SF ace says

well, here’s CA austerity measures and final gift from Arnold. This time, I think he doesn’t care. http://www.sacbee.com/2010/05/14/2751461/schwarzenegger-budget-would-eliminate.html
* dramatically scale back in home care.

* eliminate state welfare program (calworks)

* 5 percent paycut, 5 percent payroll cap (?), 5% percent increase pension contribution and cutting one day per month in exchange for leave credit. (5% deferral but must be used and not banked from separation), applies to all state employees.

*eliminate state subsidzied child care.

* no new tax hikes
obviously this is not gonna sit well with the Dems and unions, but this is a once in a generation opportunity to fix CA budget. I suspect in the end, some tax will have to make it’s way into the final budget bill.

At this point, I'm not sure how much more taxes will even help California's budget. They can only soak so much from the top 1-5%. Already a fair amount of upper-middle class and rich are leaving for neighboring states. Taxes also limit growth (and we're having more taxes at the federal level in 7 months), part of the reason Cali's unemployment is so high.

Furthermore, California has always been dangerously dependent on capital gains taxes. We had a major upswing in the stock market and they're still broke. If the stock market flatlines (not even goes down, just stays relatively flat) for a few years, as does the housing market, more cuts are in the future.

The Terminator's budget is a step in the right direction, but the Democratic Congress/Unions will water it down/want more taxes, and California will be in the same shape again next year, despite adding more cuts.

Furthermore, the pension liabilities are a ticking time bomb and will just get worse over the coming years, despite these changes.

Oh, and the stimulus money starts running out soon too. I suspect Cali will be having a budget mess and economic mess through 2013, and housing prices from the bubbly areas may very well be down 75% from the highs.

"At this point, I’m not sure how much more taxes will even help California’s budget. They can only soak so much from the top 1-5%. Already a fair amount of upper-middle class and rich are leaving for neighboring states. Taxes also limit growth (and we’re having more taxes at the federal level in 7 months), part of the reason Cali’s unemployment is so high."

They'll be able to find a few Billion on gas tax and fee disguised as tax if they wanted to. Income tax should be safe.

"Furthermore, California has always been dangerously dependent on capital gains taxes. We had a major upswing in the stock market and they’re still broke. If the stock market flatlines (not even goes down, just stays relatively flat) for a few years, as does the housing market, more cuts are in the future.

The Terminator’s budget is a step in the right direction, but the Democratic Congress/Unions will water it down/want more taxes, and California will be in the same shape again next year, despite adding more cuts."

CA budget will be sustainable at the 80B spending level. That is going to be the bottom. The state finally fugured out that they can't get into the entitilement business like the fed
"Furthermore, the pension liabilities are a ticking time bomb and will just get worse over the coming years, despite these changes."

As long as the members pay for it, I am fine with that. Notice the proposed budget bill asked the members to pick up addtional 5% to pay for their pension.
"Oh, and the stimulus money starts running out soon too. I suspect Cali will be having a budget mess and economic mess through 2013, and housing prices from the bubbly areas may very well be down 75% from the highs."

We're about halfway through the stimulus money and I don't see how the budget can get worst than this. Note that this final budget push devastates the old, poor and the weak, those who rely on welfare and care for those who are in welfare. pretty much does not affect a typical Palo Altan one bit. It is going to create even more dispartity in house price between good and bad areas.

http://www.youtube.com/watch?v=wUBPQoadH2Y&feature=player_embedded#

^ great stuff, thanks. I don't have patience with the MSM, such worm's eye, raw reporting is so much more informative.

so let us summarize. California will threaten the rest of the nation with riots in their streets to extort the federal government for a loan they will never pay back to finance a system that never worked in the first place and greatly favors international venture capitalists.

"I say, let em crash."

thats why its utterly preposterous that CA will ask for money from the federal government. Couple that to the fact that the billionaire Facebook investors who are selling your privacy to marketing companies are not even going to be touched makes it even more ridiculous.

I can't tell you what will happen when we reach that point.

if you Californicators think for a second that these Venture Capitalist billionaires arent paying your faithful politicians (with essentially your money) to leave them alone you need to get off the psych meds!

The Original Bankster says

so let us summarize.

CA bad. AZ good. BA very bad.

tatupu70 says

CA bad. AZ good. BA very bad.

no, you just must have some magic sauce up there in the Bay Area where you can actually claim you are prosperous despite total bankruptcy and ready to ask the rest of the country (and its corrupt leadership) for a handout. Lets see what happens to paradise when you get a dose of reality.

also consider that millions of those welfare recipients aren't even American citizens!

Zlxr says

The Sad and Scary part is that whatever has happened in CA and whatever happens in the future - will most likely spread to other States

well Arizona seems to be doing something about the problem.

Zlxr says

If we cut off Welfare - yes there will be trouble - but some of those people who swarmed CA will start to swarm other States and then we shall see how really big the problem is.

if they swarmed to Arizona they will get shot. Same with Texas and just about every other interior state I can think of in the vicinity of CA except for maybe NM. There simply aren't any resources for them. AZ is not exactly on easy street and we're not about to take in a few million of CA's unwashed masses. It is a matter of fact that we won't be taking in your illegal alien population.

good points about agriculture.

Zlxr says

How are all these armed persons going to tell the difference between a swarming person and a tourist or another poor person?

I don't think you really grasp where our country is currently headed.

The Original Bankster says

I don’t think you really grasp where our country is currently headed.

The problem isn't poverty, it's distribution of wealth & opportunity.

I can agree with you that our present course is straight into the sun. I disagree with you that this course is unavoidable or great sacrifices have to be borne by anyone to change things.

The core problem is that 10% of the population owns ~80% of the wealth -- the top 1% owns ~40%. All social problems fall out from this simple fact.

We are productive enough for everyone's basic human needs to be met -- food, clothing, health, education, local transportation, housing, entertainment. The core problem is that we have become a nation of skimmers. Skimmers on the top banking economic rents in medicine, insurance, banking, financial services. Skimmers on the bottom taking advantage of the welfare state.

We also have skimmers on skimmers, like how Section 8 money ends up in real estate skimmers' pockets every month.

Since 1995, unsustainably low-cost goods from China have papered over the wealth gap. An immense flow of life-improving (albeit low-end) wealth moves through Target, Walmart, etc. every day on the micro level, and at the macro level the PRC is banking this financially-engineered trade surplusfor future uses. I'll be the first to admit that I don't like where this is going and we need to do something about it, but at the same time don't think we can or should win a race to the bottom with the Chinese.

At the end of the day, a "$1200" 3 bedroom apartment need not be rented at that price. Area rents are driven by the money in people's pockets, nothing less and nothing more. I think land values can (and I hope will) serve as a shock absorber of the new economy. Get rid of the price supports and subsidies. Let the values fall to what the market can bear. Liquidate the skimmers.

The way I see it, the bulk of the population has to do interchangeable retail and service-sector jobs. This is all thankless BS, and while the service sector doesn't create hard wealth (trade goods) it does increase everyone's standard of living, through a (rather weak) form of labor specialization. We need more McJobs and less skimmers.

there is absolutely no chance that California will vote in a fiscal conservative. Productive white people are a very small minority. This pattern will continue until you have a crisis.

The Original Bankster says

Productive white people are a very small minority

LOL. True enough. Most white people I come across are involved in real estate, banking, insurance, and other skimmer-type bullshit.

The real producers in this state economy are the minorities busting their ass for low wages in the ag, manufacturing, and service sectors, LOL.

Troy says

Since 1995, unsustainably low-cost goods from China have papered over the wealth gap. An immense flow of life-improving (albeit low-end) wealth moves through Target, Walmart, etc. every day on the micro level, and at the macro level the PRC is banking this financially-engineered trade surplusfor future uses. I’ll be the first to admit that I don’t like where this is going and we need to do something about it, but at the same time don’t think we can or should win a race to the bottom with the Chinese.

Your focus on consumer products is noted. You may also wish to add all the corporate goods, which are also made in China. Im not talking Target/Wall Market stuff here.

Troy says

LOL. True enough. Most white people I come across are involved in real estate, banking, insurance, and other skimmer-type bullshit.

The real producers in this state economy are the minorities busting their ass for low wages in the ag, manufacturing, and service sectors, LOL.

well, if you are a non-minority, you can expect to be taxed, etc. to death.

I never realized that poor white people didn't exist any more. Wow.

whites only comprise 80% of this country. they're hardly significant.

The Original Bankster says

Leigh, people used to do those jobs and support a family. Those jobs had dignity. That was before we decided that ‘Social Media Guru’ was the world most valuable professional. Remember the nice neighborhood butcher? or the local farm stand? can we have those people back please and we can put the Social Media Gurus to work in the coal mines.
Secondly, there is something called technology that eliminates drudgery. Its amazing. You can actually profit without having slaves. Can you believe that?

You obviously never seen where an Oregon strawberry, raspberry etc grows. You'd have strawberry jam if humans didn't do the picking. I grew up de-tassling corn for hybrid in Iowa. Once again, human hands cannot be replaced.

The Original Bankster says

whites only comprise 80% of this country. they’re hardly significant.

Do you read what you post?

The Original Bankster says

Leigh, people used to do those jobs and support a family. Those jobs had dignity. That was before we decided that ‘Social Media Guru’ was the world most valuable professional. Remember the nice neighborhood butcher? or the local farm stand? can we have those people back please and we can put the Social Media Gurus to work in the coal mines.
Secondly, there is something called technology that eliminates drudgery. Its amazing. You can actually profit without having slaves. Can you believe that?

On one hand you state 'bring back the local butcher' and on the other hand you state 'technology eliminates drudgery'. You don't see the contradiction?

I'd love to get rid of big industrialized farms but who's gonna feed all of our fat arses?!?! hahaha

just going by the census.

The Original Bankster says

just going by the census.

You don't consider 80% significant?

obviously you're not good at detecting sarcasm.

I don't know Bankster, you keep stating that the banks are the victims in this fiasco. Do you know how that makes you look?

no I don't state that anywhere. Suggesting that the greedy idiots who took out huge loans should take a hit does not equate to "banks are the victims".

it doesn't matter Leigh, no one gives a shit about the poor McMansion owners, and they don't have the money to buy political clout. They are the biggest idiots of all.

Zlxr says

get the other States to chip in and pay

this seems to be the best solution CA can come up with. If they do somehow get Obama to do that, there will be massive political friction between states and federal government.

Zlxr says

Share some of our poor and illegal population with other States

LOL. I wonder how quickly they will pass laws to prevent that from happening. In AZ they are likely to get shot if they start bumming around here. I hear Hawaii is nice.

Zlxr says

ship them to countries that have jobs

ok now were just getting stupid. No California, I tend to think there are lots of riots and gang violence in your future and the plummeting property values that come with it.

Zlxr says

It’s not like we don’t have alot of reverse discrimination going on either

There is alot, unchecked by anti-discrimination entities, and by some powers to be totally ignored!

The Original Bankster says

ok now were just getting stupid. No California, I tend to think there are lots of riots and gang violence in your future and the plummeting property values that come with it.

Great! Plummeting property values, only means we will have more hirings and keep jobs locally.

Zlxr says

ship them to countries that have jobs, have more lotteries or find something that works. The “What will Work” is the question

Let nature take its course, as was the case they came here to seek their fortune, they move out and seek it elsewhere.

Wong,

My red-state relatives "hate California" too. And what grates on them more than anything, though they'll never admit to it, is that their red state is below the radar of Californians, which does not mean that we think they're below contempt, even though they may think so.

They hate California, but they come here to spend their red state wages for touristic experiences. Say one thing, but vote differently with their discretionary fun money.

thomas.wong1986 says

Great! Plummeting property values, only means we will have more hirings and keep jobs locally.

ya, like riot control officer.

The Original Bankster says

at this point the ‘Venture Capital’ world is nothing but a bunch of rich kids looking to impress other rich kids

Venture Capitalists are salepeople, many today not very bright and unexperienced when it comes to financial issues matters. They cant even read a balance sheet or profit loss statement. At the end VCs hold no money and feed off the cash they get from investors which has all but dried up. I dont see any difference between the likes of John Doer or Bernie Madoff. Thier own greed have inflicted geat financial pain on the rest of our local industries. Pimping companies that could never taken public like MYSQL for $1B to Sun latter having Sun take a massive $500M write down (50%) because they overpaid... Tall it toxic M&A like toxic ARM loans.. but much worst.

or the soon to be biggest goof up investment in history: FACEBOOK.

have your excess go to other states? are you kidding? why not just do away with them in a gas chamber? They are Californians too, they're not just some vermin you can exterminate when they become a financial problem. California is their home. You made your bed, now lie in it.

most of the conservative states will be cutting their welfare programs, so I guess they can wander in if they want but they will soon be picked up by the cops. More than likely they will want to take their anger out on middle class white people.

I don’t believe in guns so I don’t have one, but my neighbor has one and says they’ll stick up for us.

You don't believe in guns.. is that sort of like not believing in the tooth fairy? Yet you believe that your neighbor should do what you're unwilling to do.. that is, take responsibility including reasonable self-defense precautions in order to protect yourself, your family and your neighbors.

CA is in worse shape than most states, but it's not just CA, it's our country that's in bad shape. Is the US really much better than the PIIGS? http://ur.lc/jip

Otherwise - too many people with weapons just makes everything worse.

Does it really? Do you think it would be a bad thing if more law abiding people armed themselves? I fail to see the logic.