
not be so difficult to manage.<<<

>>>The problem in California isn't that Californians are unwilling to pay more. <<<

I agree with this.
kingofpawns
06-Jul-09, 16:19

Softie
I have noticed that your politics have changed rather dramatically this year.
You used to come across as politically more moderate, but you have definitely
fallen of the right of the cliff in my view. You complain a lot about wasteful spending
and I think no one here favors wasteful spending, but what would you cut that would
make a difference. If you look at the chart below for 2007, you will see that really
the only way to make dramatic cuts are to cut social security, medicare, the military,
and unemployment insurance. Should we dramatically cut these?

And take the state of California. What do you really want? A state with a 3rd world
education system? You also better hope you have no medical emergency, because
what emergency rooms remain in the future in California will be overwhelmed with
crazy people and people with no other medical access.

I'm not saying taxes are the only solution, but cuts only lead to a downward spiral.
The California deficit is around 26 billion now. If we take 26 billion out of the California
economy, that will lead to lower tax revenue and more deficits this fall. My guess another
10 billion, which if cut out of the economy will lead to further tax revenue deficits. At that
point we would have to consider some drastic measures such as closing police and fire
departments. Closing K-12 schools, community colleges, and universities and limiting
education to those who could afford it. This will lead to further flight from California,
greater unemployment and lower standards of living. Perhaps Californian's deserve it.
But, one has to think through the consequences of what they propose.

Just like simply raising taxes is also problematic. More taxes means less spending, which
also worsens economic conditions. The only reasonable solution (and it may not work) is
a combination of cuts and taxes. I think by balancing the two, we have the best chance
to slow this downward spiral in California. Even if there were the political will to arrive
at this solution, there is a good chance it will not work. In which case, I suggest moving
to another state, I certainly am going to keep my eyes open for an opportunity to leave
over the next few years.
softaire
06-Jul-09, 17:47

KOP
I am not moving to the Right, but America (and California) are moving to the Left.

You know what is going on in California... you live and work here. The Democratic legislature has increased spending (and it was all signed by Arnold) despite falling revenues. We got rid of Gray Davis because that is what we were doing back then, and it was recognized that it was suicide.

Arnold did try to combine spending cuts with moderate tax increases but special interests and the unions got it shot down. Since then, there has been no spending bill he would not sign.

The utilities are now being forced to raise rates because of the previous "global warming" legislation passed. That will be passed along to all consumers... rich, medium, and poor alike. That will take money out of their pockets, reduce spending, cause further layoffs, reduce business tax revenues and cause hikes in tax rates...

Is it any wonder businesses and "rich" people are leaving the state?

You asked for my solution:

1. Enforce the labor and immigration laws currently on our books now. This will give jobs to legal American citizens and legal immigrants who will have money to buy things and pay taxes. (Most money earned by illegal immigrants leave the country, btw, and does us NO good).

2. Enforce the labor and immigration laws currently on our books. This will reduce substantially the strain on our education, health care, incarceration, legal, and welfare systems. Illegal immigration now accounts for 1/2 (50%) of our budget deficit.

3. REDUCE Taxes. Become Business Friendly to attract business (jobs) to California rather than to export them to Arizona, Nevada, China, India etc.

4. REDUCE Taxes. When businesses invest tax revenues for the state go up. When tax rates go up, businesses do NOT invest and tax revenues go down.


There are many other things that could be done, but these are some major ideas. They work. What do you think of those ideas?


chessnovice
06-Jul-09, 20:49

...
Instead of focusing on where we disagree, I'll just enjoy the rare instance where we do agree. :]
chaz-
06-Jul-09, 21:17

Softie ...
... does it bother you that you seem to be in the minority most of the time? ... or is it your mission to educate everyone on the issues (like this one)? ... or are you trying to stimulate debate on your points?
kingofpawns
06-Jul-09, 21:43

Softie
What is this obsession with taxes? I don't want to pay unnecessary taxes, but to simply cut, cut, and cut is truly suicide. If we try to simply cut our way out of the deficits we face in California,
we will permanently lose any competitive advantage. No body will want to live here.

What evidence do you have that illegal immigrants are taking away jobs from Americans?
This economic depression wasn't caused by illegal immigrants. Look to Wall Street for
the cause. If Californians are suppose to take the few jobs illegal immigrants are doing, we
truly will be a third-world country.

I would like to see the facts supporting the statement that illegal immigrants account for
50% of the California budget deficit. This makes no sense since the deficit is the sudden
drop in tax revenues. How did illegal immigrants do that?

Reduce taxes for he rich and businesses? They already pay less then most counties in
the Western world. This is because of all the tax breaks and loop holes open to the
rich and big business. Here is something to think about: Why are we losing our
capitalistic competitiveness with Western European countries, where taxes on business
are hire, there is universal health care, free or nearly free education, and more extensive
social welfare systems? This should be impossible in libertarian-capitalistic views of
capitalism but that is because they fail to compute the costs and benefits. Businesses
can have a considerable advantage if they don't have to pay health care costs for employees,
reduced retirement benefits, or worry about having an educated work force.

Finally, if your theory about business tax investment is correct. Why were things going
fine and then suddenly tax revenues went down before the legislature raised sales tax
and income tax?

Do you see why I don't buy your reasoning?
softaire
06-Jul-09, 22:11

Kop
I'll try to get my answers together for you... but not tonight. There are actually some references, somewhere, but in most cases you will just have to accept my opinions as I accept your opinions, and we will argue against each other till we are blue in the face. But, I don't mind that... it makes my arguments better (hopefully).

Chaz... I'm hoping to convince some people of the legitimacy of my opinions and seriously consider that these ideas are better than the alternatives which are being forced on us, rapid fire, every day now. Hopefully, people will start writing and calling their representatives, senators, and state legislators because we are seeing (in my opinion) the destruction of the U.S. economy, social structure, and very way of life... not for the better.
snowdog2112
07-Jul-09, 04:33

legalize pot. 'nuff said.
chaz-
07-Jul-09, 07:57

Softie ...
... trouble is, amigo, a great deal of change is inevitably upon us ... it is less a question of holding on to something we have always cherished than it is being adaptable to the frontiers that are already upon us up the road here. So ... your opinions may indeed be legitimate, but they remain a tad naive ... IMHO. Y'see, I don't disagree with you about the rear view mirror ... but I'm having to deal with the guys in front who won't turn down their high beams ... and I guess we disagree about what we see.
softaire
07-Jul-09, 11:31

Kop- cost of illegal immigration
I couldn't find again the reference I had in mind, but it was more current than this one so that might explain the difference in dollar amounts of burden because of illegal immigration.
*******************************************************************
California’s Illegal Aliens Cost Taxpayers Nearly $9 Billion A Year
July 3, 2008 by morganwrites

FAIR has released their latest report on the costs of illegal aliens to taxpayers. The main costs are in education, health care and prison costs for illegal aliens in jail.

California’s nearly 3 million illegal immigrants cost taxpayers nearly $9 billion each year, according to a new report released last week by the Federation for American Immigration Reform, a Washington, D.C.-based group that promotes stricter immigration policies.

Educating the children of illegal immigrants is the largest cost, estimated at $7.7 billion each year, according to the report. Medical care for illegal immigrants and incarceration of those who have committed crimes are the next two largest expenses measured in the study, the author said.

Jack Martin, who wrote the report, said Thursday that the $9 billion figure does not include other expenses that are difficult to measure, such as special English instruction, school lunch programs, and welfare benefits for American workers displaced by illegal immigrant workers.
“It’s a bottom of the range number,” Martin said.

FAIR drew from the U.S. Census report and other sources. This study matches an earlier study By the Center for Immigration Reform (CIS) that I reported on (see: “Latest Report: Illegal Aliens Cost Taxpayers $10 Billion A Year” from Sep. 4, 2004). Of course you can’t do any straight reporting on this issue without having some pro illegal alien advocate group playing the race card once again to justify the illegal behavior of these people who suck dry our tax system and run emergency rooms into bankruptcy.

Gerardo Gonzalez, director of Cal State San Marcos’ National Latino Research Center, which compiles data on Latinos, criticized the report. He said it does not measure some of the contributions that immigrants make to the state’s economy. “Beyond taxes, these workers’ production and spending contribute to California’s economy, especially the agricultural sector,” Gonzalez said.

Immigrants, both legal and illegal, are the backbone of the state’s nearly $28 billion-a-year agricultural industry, Gonzalez and other researchers say.

More than two-thirds of the estimated 340,000 agriculture workers in California are noncitizens, most of whom are believed to be illegal immigrants, according to a 1998 study on farmworkers prepared for the state Legislature.

Local farmers say migrant farmworkers are critical to their businesses, and without them they would have to close their farms or move their operations overseas. These advocate groups really don’t have a leg to stand on. The only arguments they ever try to use is racism or that all these fact based reports are wrong and that the production of these illegal aliens is higher than if a legal worker earning a decent wage and didn’t require all the tax sucking benefits.

Martin disagrees. He said illegal immigrants displace American workers by taking low-skilled jobs, keep wages low by creating an overabundance of workers and stifle innovation by reducing the need for mechanized labor.

“The product of the illegal immigrant is not included (in the report) because if that is an essential product it will get done one way or another,” Martin said. Employers “would have to pay better wages or invest money on mechanization.”

Martin’s study looks specifically at the costs of educating illegal immigrants’ children, providing medical care to illegal immigrants and jailing those convicted of committing crimes. The report estimates the total cost at $10.5 billion each year, but that is offset by about $1.7 billion in taxes that illegal immigrants pay.

OK, sounds pretty backed up by facts. Sounds reasonable. So what could the advocates for illegal aliens possibly say about this report and its facts?

“I think FAIR is without doubt an extremist organization that tries to portray itself as a mainstream group,” said Christian Ramirez, director of the San Diego office of the American Friends Service Committee, an advocate group for legal and illegal immigrants.

Good rebuttal there by a representative for illegal aliens.

The article goes on to break down the numbers in the report further. Go read it for specific numbers. One that stands out though is the estimated $7.7 billion in education spending for illegal alien children. Having kid in Californian schools I can attest to the huge class sizes, low student-to-teacher interaction and the extraordinary amount of time wasted on those students who can’t speak English fluently enough.

So while the dollar number is $7.7 billion, the overall costs to actual legal citizens of this country’s children who pay for these schools is immeasurable.

Martin said states bear most of the cost of illegal immigration.

“State costs are much higher on a per capita basis because of the fact that the largest expenses are medical care and education and those are borne at the local level, not the federal,” Martin said.

In this time of California’s budget crisis this should be priority one in reducing expenses in the state.
softaire
07-Jul-09, 11:42

Chaz
I know you have been in a place and time where the "in-coming" was horrendous and unending. I don't think you ever thought to gave up and surrender. I don't understand your willingness to roll over now, especially when you seem to agree with me more than not.

I see the country heading in the wrong direction in several different areas but it is NOT a done deal yet. The train can be turned. It is not yet time to give up and surrender (acquiesce).

I don't think it is a matter of holding on to the "cherished past". It is more a matter of looking to protect the future from bad judgements made here in the present. It's a matter of presenting viewpoints and hoping somebody agrees and decides to take action and notify our legislators.

That really is what it means to be a citizen, no?


chaz-
07-Jul-09, 18:56

Softie ...
Indeed, I admire your intentions, I appreciate where your 'heart' resides. Still, for most of us, our strengths lie more in our arms and legs (our personal impacts) and our own character to do the things that make a difference in the here and now. It isn't to lament about yesterday's glory lost or perpetuate unsustainable models. Neither you or I can likely change this train's course, Softie, but I'm not giving up either (Semper Fi !!), I'm not rolling over. I just consider which battles I cannot win, and which I might. Just like global warming/cooling, just like the rise/fall of the Roman Empire, just like advance/retreat of the Crusades, humankind evolves in perpetual cycles (even the U S does this). It's naive to say any component is imune to these cycles. If you wish to extend U S glory further, then I respect your opinion. Or, if we recognize cycles for what they are, we can also choose to adapt to wherever we happen to be in that cycle ... protecting the most precious assets humans (not necessarily Americans) can extend. We can talk about personal impacts if you like but that's a different subject I s'pose.
softaire
15-Jul-09, 12:15

Three weeks now into the Budget stalemate and banks are NOT accepting California IOU's. The good news is that there is talk of stopping all benefits, except emergency services, to ILLEGAL aliens.
chaz-
15-Jul-09, 12:49

Softie ...
... the Calif crisis shall produce some collision of standard practices, that's for sure ... this will be interesting to watch ... at a safe distance.



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