As Goes California So Goes the Nation?

As goes California, so goes the nation?This article from The Economist is far more important than an initial glance might indicate...

Source

A good outcome is no longer possible. California now has the worst bond rating among the 50 states. Income-tax receipts are coming in far below expectations. On May 11th Arnold Schwarzenegger, the governor, sent a letter to the legislature warning it that, by his latest estimates, the state will face a budget gap of $15.4 billion if the ballot measures pass, $21.3 billion if they fail. Prisoners will have to be released, firefighters fired, and other services cut or eliminated. One way or the other, on May 20th Californians will have to begin discussing how to fix their broken state.

Think about the repercussions of what is happening here....Mass Chaos is an understatement..

Many others, however, now believe that California needs to start from scratch, with a fully-fledged constitutional convention. California’s current constitution rivals India’s and Alabama’s for being the longest and most convoluted in the world, and is several times longer than America’s. It has been amended or revised more than 500 times and now, with the cumulative dross of past voter initiatives incorporated, is a document that assures chaos.

Can you imagine the level of civil unrest that such a measure will create? Special interest groups stirring up the populace to fever pitch... It is my theory that we will see the first shots of a larger national uprising fired in California....It looks like we're in for a hot summer....GHUA

reply to post by RolandBrichter


California has already gone. The day they failed to pay the bills on time was a default. Other states on on the same path. People just don't get it. This is a depression. 15 million Americans starved in the previous depression and to think it cannot happen again is a true shot in the dark.

Our country is in deep debt, with something like a $130,000 average debt load *per taxpayer* and rapidly rising. But on top of that, most individual states are in deep debt California is about $30 billion in debt and losing $2 billion a month. They have no choice but to cut a lot of jobs. But then again so do a lot of states, especially the highly populated ones. Florida maybe the next to go bankrupt. But what is more, many or most individual cities are in debt. But on top of that many individuals are deeply in debt. And many of those in debt are losing their jobs, pushing them to declare bankruptcy. The only solution is rapid liquidation of the debt, meaning their assets must be siezed and sold for a fraction of their actual worth. However the government purposely slows down this process, meaning this thing will drag on for years and years.

The only way this could be resolved without a very nasty depression is if the free market was put in charge of things. That will never happen. I recently heard the banks are still heavily leveraged at about 25x their worth *on average*. That is sheer insanity and means a lot of banks have yet to go bankrupt. And the feds continue over and over again to believe that no matter what, we must be 6 months from a recovery. They are incompetent and just screw things up. And yet they are rewarded for their incompetence by given more and more powers to screw things up even more.

After failing to account for trillion of their bailout money, we still don't even know if Ron Paul's audit the fed bill will pass, meaning congress may be even more incompetent by not even caring about lost trillions. What can I say it isn't their money it is ours.

Maybe now the states will start wising up and quit adding expesnses to the their state governments. I hope this forces other states to start cutting back services. Maybe we will get lucky and the fed government will wise up and start shrinking down a notch as well.

[edit on 5/17/2009 by justsomeboreddude]

The economic slide is continuing, thousands losing jobs weekly, few or no new jobs or opportunities are being made available. Water shortages are often overlooked and will be a significant problem in the western USA soon, the state of California appears to be the first and possibly worst in what will likely be a domino effect across the nation. Urban chaos is going to happen unless there are some miracles.... These issues among others are more than enough reason to be "prepared" you do not want to be trapped in an urban area when it finally all breaks down... Despite all efforts to prevent this it is already happening, especially in areas where unemployment is already greater than 25% and is growing, areas in California that are already hit particularly hard are now facing water shortages when the state has already warned it may prevent the use of water for agriculture... Add that to an already dire situation and you can begin to see the inevitable.

Agree to all above...I just have this feeling that Ca will be the flash point that starts civil unrest on a national scale....Born and raised there, haven't lived there for almost 15yrs....but whenever I go back, the general mood seems to get darker and darker....something is just under the surface, ready to explode....Don't hold me to it, but I would say we're only a few weeks away from a breaking news story that involves mass riots out there...

reply to post by RolandBrichter


I hate to admit it, but... good. Perhaps the exposed reality of the situation will prompt some closer scrutiny by the masses of the Fed. The international nature of our central bank is an insult to our Constitution, but the majority of Americans don't even know what the true nature of the Fed is.

Restore the Constitution, downsize the bloated Federal government, revise the US Code, abolish the illegal Federal income tax, audit the Federal Reserve... For starters.

The people that got us into this mess, and continue to perpetuate it are criminal in their actions and intent. They must be treated as such. We, the People would be remiss in fulfilling our civil responsibility if we do not demand redress.

I have been in California a lot over the last several months, and I have seen, indeed watched the progression of this collapsing economy. Especially in central California.

I am now currently in southern Arizona, and it ain't much better here.

I do believe that when (I pray for an IF here) California does collapse it will send a shock-wave across the country.

When you look at the problems and causes you can't really find any solution. With every business closure and job loss means state and federal revenues lost, more foreclosures, bankruptcies, all of which are like a virus itself, it can only keep spreading, yet like a vacuum it is sucking up the new money as fast as it is printed (bailouts) which also only makes things worse by ultimately creating inflation (food prices are already going up) and devaluing the dollar.

I can't see how this can be stopped until it reaches the END. The end of this country as we have known it.

It is a vicious cycle, and the more they try to stop it the more it grows.

This could all easily go far beyond a "great depression"

There are many who take comfort in their savings, while it is good to have in any case, if there is a complete collapse your savings could be worthless. If you think your job is secure then it is only because it hasn't fully impacted your area. No one will be immune to this ultimately. That includes the government.

I hope I am wrong, and that we are only a few more TRILLION new dollars away from turning this all around.

Only time will tell.

I'd be prepared for the worst just in case!

California is in huge trouble...all of the west coast states look like they are in deep trouble...at least by unemployment indicators.

Check this out if you haven't already.

There is a map here that shows how bad each county in the US is economically....and these are the "good" numbers. Needless to say, even with the numbers made to look better...it still looks nasty anyway.

www.abovetopsecret.com...

.....and now THIS....

With headlines like "let the New California Tax Revolt Begin"..this is soooooo much larger than people realize...

I believe this is one of the most important threads dealing with the Global Meltdown right now.

Star and Flag.


The implications of the collapse of a whole state are HUGE.
Not only will the shock waves be felt all over the US but all over the world.
If California were it's own country it would have the world's 4th largest economy!!!
That is how important this state is the the US.


The inaction of the US government is a sign of their priorities! They will bailout the banks but will not lift a damn finger to help its citizens.
Have you noticed Obama has been silent about this?

Thank you...

It's all so SURREAL....it's like watching a horror movie in slow motion, where you know the obvious outcome and the horrific national implications....and there is nothing you can possibly do about it....a very, very helpless feeling.....I still have many relatives out there who are like a frog in a pot.....the heat is being turned up slowly enough that they refuse to react...when the water reaches a boil it will be too late to help them...frustrating

First of all... they need to let some of those prisoners out. Their prison industrial complex is ridiculous.

Secondly if they collapse, that is the type of thing that will push states like mine (Texas) into more contimplation of removing ourselves from the Union. We have no state income taxes and manage to balance our budget. I abhor having to pay for insolvent companies much less insolvent states.

reply to post by Anonymous Avatar


I have a feeling that fed.gov will declare California a "state too big to fail" and will funnel more of our money into a useless cause...

reply to post by RolandBrichter


here it comes.....

Source

They say they need the Obama administration to step in and back billions of dollars in emergency loans. If Washington fails to do so, the state could start running out of cash in July and then would have to stop paying huge amounts of its bills. That, in turn, could set off dangerous ripples throughout the economy, state officials say. The argument is familiar. Just like AIG and General Motors, California says it is too big to fail.

"A fiscal meltdown by California . . . would surely destabilize the U.S., if not worldwide, financial markets," State Treasurer Bill Lockyer wrote in a May 13 appeal to U.S. Treasury Secretary Timothy Geithner.

A broken record......

Originally posted by David9176
California is in huge trouble...all of the west coast states look like they are in deep trouble...at least by unemployment indicators.

Wow, to say the least. I work for a court in Los Angeles that's under the State. The budget deficit is causing us to have to take an unpaid furlough day evey month commencing in July. Could be much, much worse; will get much, much worse. Because of the initiatives not passing, the Courts will very likely have to cut 25% of its workforce within four years. You can Google that. I can't imagine the ramifications. And this is just one sector.

I live in a sorely urban area. I'm a single (widowed) working mom. Got no family to run to anywhere. I'm trying to slowly stock up on necessary items. But if tshtf in a big way, they will eventually take what we got. Also, I have two teen daughters. Wish I could head for the hills. That won't work for many reasons. I just don't know what to do or say.

reply to post by RolandBrichter


Unbelievable... It's really happening. How did it ever get this far? Now Schwarzenegger is begging for a bailout, and California will soon become the largest of the FEMA camps in the country, willingly and by proxy.

I'm so sorry this had to happen, and I pray for all of you in California, who will see the second "Siege of Boston" in our lifetimes.

The S is truly beginning to HTF.

Still, millions are complacent, too brainwashed to read this article and realize the true implications of the "guarnatee" that the Obama administration has given to prospective lenders.

There's no like guarantee that California will even be able to make it, why should the rest of us be held liable for a gamble that We, the People may not be willing to take with our money?

Because the administration said so, Seig heil!!!

reply to post by RolandBrichter


Yea this summer is going to be real fun, balanced by some real bad occurring.

I can feel it now. Something BIG will happen this summer.

The only question is, will we be able to recognize how big it is.

Sometimes Big things come in small packages.

I just got back from a trip to California, spent some time in the central region of the state, also a day in Union City.

I was surprised to see how utterly dry California has become especially through the I-5 corridor. If you drive through there now you will see acres upon acres of farmlands bone dry, with signs posted near the highway that says "Congress Made Dust Bowl" ... It appears as if California has little or no water to spare for agriculture... Some are still watering crops and fruit trees, vineyards etc. But for how long? In some places you can see cattle biting the last inches left of long dead and very dry, dusty, grass... Kinda makes you feel bad for the animals.

The state had a special ballot, and it completely failed... So they are indeed going to face drastic cuts with an estimated 21 BILLION dollar deficit... What will be a cause for serious contention is the fact that the state will cut back in essential areas of the budget (police, fire, education, prisons etc.) in reprisal for the voter backlash against their spending plans.

They are going to make the people pay for their vote against their agendas.

It is going to be a long hot and dry summer in California.

[edit on 22-5-2009 by Walkswithfish]

Wow....I was in Sacramento in March and headed north up I-5 ...things were looking shabby then, I can imagine how bad they look now....thanks for the update

reply to post by RolandBrichter


You should see it now... And it can only get worse.

California is the canary in the coal mine for the rest of the nation, a national warning.

There are too many counties in California with greater than 25% unemployment, and every county has been hit hard by the bad economy.

There are so many things right now against the state, short of miracles all anyone can do is pray for better days... And rain!

It's too bad, California is a great place, though I do not believe it was ever meant to sustain so many humans. That fact along with a liberal spend crazy government and a collapsing economy may leave the state in perpetual downfall and eventual ruin.




[edit on 22-5-2009 by Walkswithfish]