Today's Quote:
“The chains of habit are generally too small to be felt until they
are too strong to be broken.” Samuel Johnson
I received an email recently from one of my regular readers, excoriating me for being such an idiot.
The fact that California is known as a liberal state is not causing their budget problem. It is the fact that they have a conservative Republican governor. The federal government has offered to bail out California and solve their immediate problem. Schwartzenegger turned the money down. he is an arrogant incompetent asshole who thinks because he is married to a Kennedy he deserves higher office.Get the facts straight before you diagnose the problem. meanwhile, gold is crashing, oil is collapsing and the dollar is strengthening against other currencies as demand for our treasuries is higher than ever, despite idle threats by the chinese to diversify.
See? Just take money from Tennessee, Texas, Illinois, North Dakota, etc... and give it to California... and presto! Problem solved.
Does anybody over the age of 7 really think Arnold did this? This is a perfect example of the problem with our body politic - Anger. Not a shred of rational thought.
Oh, and BTW dear reader... The US$ is near a 9 month low, and not too far from its all time low. And while I think it may rally here, I better be right - or this is it.
Gold crashing? Hmm..... 10% form its all time single tick high? Talk about getting your facts straight...
Oil crashing? I guess if you compare WTI to its single day high of $147... but commoditiy prices as far as economic impact goes are measured in average price per YEAR, and by that measure Oil in 2009 is at its 3rd highest - ever. And this is during the worst recession in nearly 100 years...
I have sent out ticklers to all of my Left leaning friends, Wall Street associates and contacts, and my readers (about 2000 unique visitors per month) asking them how to fix California... so far I have recieved 2 responses... both say to have Obama bail California out.
California over taxed its population to give "fair" compensation to its state employees... and they have bankrupted the system. Please, PLEASE!!! Show me how to fix it! Show me how its done!
Sometime in the next few years, the US$ will lose its reserve status. Then we will find out what WE truly wish to pay for, and what we can afford.
10 comments:
My take on it:
Bail out California by allowing California to declare bankruptcy so that it can modify all existing contracts with public employees and unions, including the modification of exorbitant retirement and health benefits.
The state gov't should be required, by the bankruptcy judge, to contract to the point that it handles those functions that the private sector cannot handle... security, public infrastructure, and welfare of some kind for the indigent. All entitlements should be eliminated except those that provide for those who cannot provide for themselves.
All municipalities should also be allowed to go bankrupt and emerge from bankruptcy in a good fiscal position.
As I have said, the majority of state spending is education and human services. The Federal govt also has untouchable programs (social security, etc). The states are just being impacted faster because they can't print/borrow money as fast as the Federal govt. can. But the problem is the same .... nobody wants to cut "uncuttable" spending. That is the problem in California (and in my state, Illinois)
(Government salaries and benefits, both state and Federal, are not small, but they pale in comparison to government benefits sent out to taxpayers.)
Bureaucrat:
Your take on the IMF taking on the US$ as world reserve currency?
Better to ask your Scientist those theoretical questions. :) On the one hand, massive borrowing and printing can't be very good for the U.S. dollar long term (history also says this is bad, bad, bad). On the other hand, Mish would say that the world seems to flee to the U.S. dollar every time it rains, so it has "nowhere else to go" strength. IMF? The solution for anything? So I would say .. diversify?
I don't know enough about California and its finances to make a sensible detailed comment, so here are some generalities;
California seems the be the US in microcosm; if your readers (or anyone else)can't think of a way to save California, ......!
It seems irrelevant to blame left and right for the mess. Tell me, which democratically elected governor, state or national government has suggested cutting expenditure, balancing the budget and creating a sustainable 20 year plan for finances? Did I miss something?
Lastly, in your and other people's comments is an underlying assumption; there is something that can be done to fix things, if only someone can think what it is. But sometimes things (California or the USA in general) simply can't be fixed. Then it is more to do with preparing yourself (as individuals and families)for the likely scenarios, and get your head down!
In theory there is a way to solve their current problems. 'Reboot'
Donal!
Always the thinker.... but a you can't help it - you lean Left in thought (as I lean my way)...
Yes CA is THE microcosm of the US, and to answer your question... many states with little no income tax have are in infinitely better shape than CA, and...
as you point out, CA is THE influence in the US and has successfully exported its economic/political agenda - to the detriment of all who followed.
That's ok Greg, always happy to try'n help our wayward ex-colonials when they get themselves in a mess! :-)
thanks for sharing.......
___________________
Sharon
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