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California the NEW Greece?


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2010 May 12, 3:02am   15,327 views  110 comments

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Schwarzenegger Warns of "Terrible Cuts, Absolutely Terrible Cuts" Coming in California

More evidence that California is the new Greece.

As the state grapples with a horrible budget situation, Arnold Schwarzenegger is warning of pain ahead.

Specifically, according to the SacBee, Schwarzenegger press secretary Aaron McLear said:

"What you can expect generally is no taxes and terrible cuts, absolutely terrible cuts... We're not going to get through the deficit we have without some really tough decisions and some really terrible cuts."

This is going to get really ugly, and though California may stave off default, there's no way they'll be able to stave off the horrible demand destruction that will result from these "absolutely terrible cuts."

*****

"Demand Destruction"... does this translate to demand for housing destruction?   Is CA home price double dip coming?

#housing

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32   pkennedy   2010 May 13, 6:35am  

His comment stated that AZ is in worse shape than CA. They aren't cutting their loses yet.

33   SFace   2010 May 13, 6:40am  

look bankster, obviosuly you don't like CA. I get that. But before you mouth off about other's problem, please mind your own issues first. You have presented nothing of substance thus far.

34   The Original Bankster   2010 May 13, 6:58am  

SF ace says

look bankster, obviosuly you don’t like CA. I get that. But before you mouth off about other’s problem, please mind your own issues first. You have presented nothing of substance thus far.

excuse me asshole? All I ever hear is how fucking great the CA economy is, while I read about tent cities, collapsing infrastructure and total insolvency. What the fuck is wrong with you stupid fucking people?

I know whats going to happen, you're going to claim you need 'help' from the Federal Government. All the poor billionaires might lose their RE holdings. At this point I think you're going to see some major political tumult. CA is flirting with the greatest humanitarian crisis in history and the dumb fucks in Palo Alto think its a great day for starting a social network.

35   The Original Bankster   2010 May 13, 7:00am  

pkennedy says

His comment stated that AZ is in worse shape than CA. They aren’t cutting their loses yet.

thats what SB1070 was all about. We're passing a number of other measures as well. Our legislature is clearly looking to the future at this point, while the shitheads in Sacramento look for fat payoffs. If I were in CA, I would get the fuck out of there ASAP because they will take your wealth.

36   pinnacle   2010 May 13, 7:09am  

On top of all the other problems California is in the process of borrowing about 30 billion dollars to
cover unemployment benefits for the next eighteen months and all those unemployed people are not paying much into the tax system.
A relative of mine who recently was hired for one of the much touted "Obama stimulus projects" funded by the feds in California was told last week that he will be laid-off in two weeks so I guess California will have to borrow a lot more federal money when all the short term stimulus jobs come to an end in the next few months.
Of course all those people will still be counted as "employed" in the official statistics even though they only got a few weeks of work out the colossally expensive stimulus program.

37   The Original Bankster   2010 May 13, 7:12am  

everything they are doing points to short term stop gap measures. I have a feeling the upper ups (not the dumb fuck 'nouveau riche' idiots on this forum) know there will be a collapse of epic proportions. AZ even tried to pass a bill that requires Obama to produce his birth certificate.

wake up libtards.

38   SFace   2010 May 13, 7:15am  

"When Greece was not in EU it had very efficient economy. It was one of the greatest tourist destination in the world. After joining EU and Euro zone it became extremely expensive. Most of the tourist flow turned to Turkey. The solution is pretty simple: get out of the Euro zone."

Transactions are always a balance between cost and benefit, you have to accept the good (stability) with the bad (inflexability).

"*10% across the board cut, no exceptions, (It works in the private world, just have the threat of layoff in place as well) excluding education. Education resource needs to be more efficient. downstream responsibility to local levels.
California has developed one of the most inefficient public education systems in the world. It has an army of under-qualified teachers. They were mostly hired since mid 90th in order to reduce class sizes. Lots of schools were expended and new teachers hired just to reduce class sizes. However, most of these teachers have very little knowledge of what they supposed to teach. This was simply not in the focus of that change. As the result we have a lot of let’s say math teachers in middle schools and even in high schools who have teachers credentials but have practically no idea what math is all about.
Sharp reduction is badly needed in this field. I would say sharply cut the public school expenses. Lay off 10-15% of teachers. I would also cut one year from free middle school coverage. Introduce high school entry exams. If a child can’t pass them after finishing 7th grade let them either go to some kind of paid preparatory school (existing middle schools may offer this) or do some state provided trade training instead of high school."

One of the casualty of unionization is that they protect the weak and hurt the strong. After many years of the status quo, you are left with a bunch of weakings in the government sector needing union protection while the strong are encouraged to do something else. To break underperformance, we need to allow a mechanism to fire/demote people based on performance, not seniority. In my field, a collague I train and supervise can flip and be my boss in five years.

"* perhaps cut city college altogether. There are private educators that can fill this void and get specialized education, not some useless generic education that nowadays get you nowhere.

This is not a good idea.
Today a lot of high school drop offs attend city colleges to prepare for college, while working. Most of them would stay in FREE high schools without this option, which would be much more expensive to the state.
Beside this, many city colleges provide much higher quality of classes than even so called “good” high schools.
Also, some of them serve as some kind of outside additions to specialized universities. For example, when a CalTech students need language classes, they take them in Pasadena City College. Providing the same classes in CalTech would be much more expensive."

I think what I am thinking is we need to stop making education reachable to all. In any other country, the education system is designed to weed off the weak and only the strongest 10% or so survive. To me, no child left behind means slowing everyone else down, that may work in the past, but the world is too competitive to contunue this. Seriously, a city college education is practically worthless in today's job environment. You'll me better off specializing in a specific field to be able to add value in today's workforce. When you give people second chance, they can't appreciate the first chance. There are public companies that cater to this market and is working.

" Perpetaul overtime is unacceptable and there should be consequence for manager’s that can’t manage costs.
Not sure what you mean. Do you propose another level of managers, who will manage managers that can’t manage ….? Easier said than done."

"No, if I bust my budget for one year, I'm warned, if I bust my budget again, I'm fired. That is the corporate culture. Costs is the easiest thing to control and yet the government can't even control somethong that simple. I don't care if is nurse, prison guard, or CHP's, those OT level year after year is either incompentent management or nothing gives a crap about budget."

"*cut in home service by 50% as the state should not be in the business of providing a nanny for the elderly, except for extreme cases. (A daughter should not be paid to care for their own mother). cut/consodidate unncessary state programs or agencies"

Again, easier said than done. May be from moral perspective “A daughter should not be paid to care for their own mother”, but in our society too many daughters won’t care for their own mother w/o being paid. At the end it may cost much more to the public.

"* reform pension to share the risk as opposed to loading all the risk to taxpayer’s."
A good idea, however, you can’t do anything on this matter, w/o reforming California legislative processes.

It's hard to break old habits. But habits are broken when people need to change their behavior. In this case, the economic backdrop is the perfect opportunity.

"Vechicle license fee restored to level prior to rollback Just pennies, not even worth to bother"

That's not true, there are around 5M registered vehicle in CA, if taxes are rolled back to Grey Davis level and add about 200 per vehicle per year, that is 1B dollars.

"increase fee for service.
this is the time to get tough on out-of-state companies like Amazon who exploit the CA market and pays nothing in income and sales tax (on behalf of their customers). Physical presense model of commerce clause is outdated and does not reflect current environment, time to fight that in court.

Instead of all I would add about $2.5 p/g gasoline state tax and allow local communities to add up to $1 to it to fund their road/transportation/education needs. With similar but lower tax on diesel fuel.
Based on California fuel consumption it would collect about $80billion/year.
I would introduce it with spending of initially up to 20% of the collected tax on limited gas subsidies. It may be done in form of “gas stamps” provided to all legal residents with no regards of their income. The subsidy should fade over time"

The Amazon problem will only get worst and it is unfair for brick and mortars like Walmart who hire and pay tax in CA. I'm not against technology bu there is no reason for the tax advantage when Amazon can reach and exploit the CA market as well as Walmart can.

I agree on a gas tax, but not to that level. Adding that much will effect price of food, shipping and service in addition to causing a severly lower tax base from less consumption.

40   SFace   2010 May 13, 7:25am  

The Original Bankster says

SF ace says


look bankster, obviosuly you don’t like CA. I get that. But before you mouth off about other’s problem, please mind your own issues first. You have presented nothing of substance thus far.

excuse me asshole? All I ever hear is how fucking great the CA economy is, while I read about tent cities, collapsing infrastructure and total insolvency. What the fuck is wrong with you stupid fucking people?
I know whats going to happen, you’re going to claim you need ‘help’ from the Federal Government. All the poor billionaires might lose their RE holdings. At this point I think you’re going to see some major political tumult. CA is flirting with the greatest humanitarian crisis in history and the dumb fucks in Palo Alto think its a great day for starting a social network.

again no substance why CA is any worse than AZ just rants and now cussing.

41   The Original Bankster   2010 May 13, 7:30am  

SF ace says

again no substance why CA is any worse than AZ just rants and now cussing.

AZ is clearly going in the right direction. Now is the time to buy a house in AZ.

42   SFace   2010 May 13, 7:35am  

ok that's great. Read the link to the article, agree with social problems and there are serious social issues going on. I am not blind to those problems.

having frequent AZ, I always wonder why there are not more solar panels installed. If there is a state that can monetize solar energy, it's AZ.

43   The Original Bankster   2010 May 13, 7:57am  

AZ is perhaps exactly the opposite of CA right now. We just gained a conservative majority in state legislature. At this point AZ's PR is at an unnatural low. Time to buy. Property values are going up. I meet new CA refugees every day. esp. Metro PHX.

44   simchaland   2010 May 13, 10:02am  

The Original Bankster says

AZ is perhaps exactly the opposite of CA right now. We just gained a conservative majority in state legislature. At this point AZ’s PR is at an unnatural low. Time to buy. Property values are going up. I meet new CA refugees every day. esp. Metro PHX.

Now you're really screwed.

45   The Original Bankster   2010 May 13, 10:28am  

simchaland says

Now you’re really screwed.

we generally hate Californians, but we like talented, educated people. The reason why things got out of control here were politicians with interests in CA.

46   thenuttyneutron   2010 May 13, 10:37am  

TOB,

Don't forget that the politicians and elites also liked their "slave" labor. The true costs are being subsidized by the California middle class.

I wish we could get the 14th Amendment fixed to only allow US citizenship to the children of current US citizens. You would then have to go after the employers of this "slave" labor.

47   The Original Bankster   2010 May 13, 10:41am  

oh ya McCain has very much supported the illegal slaves for a long time. Only recently has he responded. But Nutty, you're right as usual the issue is slavery. Slavery is immoral and corrupt. We cannot allow it to occur.

the ones who get the real shit end of the stick are young middle class Americans who cannot find jobs and do not benefit economically at all from the slaves. This needs to end and it needs to end now.

http://www.phoenixrally.com/arizona_rally_and_freedom_march_across_america.html

theres another march on the 12th as well.

48   thenuttyneutron   2010 May 13, 10:53am  

I liked your last avatar better. This one does not make me as angry as I used to get when I saw that dumbass Greenspan.

49   The Original Bankster   2010 May 13, 11:03am  

I've really been loving my state lately.

50   Leigh   2010 May 13, 11:19am  

The Original Bankster says

oh ya McCain has very much supported the illegal slaves for a long time. Only recently has he responded. But Nutty, you’re right as usual the issue is slavery. Slavery is immoral and corrupt. We cannot allow it to occur.
the ones who get the real shit end of the stick are young middle class Americans who cannot find jobs and do not benefit economically at all from the slaves. This needs to end and it needs to end now.
http://www.phoenixrally.com/arizona_rally_and_freedom_march_across_america.html
theres another march on the 12th as well.

Hey, why don't those young middle class workers apply for those slaughter house and meat packing jobs? And come harvest time in the Pacific NW we'll need lots of hands to harvest the blue berries, raspberries, strawberries, cherries, peaches, pears, apples, etc.

51   The Original Bankster   2010 May 13, 11:42am  

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?

52   thomas.wong1986   2010 May 13, 2:08pm  

thenuttyneutron says

I wish we could get the 14th Amendment fixed to only allow US citizenship to the children of current US citizens. You would then have to go after the employers of this “slave” labor.

You should read this then...

http://federalistblog.us/2007/09/revisiting_subject_to_the_jurisdiction.html

Under Sec. 1992 of U.S. Revised Statutes the same Congress who had adopted the Fourteenth Amendment, confirmed this principle: “All persons born in the United States and not subject to any foreign power, excluding Indians not taxed, are declared to be citizens of the United States.”

Who are the subjects of a foreign power? Thomas Jefferson said “Aliens are the subjects of a foreign power.” Thus, the statute can be read as “All persons born in the United States who are not aliens, excluding Indians not taxed, are declared to be citizens of the United States.”

53   The Original Bankster   2010 May 13, 2:25pm  

its very easy to fix that problem, just stop admitting them to hospitals. you can't just present your baby to the welfare office and ask for money.

54   thomas.wong1986   2010 May 13, 2:29pm  

My hats off to Arizona for have some balls! Our Girly Governor seems to misplaced his.. perhaps Maria has them locked up somewhere.

55   The Original Bankster   2010 May 13, 3:15pm  

your governor has balls, he just doesn't give a fuck about you.

56   The Original Bankster   2010 May 13, 3:40pm  

Zlxr says

It seems that employers don’t want workers who have any rights.

thats the core issue, and as it progresses Americans are robbed of their right to work.

57   B.A.C.A.H.   2010 May 13, 4:12pm  

Bankster,

I agree with a lot about what you say, but jeez, don't you have anything better to do with your time than spending so much time here to poke fun at and criticize people who live in a different state?

58   The Original Bankster   2010 May 13, 4:33pm  

California deserves more than just a forum flaming.

They are seriously endangering this country with their model of prosperity and cultural values. I notice the metro savvy have shifted their focus to NYC recently. At least NYC has some sense to it.

59   simchaland   2010 May 14, 4:28am  

The Original Bankster says

California deserves more than just a forum flaming.
They are seriously endangering this country with their model of prosperity and cultural values. I notice the metro savvy have shifted their focus to NYC recently. At least NYC has some sense to it.

Yeah, doesn't everyone just hate prosperity?

And everyone likes being told how to live his or her life, or at least that's what the conservos want with laws regulating everything from what you do in your own bedroom to whom you can marry to what rights you have over your own body to end of life decisions, etc.

But those same conservos live to give the absolute degree of "freedom" to giant faceless corporations that the conservo Supremes have suddenly decided are "people" to manipulate and control any other aspect of your life that they haven't controlled yet with their laws that reach into your bedroom and your personal lives.

For people who allegedly like small to no government, conservos sure seem to like having government and corporations interfere with every aspect of their lives.

60   The Original Bankster   2010 May 14, 4:41am  

Yeah, doesn’t everyone just hate prosperity?

I always thought "prosperous" and "bankrupt" were mutually exclusive ideas.

61   simchaland   2010 May 14, 4:46am  

I notice you ignored how conservos are really about controlling everyone's life down to the last personal detail whereas we Liberals like to create room for the greatest amount of personal freedom. It's interesting that conservos consistently lie about liking "small government" when they are all about legislating away personal freedoms.

62   SFace   2010 May 14, 6:52am  

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 and strike while the iron is hot. I suspect in the end, some tax will have to make it's way into the final budget bill.

63   MAGA   2010 May 14, 7:05am  

Schwarzenegger lays out bleak California budget

http://www.montereyherald.com/local/ci_15085593

Some people (libs) may not want to admit it, but a lot of money gets spent for illegal alien healthcare.

64   Ptipking222   2010 May 14, 7:10am  

simchaland says

I notice you ignored how conservos are really about controlling everyone’s life down to the last personal detail whereas we Liberals like to create room for the greatest amount of personal freedom. It’s interesting that conservos consistently lie about liking “small government” when they are all about legislating away personal freedoms.

That's true and not true at the same time. You're mistaking 'conservatives' with 'Republicans' and 'social conservatives.' We can thank Bush for destroying the Republican party having any integrity when it says it wants to limit government.

Nevertheless, there is a growing group of people that are both economically conservative and socially liberal: the common denominator being in favor of less government.

65   Ptipking222   2010 May 14, 7:15am  

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.

66   SFace   2010 May 14, 7:37am  

"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.

68   Â¥   2010 May 14, 9:20am  

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

69   The Original Bankster   2010 May 14, 9:38am  

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."

70   The Original Bankster   2010 May 14, 9:45am  

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.

71   The Original Bankster   2010 May 14, 9:52am  

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!

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