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RE: California lunacy

Posted: 11/14/2012 9:13 AM

RE: California lunacy 



VUGearhead wrote: When California defaults, and the federal government has to step in, will we have the fortitude or backbone that Germany has had with Greece, to institute fiscally responsible policies and austerity measures designed to bring budget insanity back into order?

Will Californian's protest and riot like the Greek's when or (less likely) if that time comes?

Is this the kind of future we are working our way towards?
Just to be clear, who is the "we" in this scenario?  



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Posted: 11/14/2012 9:31 AM

RE: California lunacy 


We, would be the American voters or the federal government, depending on who you consider to be the party in charge of this country.

Boy, Puerto Rico has a sweet deal going right now, don't they?

BTW, I thought this thread had more to do with the fiscal responsibility (or lack thereof) of California's state leadership than the profitability of their taxpayers?

If California is such a profit center for taxes, then why is their state (and municipalities for that matter) going bankrupt?

Last edited 11/14/2012 9:36 AM by VUGearhead

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Posted: 11/14/2012 9:46 AM

RE: California lunacy 



VUGearhead wrote: We, would be the American voters or the federal government, depending on who you consider to be the party in charge of this country.

Boy, Puerto Rico has a sweet deal going right now, don't they?

BTW, I thought this thread had more to do with the fiscal responsibility (or lack thereof) of California's state leadership than the profitability of their taxpayers?

If California is such a profit center for taxes, then why is their state (and municipalities for that matter) going bankrupt?
You made the argument that "we" should not assist California without demanding austerity measures.  I simply pointed out that 29 of the states on that list (plus Puerto Rico) really do not have much of a leg to stand on when it comes to demanding fiscal responsibility at the federal level.  

Californians have paid significantly more in federal taxes than they have received over the past two decades.  If they were on the receiving end of federal tax dollars per capita than they may be in better shape at the state level.  This is not to suggest that California should not be more fiscally responsible at the state level, but rather to suggest that "we" are not in much of a position to demand austerity at the state level before addressing problems at the national level.

In terms of party, I think this list shows that party has little to do with fiscal responsibility.  The states that I typically associate with being the biggest critics of the federal government seem to be the ones most eager to dine at the federal trough.
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Posted: 11/14/2012 10:55 AM

RE: California lunacy 



Dore2004 wrote:
VUGearhead wrote: We, would be the American voters or the federal government, depending on who you consider to be the party in charge of this country.

Boy, Puerto Rico has a sweet deal going right now, don't they?

BTW, I thought this thread had more to do with the fiscal responsibility (or lack thereof) of California's state leadership than the profitability of their taxpayers?

If California is such a profit center for taxes, then why is their state (and municipalities for that matter) going bankrupt?
You made the argument that "we" should not assist California without demanding austerity measures.  I simply pointed out that 29 of the states on that list (plus Puerto Rico) really do not have much of a leg to stand on when it comes to demanding fiscal responsibility at the federal level.  

Californians have paid significantly more in federal taxes than they have received over the past two decades.  If they were on the receiving end of federal tax dollars per capita than they may be in better shape at the state level.  This is not to suggest that California should not be more fiscally responsible at the state level, but rather to suggest that "we" are not in much of a position to demand austerity at the state level before addressing problems at the national level.

In terms of party, I think this list shows that party has little to do with fiscal responsibility.  The states that I typically associate with being the biggest critics of the federal government seem to be the ones most eager to dine at the federal trough.
Are those other 29 states as debt burdened as California? From that chart I would grant a pass to all the states that are 1-tier above or below the wash line as the numbers indicated in the chart represent only +/- 7.5% per annum (or less) difference in average federal subsidy/taxes paid. Now, while California falls within this group, they have a debt burden which is approaching insurmountable without federal help. $336 Billion over 20 years
is not a lot, given the size of their state economy (represents less than 1% of 2009GDP per annum).

I completely agree about getting our federal 'house' in order as well. Unfortunately, it sounds as if the bell may toll for California first, before the USA. So, most likely, we will have to deal with their debt first, which will only add to the federal debt problems. If what WestCoastDore said is true, then labor largesse is a primary player in California's problem. Doesn't that mirror Greece's problem?

As for feeding at the federal trough, you would have to be able to break out federal spending in terms of separating grants/programs/aid/pork that are paid to the states vs. payouts to individuals (S.S). States have no control over S.S. payments, and that would have an impact in southern states who have a disproportionate senior population.

Oh, and you really have to throw out Maryland from that list. Since DC is included in their stats, and DC's budget comes out of the federal coffers, MD's numbers are wacky. I wonder what their numbers would be without DC spending and taxes.
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Posted: 11/14/2012 11:43 AM

RE: California lunacy 



VUGearhead wrote:
Dore2004 wrote:
VUGearhead wrote: We, would be the American voters or the federal government, depending on who you consider to be the party in charge of this country.

Boy, Puerto Rico has a sweet deal going right now, don't they?

BTW, I thought this thread had more to do with the fiscal responsibility (or lack thereof) of California's state leadership than the profitability of their taxpayers?

If California is such a profit center for taxes, then why is their state (and municipalities for that matter) going bankrupt?
You made the argument that "we" should not assist California without demanding austerity measures.  I simply pointed out that 29 of the states on that list (plus Puerto Rico) really do not have much of a leg to stand on when it comes to demanding fiscal responsibility at the federal level.  

Californians have paid significantly more in federal taxes than they have received over the past two decades.  If they were on the receiving end of federal tax dollars per capita than they may be in better shape at the state level.  This is not to suggest that California should not be more fiscally responsible at the state level, but rather to suggest that "we" are not in much of a position to demand austerity at the state level before addressing problems at the national level.

In terms of party, I think this list shows that party has little to do with fiscal responsibility.  The states that I typically associate with being the biggest critics of the federal government seem to be the ones most eager to dine at the federal trough.
Are those other 29 states as debt burdened as California? From that chart I would grant a pass to all the states that are 1-tier above or below the wash line as the numbers indicated in the chart represent only +/- 7.5% per annum (or less) difference in average federal subsidy/taxes paid. Now, while California falls within this group, they have a debt burden which is approaching insurmountable without federal help. $336 Billion over 20 years
is not a lot, given the size of their state economy (represents less than 1% of 2009GDP per annum).

I completely agree about getting our federal 'house' in order as well. Unfortunately, it sounds as if the bell may toll for California first, before the USA. So, most likely, we will have to deal with their debt first, which will only add to the federal debt problems. If what WestCoastDore said is true, then labor largesse is a primary player in California's problem. Doesn't that mirror Greece's problem?

As for feeding at the federal trough, you would have to be able to break out federal spending in terms of separating grants/programs/aid/pork that are paid to the states vs. payouts to individuals (S.S). States have no control over S.S. payments, and that would have an impact in southern states who have a disproportionate senior population.

Oh, and you really have to throw out Maryland from that list. Since DC is included in their stats, and DC's budget comes out of the federal coffers, MD's numbers are wacky. I wonder what their numbers would be without DC spending and taxes.
I agree it would be helpful to break the numbers out further, but $336 billion represents 55% of California's current state debt.  That's a significant chunk, not accounting for interest over the years, etc. 

But I think per capita numbers are more important than total spending figures.  California has more debt because it has more people.  The fact that it has more debt than Alabama is hardly alarming.  The fact that it has significantly more debt than New York or Texas is alarming.  At the same time, California generates such revenue for the rest of the country, that turning this into a "we" vs. "them" is hardly productive.
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Posted: 11/14/2012 12:14 PM

RE: California lunacy 


Agreed, we are them and they are us. I would expect no different if the tables were turned. You could say we are in the same situation WRT Social Security, with just a demographic, rather than a geographic distinction.
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Posted: 12/6/2012 7:29 PM

RE: California lunacy 


Hah, forget Texas, maybe California should secede then.  Of all those government expenditures, I'd be curious how much of it is states asking for money from the Feds compared to federally required mandatory spending that these states would not pay on their own.  Looks like Florida has received more federal money than theyve paid out.  But how much of that "deficit" is because the government is paying all these retiree's medicare and social security?  Thats not Florida asking for more.  Compared to California which is a high income state coupled with a reasonably young one.  




More California lunacy.... highest marginal taxes now...

http://blogs.sacbee.com/capitolalertlatest/2012/12 /high-income-californians-may-pay-nations-highest- tax-rate.html




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Posted: 1/8/2013 6:56 PM

RE: California lunacy 


http://blogs.the-american-inte...economic-abyss/

It’s unclear what Governor Jerry Brown and his fellow policy-makers are thinking. California is the sixth most expensive state to live in, with a top individual tax rate that is the second highest in the nation. One would think that with all this incoming revenue the state’s public services would be sparkling with quality, yet the opposite is true. California public schools rate as some of the most expensive and poorest performing in the country.  In 2011 the Supreme Court ordered that California release 30,000 inmates, deeming the prisons so overcrowded that their conditions qualify as “cruel and unusual punishment.” This shocking move reflects two vital points. First, that with all its wealth, California doesn’t have the funds necessary to build more prisons. Second, that the state is producing too many prisoners—another failure of California civil institutions. Even with its enormous taxes and public institutions that show no sign of benefiting from them, the Golden State still boasts one of the largest budget deficits in the nation.

As regular readers know, Via Meadia doesn’t have a lot of confidence in California’s political and economic management. The confluence of union power with a green hatred of construction forces the state into such cockamamie boondoggles as a $60 billion plus high speed rail. (Unions want jobs, but greens block any kind of construction that doesn’t fit their vision of a low carbon economy.) Call it a turquoise governing philosophy: the mix of green and blue that wants to carry forward 20th century policies like a large civil service and a mass welfare state even as it manages the shift to a post-industrial, low carbon economy.

This strategic vision blends the priorities of three constituencies that are essential for the contemporary Democratic Party in California: rich greens (strong in Hollywood and Silicon Valley), public sector unions (vital statewide political organizations that Democratic candidates can’t win without), and low income Californians (a growing number) who depend on public services.




"You have undertaken to cheat me. I won't sue you for the law is too slow. I'll ruin you."  - Cornelius Vanderbilt
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Posted: 1/8/2013 11:14 PM

RE: California lunacy 



fldore wrote: http://blogs.the-american-inte...economic-abyss/

It’s unclear what Governor Jerry Brown and his fellow policy-makers are thinking. California is the sixth most expensive state to live in, with a top individual tax rate that is the second highest in the nation. One would think that with all this incoming revenue the state’s public services would be sparkling with quality, yet the opposite is true. California public schools rate as some of the most expensive and poorest performing in the country.  In 2011 the Supreme Court ordered that California release 30,000 inmates, deeming the prisons so overcrowded that their conditions qualify as “cruel and unusual punishment.” This shocking move reflects two vital points. First, that with all its wealth, California doesn’t have the funds necessary to build more prisons. Second, that the state is producing too many prisoners—another failure of California civil institutions. Even with its enormous taxes and public institutions that show no sign of benefiting from them, the Golden State still boasts one of the largest budget deficits in the nation.

As regular readers know, Via Meadia doesn’t have a lot of confidence in California’s political and economic management. The confluence of union power with a green hatred of construction forces the state into such cockamamie boondoggles as a $60 billion plus high speed rail. (Unions want jobs, but greens block any kind of construction that doesn’t fit their vision of a low carbon economy.) Call it a turquoise governing philosophy: the mix of green and blue that wants to carry forward 20th century policies like a large civil service and a mass welfare state even as it manages the shift to a post-industrial, low carbon economy.

This strategic vision blends the priorities of three constituencies that are essential for the contemporary Democratic Party in California: rich greens (strong in Hollywood and Silicon Valley), public sector unions (vital statewide political organizations that Democratic candidates can’t win without), and low income Californians (a growing number) who depend on public services.

Why the heck did you bring this up again? I was practicing osterich mangement techniques and hoping that this problem would go away.
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Posted: 1/9/2013 2:37 PM

RE: California lunacy 


OMT? Like our duly elected reps in DC who hope the debt ceiling/budget woes will miraculously solve themselves between now and the end of February.
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Posted: 1/11/2013 2:14 PM

RE: California lunacy 


I'm not a Californian, & don't really keep up with California much. But here's the latest thing I've run across: California Balances Its Budget.

“For the next four years we are talking about a balanced budget,” [Gov. Brown] said. “We are talking about living within our means. This is new. This is a breakthrough.”

Even the less upbeat report by the...Legislative Analyst’s Office...said the state was facing a deficit of just $1.9 billion, which seems almost pocket change...

None of which comports with the "lunacy" that has been complained of repeatedly on this thread. Does someone more involved wish to reconcile these apparent contradictions, or should I just mentally reverse the lunacy labels?
They laughed when I said I was going to be a comedian. They're not laughing now. -Bob Monkhouse (1928-2003)
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Posted: 1/11/2013 4:23 PM

RE: California lunacy 



vebiltdervan wrote: I'm not a Californian, & don't really keep up with California much. But here's the latest thing I've run across: California Balances Its Budget.

“For the next four years we are talking about a balanced budget,” [Gov. Brown] said. “We are talking about living within our means. This is new. This is a breakthrough.”

Even the less upbeat report by the...Legislative Analyst’s Office...said the state was facing a deficit of just $1.9 billion, which seems almost pocket change...

None of which comports with the "lunacy" that has been complained of repeatedly on this thread. Does someone more involved wish to reconcile these apparent contradictions, or should I just mentally reverse the lunacy labels?

The article is fair, but there are so many unknowns that it’s impossible to predict.

 

My perverted opinion on this is that after the people passed a tax increase, that was heavily marketed as a tax increase on the rich, discovered that it also included a sales tax increase which they would have to pay, a general uproar was heard from the public. Jerry announced this to appease the masses while the state houses lined up to hand out this new found money to their cronies.

 

My serious answer is that I sure hope he can pull it off. He will have an uphill battle with the state houses, but as this is his swan song, he might actually recognize the problem. A leopard can change it spots, right?

For the record, there has been a considerable amount of optimism in previous forecast for state revenue increases which have failed to materialize. Spending cuts are usually watered down and/or scheduled for implementation in the future.

Hopefully, I wrong, but California is often the democracy that our founding fathers were afraid of, therefore, implementing a “republic” approach instead.

IF  he does what he says, then you can reverse this lunacy label. My expectations are not very high on this, but please Jerry prove me wrong. 

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Posted: 1/16/2013 7:50 PM

RE: California lunacy 



vebiltdervan wrote: I'm not a Californian, & don't really keep up with California much. But here's the latest thing I've run across: California Balances Its Budget.
https://www.youtube.com/watch?v=yfAeMtcURg0

"Do not worry, we have everything under control!"



"You have undertaken to cheat me. I won't sue you for the law is too slow. I'll ruin you."  - Cornelius Vanderbilt
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Posted: 1/16/2013 9:00 PM

RE: California lunacy 


fldore wrote:...https://www.youtube.com/watch?v=yfAeMtcURg0

"Do not worry, we have everything under control!"

Yes, we all get it that Chemical Ali was a propaganda tool. But if you believe that merely invoking Ali is a responsive rebuttal of Gov. Brown & even more to the point, the non-partisan group cited in the article, then you're at least as similar to Ali as Brown is.

I requested responsive replies from those closer to the action. But I didn't request irrelevant agitprop. I'd still be interested in your reasons, assuming you do have some, for actually doubting the reality of the fiscal "improvement".

Possibly a disclosure of whether you personally expect to experience any personal financial effects, positive or (more likely) negative, from the new state fiscal restructuring, would be appropriate?
They laughed when I said I was going to be a comedian. They're not laughing now. -Bob Monkhouse (1928-2003)
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Posted: 1/17/2013 9:26 AM

RE: California lunacy 


Vebilt, I give credit to Gov. Brown for proposing a budget that is as close to balanced as CA has had in what, a decade? Not that I am a fan of the tax increases, but at least it is a genuine effort to reduce debt accumulation.

However, I would forego the impetus to reverse the 'lunacy' moniker if/until the budget actually passes through the Statehouse and comes out the other end. Then we can decide if it's caca or not.
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Posted: 1/17/2013 11:52 AM

RE: California lunacy 


VUGearhead wrote:...I would forego the impetus to reverse the 'lunacy' moniker if/until the budget actually passes through the Statehouse and comes out the other end. Then we can decide if it's caca or not.
It's a fair point. But also in fairness, I posted about "mentally reversing" the lunacy label, i.e., inside my own head. I didn't announced that I had already done a reversal, nor that I would make my mental map of reality public if I did. Too many people would get lost attempting to use that map.
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Posted: 1/19/2013 8:00 AM

RE: California lunacy 



vebiltdervan wrote:

Yes, we all get it that Chemical Ali was a propaganda tool. But if you believe that merely invoking Ali is a responsive rebuttal of Gov. Brown & even more to the point, the non-partisan group cited in the article, then you're at least as similar to Ali as Brown is.

I requested responsive replies from those closer to the action. But I didn't request irrelevant agitprop. I'd still be interested in your reasons, assuming you do have some, for actually doubting the reality of the fiscal "improvement".
I didnt know it required a well thought out rebuttal.  Its just business as usual.  California jacked up taxes and it supposedly gets their projected revenue closer to their projected expenses next year.  Are we supposed to applaud that?  Imagine if Obama jacked up social security, medicare, etc... taxes to the point where next years deficit was close to 0.  It doesnt address what those taxes will do to the economy or in California's case, the mass exodus of people and corporations.  It doesnt address the long term unsustainable growing costs.  Did this tax hike include massive pension reform?  No.  And ironically now flush with more cash, California Democrats are demanding an increase in more services.  They've kicked the can down the road regarding real reform and implemented a short term fix which may or may not happen without concern for the consequences of that fix.  

California is still where they were a year ago.  Faced with a large debt, a huge and growing welfare class, uncontrollable government pension costs, cities slashing services and teetering on bankruptcy, and an eroding tax base leaving for friendlier climates.  But hey if they can just keep raising taxes every year and putting on more and more bandaids, good for them.  Not sure thats a plan for long term success however.



"You have undertaken to cheat me. I won't sue you for the law is too slow. I'll ruin you."  - Cornelius Vanderbilt
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Posted: 1/19/2013 11:10 AM

RE: California lunacy 


And by "real reform", you mean slashing the state's social programs. You're free to hold your opinion, but you're not free to have your own majority in the state legislature.

Other Californians hold opinions that are in opposition to yours, & they outvoted you.

And the folks they elected are poised to balance the state's budget, as states (unlike the feds) are supposed to at least approach doing.

So no, if that budget passes, California is NOT "where they were a year ago". In fact, the projections are that, without "raising taxes every year", the California budget may well go into surplus & begin paying down the debt you complain of.

The principal drawback that I can envision from your point of view, is that your state tax rate just went up: you'll personally have to pay more. To me, that was evidently preferable to Californians overall to slashing beneficial state programs. I'm just sorry you apparently can't appreciate that the latter do any/enough good.

Maybe if you had to spend some time walking in other Californians' shoes?
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Posted: 1/19/2013 12:42 PM

RE: California lunacy 



vebiltdervan wrote: And by "real reform", you mean slashing the state's social programs. You're free to hold your opinion, but you're not free to have your own majority in the state legislature.
Well by real reform I mean we should shoot all the liberals.  ;)  But realistic reform should start with pensions.  There are plenty of articles in this thread that talk about the challenges California will have to not only pay for them but to battle the unions in fixing them.

The other thing California can do is take advantage of the MASSIVE shale oil reserves it has.  Again, this state has basically hit the jackpot.  The state that should not fail.  I've read reports that say it has 2/3rds of America's shale oil reserves.  But will the greens allow them to take advantage of it?  And if they do, will the money just be wasted?

** in fact here is an article that talks about it.  "But California has Saudi Arabia-scale oil resources, notably in its largely untapped Monterey shale field...."

http://online.wsj.com/article/...=California+oil



"You have undertaken to cheat me. I won't sue you for the law is too slow. I'll ruin you."  - Cornelius Vanderbilt

Last edited 1/19/2013 12:45 PM by fldore

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Posted: 1/19/2013 2:39 PM

RE: California lunacy 



vebiltdervan wrote: And by "real reform", you mean slashing the state's social programs.

Many social programs, both at the state and federal levels, need to be reduced ("slashed" sounds so much more heinous than "reduced"). Public (and private) pensions and social security are examples. They were established at current levels many years ago when the demographics were entirely different. Spending on these types of programs at current levels is unsustainable.
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