California on the brink - $20B deficit next year?

[glenn1]

Looks like everything is coming up snake-eyes for California. Will be an interesting exercise to see what happens when an irresistable force (politician's desire to spend money) runs into an immovable object (lack of money and inability to borrow more). While I'd be like to see deep cuts in spending, it's probably not going to happen. Eventually though, creditors will no longer be willing to lend, and that's when the state will need to face the music.

Story link

 

[Fear No Evil]

Originally posted by: glenn1
Looks like everything is coming up snake-eyes for California. Will be an interesting exercise to see what happens when an irresistable force (politician's desire to spend money) runs into an immovable object (lack of money and inability to borrow more). While I'd be like to see deep cuts in spending, it's probably not going to happen. Eventually though, creditors will no longer be willing to lend, and that's when the state will need to face the music.

Story link

Sounds like exactly what Obama is trying to do with the country as a whole.

 

[woodie1]

Originally posted by: Fear No Evil

Originally posted by: glenn1
Looks like everything is coming up snake-eyes for California. Will be an interesting exercise to see what happens when an irresistable force (politician's desire to spend money) runs into an immovable object (lack of money and inability to borrow more). While I'd be like to see deep cuts in spending, it's probably not going to happen. Eventually though, creditors will no longer be willing to lend, and that's when the state will need to face the music.

Story link

Sounds like exactly what Obama is trying to do with the country as a whole.

But on a much grander scale.

 

[Double Trouble]

Originally posted by: glenn1
Looks like everything is coming up snake-eyes for California. Will be an interesting exercise to see what happens when an irresistable force (politician's desire to spend money) runs into an immovable object (lack of money and inability to borrow more). While I'd be like to see deep cuts in spending, it's probably not going to happen. Eventually though, creditors will no longer be willing to lend, and that's when the state will need to face the music.

Story link

There will be no real cuts in spending in Cali, the feds will print as much money as needed to pour it into California. It's not a coincidence that the Governator is the biggest Obama fan around -- he knows he's going to need fed help, and lots of it.

All partisan hackery aside, one really wonders if the country as a whole is not going to face a similar situation at some point if we (as a country) don't learn to reign in our spending.

 

[babylon5]

There is no stopping once you got the magic money printing machine

 

[ProfJohn]

The end result of runaway spending is actually predictable.

As we borrow more and more money the cost of borrowing will go up via higher interest rates.

Higher interest rates will make it more expensive for the public to buy cars and houses.

Eventually the public will wake up to this fact and say WTF?! And demand a change in Washington.

And then things gets VERY interesting.

 

[ZeGermans]

fucking LIBERAL BASTION *still has 5th largest economy in the world single-handedly*

 

[ProfJohn]

Originally posted by: ZeGermans
fucking LIBERAL BASTION *still has 5th largest economy in the world single-handedly*

Well since it has a population larger than all but 35 countries that would make sense.

 

[brandonb]

Anybody want to speculate on why California went from a huge powerhouse of a place to the brink of collapse in about 20 odd some years?

Liberalism? Illegal Immigrants? Companies offshoring? Republicans? Democrats? Shitty politicians in general?

(I vote for the last)

 

[nullzero]

If anything CA is a good representation of what will happen the the rest of the U.S.

 

[Double Trouble]

California is a good example of what happens when you mix unbridled spending with populist legislation, unlimited illegal immigration, and stupid greedy politicians. R's, D's, they've been equally stupid in California, they've teamed up to drive the state into the ground.

 

[miketheidiot]

Originally posted by: brandonb
Anybody want to speculate on why California went from a huge powerhouse of a place to the brink of collapse in about 20 odd some years?

Liberalism? Illegal Immigrants? Companies offshoring? Republicans? Democrats? Shitty politicians in general?

(I vote for the last)

probably something about its economy imploding.

 

[jpeyton]

On the brink of what?

 

[babylon5]

Originally posted by: jpeyton
On the brink of what?

running out of bling

 

[Double Trouble]

Originally posted by: jpeyton
On the brink of what?

I'm thinking he means on the brink of collapse... but like I've already posted, that won't happen because the feds will print as much money as is needed to keep Cali running.

If California was a company, it would be bankrupt and it would not be able to raise any more capital. However, since it's backed by the (essentially limitless) federal treasury, people continue to lend money to the state. What incentive is there for the state to actually fix anything?

 

[Slew Foot]

See sig

 

[BoomerD]

Just ONE of Kahleeforneeya's budget problems is the state's "governing by proposition."

Dammed near anyone who can collect enough signatures on petitions can get an idea sent to a vote by the people. It doesn't need to have a clear funding source, nor does it need to provide a revenue stream, it just needs to get the magic 50% + 1 to become law. (2/3 for constitutional amendments)

All too often, a proposition comes along that SOUNDS like a good idea...until it comes time to pay for the "benefits of that law."

I still support Prop 13 for homeowners, but do believe it needs some modification for businesses. Very few businesses get re-assessed when they're sold due to a variety of legal manuevers.

 

[AreaCode707]

California is completely fucked up governmentally. I love the state, want to move back there and live there for my entire life but man, they could not make anything more difficult for employers and revenue producers. I've got friends that are grape-growers and the idiot government is so radically into controlling the water supply that they want to drain their irrigation pond. Hey, yeah, let's grow 80 acres of grapes, the county's prime source of income, without water!

I work in Washington state currently and I've been part of corporations that set up call centers, etc. They avoid CA like the plague because of the union-friendliness, because of the tax issues, etc. California just shoots itself in the foot.

 

[Drift3r]

Originally posted by: AreaCode707
California is completely fucked up governmentally. I love the state, want to move back there and live there for my entire life but man, they could not make anything more difficult for employers and revenue producers. I've got friends that are grape-growers and the idiot government is so radically into controlling the water supply that they want to drain their irrigation pond. Hey, yeah, let's grow 80 acres of grapes, the county's prime source of income, without water!

I work in Washington state currently and I've been part of corporations that set up call centers, etc. They avoid CA like the plague because of the union-friendliness, because of the tax issues, etc. California just shoots itself in the foot.

In regards to the water issue. The Southern half of California was basically was built upon dry desert brush land and sand dunes. Northern California is the main source for California's water generation but the main consumers are the cities (especially in the dry Southern parts of California ) and farmers in San Joaquin Valley. The larger the demand in places like San Diego, Los Angeles, etc.. the more you will see conflicts in regards to water usage in the state where water is the life blood for every aspect of its existence. This is especially true during drought years.

.

 

[Acanthus]

California was hit harder than any other state by the housing bubble.

Their revenue will recover as the economy turns around again.

 

[Craig234]

Originally posted by: brandonb
Anybody want to speculate on why California went from a huge powerhouse of a place to the brink of collapse in about 20 odd some years?

Liberalism? Illegal Immigrants? Companies offshoring? Republicans? Democrats? Shitty politicians in general?

(I vote for the last)

The move from good Democrats ruling under the old rules to a string of Republican governors, prop 13 and too many 2/3 requirements.

Pat Brown was a very good governor who lost to Ronald Reagan largely because of the blood thirst for executions; before him was Governor Earl Warren who was so well thought of that he was the nominee for governor of both the Democratic and Republican parties. Now we have radical Republicans who prefer to sacrifice the state out of spite than to compromise with the majority Democrats, and to abuse their ability to obstruct.

Illegal immigrants cause some problems and provide some benefits.

It's still the best state by far IMO.

 

[Craig234]

Originally posted by: AreaCode707
California is completely fucked up governmentally. I love the state, want to move back there and live there for my entire life but man, they could not make anything more difficult for employers and revenue producers. I've got friends that are grape-growers and the idiot government is so radically into controlling the water supply that they want to drain their irrigation pond. Hey, yeah, let's grow 80 acres of grapes, the county's prime source of income, without water!

I work in Washington state currently and I've been part of corporations that set up call centers, etc. They avoid CA like the plague because of the union-friendliness, because of the tax issues, etc. California just shoots itself in the foot.

There's a reason the school near my house is named after Caesar Chavez. It has to do with his and Robert Kennedy's fight for the grape growers to treat the workers better.

Agriculture in CA - a huge industry - does get a lot of preferential treatment and seems to waste a lot of water in some cases.

You can have your low-pay call center, and CA will keep its higher paying employers.

 

[First]

Happens every 10 years. And they get out of it every time.

 

[sandorski]

California, being a huge Economic Engine and also contributing far more to the Federal Budget than it receives, most of the time, seems to be a no-brainer for a Bailout or temporary Net Receiver of Federal Funds. When the Economy recovers, they'll easily repay the Feds and much more within a few years. Anyone who opposes such an idea is not educated on the situation.

 

[PingSpike]

Originally posted by: woodie1

Originally posted by: Fear No Evil

Originally posted by: glenn1
Looks like everything is coming up snake-eyes for California. Will be an interesting exercise to see what happens when an irresistable force (politician's desire to spend money) runs into an immovable object (lack of money and inability to borrow more). While I'd be like to see deep cuts in spending, it's probably not going to happen. Eventually though, creditors will no longer be willing to lend, and that's when the state will need to face the music.

Story link

Sounds like exactly what Obama is trying to do with the country as a whole.

But on a much grander scale.

Yeah, but the federal government can just print more money. California can't...unless they introduce the Californian Dollar! Problem solved!