California; Too Big To Fail?

First off, full disclosure. I'm no fan of California. Never have been. I'm a Wyoming-type of guy. But I imagine there are people in California that are good, honest, hard-working souls. Sorry your state is so messed up.

Walter Williams (one of my favorite writers) has an article here that should be an eye opener to everyone and not just for the folks living there.

California was once the land of opportunity, but it is going down the tubes.

Several of California's prominent cities have declared bankruptcy, such as Vallejo, Stockton, Mammoth Lakes and San Bernardino. Others are on the precipice, and that includes Los Angeles, California's largest city.

California's 2012 budget deficit is expected to top $28 billion, and its state debt is $618 billion. That's more than twice the size of New York's state debt, which itself is the second-highest in the nation.

ERRMERGERD! Whataretheygoingtodo?

Seriousy, what?

Democrats control California's Legislature, and its governor, Jerry Brown, is a Democrat. California is home to some of America's richest people and companies.

It would then appear that the liberals' solution to deficit and debt would be easy. They need only to raise taxes on California's rich to balance the budget and pay down the debt — or, as President Barack Obama would say, make the rich pay their fair share.

Start coughing it up, kittens! Put your money where your mouth is!

The downside to such a tax strategy is the fact that people are already leaving California in great numbers. According to a Manhattan Institute study, "The Great California Exodus: A Closer Look," by Thomas Gray and Robert Scardamalia (October 2012), roughly 225,000 residents leave California each year — and have done so for the past 10 years.

They take their money with them. Using census and Internal Revenue Service data, Gray and Scardamalia estimate that California's outmigration results in large shares of income going to other states, mostly to Nevada ($5.67 billion), Arizona ($4.96 billion), Texas ($4.07 billion) and Oregon ($3.85 billion).

Wait, what? Don't go! My cat still needs another botox series!

California has one-eighth of the nation's population but one-third of its welfare recipients. According to BusinessWeek, "it is one of the few states that continue to provide welfare checks for children once their parents are no longer eligible."

There's nothing new about the handout strategy. As far back as 140 B.C., Roman politicians found that the way to win votes is to give out cheap food and entertainment, what came to be known as "bread and circuses."

Given the widespread contempt for personal liberty and constitutional values, there might be a way for California politicians to solve their fiscal mess. They can simply stop wealthy people from leaving the state or, alternatively, like some Third World nations, set limits on the amount of assets a resident can take out of the state.

Draconian laws?
Higher taxes?
Literally TAKING the money that wealthy people have.

What would your solutions be, ATS?

Mine own thoughts? Austerity measures now. But hey, that's just me.

We need Gray Davis back

Originally posted by dayve
We need Gray Davis back

edit on 14-10-2012 by dayve because: typoh

What would he do????

Oh well...this is what happens when people don't take idealism and realism into perspective.

Originally posted by Svipdagr
Oh well...this is what happens when people don't take idealism and realism into perspective.

Is there any solution to this mess?

Or will Cali be a write-off?

Originally posted by beezzer

Originally posted by dayve
We need Gray Davis back

edit on 14-10-2012 by dayve because: typoh

What would he do????

Idk i just liked his stupid commercials with his lil autistic redneck yammer... I have no idea who the governor is right now, and havent for a while... Since Schwarzenegger screwed everything up after that dickhead, we just need somebody smart enough to fix it all n everything will be arighty...

My opinion? Let it ride.

If things start going bad in california, I'm gonna sit back with my popcorn and watch. There are entire genres of TV shows based on their gluttonous and disregard for real life behaviors.

I have zero remorse for rich people being put out to dry. Zero.

Here is the answer.....

Originally posted by litterbaux
My opinion? Let it ride.

If things start going bad in california, I'm gonna sit back with my popcorn and watch. There are entire genres of TV shows based on their gluttonous and disregard for real life behaviors.

I have zero remorse for rich people being put out to dry. Zero.

I wonder if California would suspend the 10th Amendment in favour of a federal bailout?

Yep California is a hole.

Its why I left, property taxes too high, some of the worst unemployment rates, etc.

Only reason to be there is the weather and thats about it.

Not to mention what cities like San Bernandino are considering to get out of their mess, using eminent domain to cease property and rent them out...

Originally posted by benrl
Yep California is a hole.

Its why I left, property taxes too high, some of the worst unemployment rates, etc.

Only reason to be there is the weather and thats about it.

Not to mention what cities like San Bernandino are considering to get out of their mess, using eminent domain to cease property and rent them out...

edit on 14-10-2012 by benrl because: (no reason given)

I may be wrong, but I see California as Detroit writ large.

The inability to own up to their spending will destroy the state.

reply to post by beezzer


California is not to big to fail. California is too big to be in the Union. It by herself is the Worlds 8th largest economy.. it has a massive deficit, because unlike the 7 larger economies above it.. it kicks the absolute vast majority of her tax receipts up to a "Federal Level."

If California could keep alllllll of the income her people and businesses generated and cycled it within the state without sending 80%+ of all tax receipts to Washington .... then California could afford all the crazy progressive policies it wants and be perfectly fine.

But as it is such a massive economy, I'd say letting Cali fail is out of the question.

reply to post by beezzer

If I'm not mistaken, at least you don't have financial equalization transfairs within your states, like we have here with our cooperative federalism, or on a bigger scale within the €Z.

I'm right, am I not??

Originally posted by Rockpuck
reply to post by beezzer

 

California is not to big to fail. California is too big to be in the Union. It by herself is the Worlds 8th largest economy.. it has a massive deficit, because unlike the 7 larger economies above it.. it kicks the absolute vast majority of her tax receipts up to a "Federal Level."

If California could keep alllllll of the income her people and businesses generated and cycled it within the state without sending 80%+ of all tax receipts to Washington .... then California could afford all the crazy progressive policies it wants and be perfectly fine.

But as it is such a massive economy, I'd say letting Cali fail is out of the question.

So California is like Greece and the rest of the US is like the EU?

Sounds like austerity measures are called for.

Originally posted by ColCurious
reply to post by beezzer

 

If I'm not mistaken, at least you don't have financial equalization transfairs within your states, like we have here with our cooperative federalism, or on a bigger scale within the €Z.

I'm right, am I not??

edit on 14-10-2012 by ColCurious because: (no reason given)

Could you expand on that? (I'm not that smart!)

reply to post by beezzer

As far as I know, opposed to Germany's federal structure (cooperative federalism, which entails direct financial cooperation and transfairs between states) the US federal structure is competitive federalism, which is much more favourable IMO.

Will other US states have to pay for California's failed fiscal policies or no?
How much federal independence is there really?

*I'm just curious from an anti-centralistic point of view.

Originally posted by ColCurious
reply to post by beezzer

 

As far as I know, opposed to Germany's federal structure (cooperative federalism, which entails direct financial cooperation and transfairs between states) the US federal structure is competitive federalism, which is much more favourable IMO.

Will other US states have to pay for California's failed fiscal policies or no?
How much federal independence is there really?

*I'm just curious from an anti-centralistic point of view.

edit on 14-10-2012 by ColCurious because: (no reason given)

Currently, no. No states have to pay for California's mistakes. Scary thought is that could change.

A very dynamic political climate right now.

reply to post by beezzer

Okay thanks. That's what I thought.

Originally posted by beezzer
Scary thought is that could change.

A very dynamic political climate right now.

Bad idea.

Whoever advocates even more fiscal centralism and entanglement in view of the contagious situation within our centralized systems in this current global financial crisis is either blind or mentally ill.

*or just evil.

reply to post by Rockpuck


That is not so much letting it fail as it is letting it go.

DC won't though. As bad as calis economy is it still pays more in taxes than it gets.
Washington won't let it go until it is drained of all wealth and dying then DC will cut all life support and let it die alone.

Bail out California?

The home of Pelosi?

They made their bed now they have to lay in it.

Maybe they should make taxes cheaper so Hollywood would stop outsourcing films and tv to Canada and other countries.

Anything too big to fail is failing because they have gotten too big.