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Budget crisis: Is California too big to fail?
- Thread starter S2007S
- Start date
Quote from S2007S:
â 80 percent of state parks would be closed, 25 in the Bay Area alone, including several beaches along the peninsula. Park visitors spend an estimated $2.6 billion a year in and near state parks, but closing the parks would save only .26 percent of the $24 billion deficit. (SF Chronicle)
Schwarzenegger is a complete failure.
He's been in office for a number of years now and hasn't forged one single important relationship in the legislature. His leadership abilities are horrible.
Meanwhile, his above "cut-back" ( to State Parks ) makes no sense whatsoever and sends local businesses even further over the cliff.
For every $1 spent supporting the State Park system, $2.35 is returned to the State's General Fund in the form of economic activity from park visitors.
Arnhold obviously failed at Math back in Austria.
Quote from Illum:
"How did California dig itself such a huge hole? The recession certainly didn't help, but Time's Kevin O'Leary writes that California's financial troubles can be traced back to the passage of Proposition 13 in 1978. An antitax measure, Prop 13 makes it extremely difficult to raise taxes or pass a budget unless a 2/3 majority in both state houses agree â a virtually impossible task."
This is annoying. They blame lack of taxes, and not the huge amount of spending. Whatever with these big gov babies. This time they have spent way too much and have to suck it up. They have no choice but to cut spending.
They also fail to mention that Prop 13 was a reaction to out of control spending and tax increases 30+ years ago.
This same kind of thing happened in the state of New York (where I live) several years ago. State could not balance its budget. I remember they closed about 80% of the DMV offices, resulting in many hour waits for routine drivers license renewals. Eventually they allowed people to take an eye test with their own doctor and renew their licenses by mail. Lots of other state offices shut down as well. After a few weeks of this, the powers that be decided the solution was to raise sales taxes another 0.5%. They did this and things have been back to "normal" ever since.
I bet something very similar to the above happens in California. A few months from now, things will be "back to normal" there as well, except there will be more taxes on something (sales tax probably).
Bettles
I bet something very similar to the above happens in California. A few months from now, things will be "back to normal" there as well, except there will be more taxes on something (sales tax probably).
Bettles
Quote from bettles:
This same kind of thing happened in the state of New York (where I live) several years ago. State could not balance its budget. I remember they closed about 80% of the DMV offices, resulting in many hour waits for routine drivers license renewals. Eventually they allowed people to take an eye test with their own doctor and renew their licenses by mail. Lots of other state offices shut down as well. After a few weeks of this, the powers that be decided the solution was to raise sales taxes another 0.5%. They did this and things have been back to "normal" ever since.
I bet something very similar to the above happens in California. A few months from now, things will be "back to normal" there as well, except there will be more taxes on something (sales tax probably).
Bettles
They just increased the sales tax 12% a couple of months ago.
there are some people who love to blame calif's budget mess on the burden of illegal immigration, but why doesn't texas have the same budget problems? despite a lower total tax liability on each citizen, their deficit is manageable and the state is not near financial collapse like calif, and if you've ever been to texas it looks like mexico city.
i have seen statistics that say the total illegal immigration burden on public services in calif ranges from a couple billion per year up to about $10B, and this doesn't include net contributions they make such as lower labor costs or sales taxes paid. so even if calif were able to get rid of 75% of its illegals, it's nowhere near enough to balance its budget. you could even close EVERY park and lay off 100,000 teachers and STILL be over budget.
f*** this legisture and governor, they need to just apply 20% cuts across everything without mercy, and then in addition, address individual areas like illegal immigration and public schools to make up the remainder. their current strategy of laying off a thousand people here and there or forcing legislators to pay for their own cars is total shit. it's being in a sinking ship and using a spoon to remove the water
i have seen statistics that say the total illegal immigration burden on public services in calif ranges from a couple billion per year up to about $10B, and this doesn't include net contributions they make such as lower labor costs or sales taxes paid. so even if calif were able to get rid of 75% of its illegals, it's nowhere near enough to balance its budget. you could even close EVERY park and lay off 100,000 teachers and STILL be over budget.
f*** this legisture and governor, they need to just apply 20% cuts across everything without mercy, and then in addition, address individual areas like illegal immigration and public schools to make up the remainder. their current strategy of laying off a thousand people here and there or forcing legislators to pay for their own cars is total shit. it's being in a sinking ship and using a spoon to remove the water
I wonder if California IOUs are equal to money. IOUs might be a state currency. I think IOU's are money if they are freely exchanged for USA dollars.
http://www.bizjournals.com/twincities/stories/2009/06/29/daily40.html
Wells Fargo will accept California IOUs, for now
Minneapolis / St. Paul Business Journal - San Francisco Business Times
Wells Fargo said Thursday it will accept California IOUs from its retail and business customers until no later than July 10.
âWeâre very disappointed, as are many Californians, that California has taken the unfortunate step of issuing IOUs in lieu of its payments to some businesses and individuals,â said Lisa Stevens, head of Community Banking for San Francisco-based Wells Fargo (NYSE: WFC) in California, in a statement announcing the move. âWe are reluctant to take this step, but are doing so to help our customers who are not at fault.â
The decision was announced a day after Bank of America (NYSE: BAC), the North Carolina-based bank that is the largest banker in California, also said it would accept the stateâs IOUs.
The acceptance means that, in effect, the banks are floating loans to the state for the value of the IOUs. It makes the IOUs as good as cash payments for those bank customers whose banks accept them.
IOU recipients whose banks wonât accept IOUs will have to wait for payment until the state has funds available to make good on the notes.
http://www.bizjournals.com/twincities/stories/2009/06/29/daily40.html
Wells Fargo will accept California IOUs, for now
Minneapolis / St. Paul Business Journal - San Francisco Business Times
Wells Fargo said Thursday it will accept California IOUs from its retail and business customers until no later than July 10.
âWeâre very disappointed, as are many Californians, that California has taken the unfortunate step of issuing IOUs in lieu of its payments to some businesses and individuals,â said Lisa Stevens, head of Community Banking for San Francisco-based Wells Fargo (NYSE: WFC) in California, in a statement announcing the move. âWe are reluctant to take this step, but are doing so to help our customers who are not at fault.â
The decision was announced a day after Bank of America (NYSE: BAC), the North Carolina-based bank that is the largest banker in California, also said it would accept the stateâs IOUs.
The acceptance means that, in effect, the banks are floating loans to the state for the value of the IOUs. It makes the IOUs as good as cash payments for those bank customers whose banks accept them.
IOU recipients whose banks wonât accept IOUs will have to wait for payment until the state has funds available to make good on the notes.
I live in CA. Nice weather. Bloated system.
The state is very liberal. Sometimes it takes a hurricane to come in and throw things into disarray. Only then does spending become controlled. We all want to help everyone, but it's just not possible. Socialism doesn't work. Ask anyone that has had to stand in line for some toilet paper.
CA is just the tip of the iceburg...just as the recent stimulus is just a start. CA represents the fact that the right hand will stimulate, while the left hand will suffocate (Fed will stim, State and local will suff).
The state is very liberal. Sometimes it takes a hurricane to come in and throw things into disarray. Only then does spending become controlled. We all want to help everyone, but it's just not possible. Socialism doesn't work. Ask anyone that has had to stand in line for some toilet paper.
CA is just the tip of the iceburg...just as the recent stimulus is just a start. CA represents the fact that the right hand will stimulate, while the left hand will suffocate (Fed will stim, State and local will suff).
free markets are dead. everything's too big to fail.