California has gone to Hell without the hand basket (they never bought one). The State government is broke (through no fault of their own). You could admonish them for not saving for that rainy day, but hell, it never rains here! Of course what can you expect from the legislature; more taxes or more motel sex? You need a 2/3's majority to raise taxes. Does the motel have a pool?California is issuing funny money to pay their bills. The Banks stopped cashing these warrants Friday. They are not cash and there is a part of the US Constitution that says:
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; . . . ..Of course the fly-boys running the government are stating that these certificates are securities and need to be treated as such. They are going to sell you a toll booth to go with the bridge you just bought. Most vendors servicing the State will stop delivering product for good reason. Instead of taking a roll home every week, State workers will now be packing toilet paper in their lunch box for personal use.
In theory, a warrant has to be discounted to raise cash today. The trouble is, it might be 50 cents on the dollar. Many people in this State live from paycheck to paycheck. It kind of makes you wonder what happens to them. Someone sooner or later will latch on to the idea of buying these warrants at half price and paying their property taxes with them. The last thing the state needs is this stuff coming back at them. It’s like a snake eating its own tail.
Then there is the rumor that the Governator is going to sell Boardwalk and Park Place . . . . and as we pass GO, Obama is going to give us a $200 stimulus package . . . . . .It kind of has the feel of a Parker Brother's board game.
23 comments:
An unverified source claims that he tried to pay a speeding ticket with one of these IOU/warrants; the State wouldn't take it. Cash, check or charge only, thank you very much.
Hi Anon 12:37
It makes sense to me on the city level--cash or take a walk. They need to pay their bills also.
Jim,
As a taxpayer, I'm taken back by your comment that California's government is "broke through no fault of their own." None? Nadda? Zip? If not the fault of the elected officials of your state... then where do you place the blame? The buck should stop with these folks.
The statement suggests that Parker Brother's should have created the game with one player having an unlimited bank roll similar to the Treasury Department.
Currently I see no winners in California's melt down. Not only will Boardwalk and Park Place have to be sold, but the Governator will have to produce millions of more Community Chest cards just to stay in the game.
ATP
Btw, keep up the great work with the site! The country's economic movie has turned into a tear jerking chick-flick and I'm running out of popcorn!
Hi ATP
What I meant was that the downturn in the economy gave the State Legislature a financial problem. As long as there was money to pay for these programs no one cared.
Now that the money isn't there for all of this stuff, their spending has come into question with good reason. You have to really question these 100k PERS retirement plans the State offers. There ought to be a cap on retirement benefits at say 40K.
I can remember playing Monopoly as a kid and when we ran out of money and hotels, we used chess pieces for super hotels and created $1,000 bills to keep the game going. The Federal Government's actions are quite similar.
Glad you still like the site. My reader count is down about 20 percent. I guess as things get worse, no one wants to be reminded about it.
Take care
Jim,
Perhaps your readership is down because folks are frustrated and just don't have much more to say on the subject. I can't believe its from bad OP-EDS from you, your articles are very informative... and sometimes downright funny!
I have to disagree with your assertion that the downturn caused California's financial ruin. Of course none of your politicians will accept any of the responsibility (that would be completely Un-American).
In my opinion, California's law makers have driving business and the folks out of your state through higher taxes and unrealistic regulations for many years now. And by the looks of it lately, they will be leaving by the droves now.
Jim... your now the Governor. What would you do to get your state out of the crapper? Oh, and don't forget to shut the lights off on your way out!
ATP
Hi ATP
I think that the biggest problem is that the Legislature thinks of business and wage earners as taxpayers. If they considered us customers, they would realize that we have the ability to vote with our feet.
Congress is about to give us health care. What business wants the added tax hassle? Make it in Mexico and ship it to the US. Business will always try to maximize profits.
Business has been draining out of the state for years now. The politicians running the state government haven't got a clue to the mess they have created. Revenues are short of projected expenditures by a mile.
The same thing happened during the 1930's. State legislatures raised taxes and watched tax receipts fall through the floor.
The only way I can see to level the playing field is for it to be cheaper to produce things here than in a foreign country. That seems a little too real to happen.
Jim,
Agree that our government is about to cram Obamacare down our throats (the Dems are on a mission), but don't forget about cap-and-trade lurking in the background that will also be disastrous for industrial business followed by the soon to be unemployed through the process.
Even more jobs will be lost and as you say business will flee to Mexico. Many healthy Americans will be standing around looking for some change they can believe in.
I agree with the "uninsured" that health care is an issue for the country, but definitely not the most important and surely one that the government cannot fix under any conditions. But I'm confused how (even at 100% healthy through Obamacare) unemployed Americans are better off.
Folks running from state to state (voting with their feet) chasing the American dream are finding fewer options. I don't blame any business owner seeking to be profitable from leaving the country. Maybe in a few years we will all be looking for the "Mexican" dream as the American one has died.
ATP
Hi ATP
The biggest mistake you and I can make, is to think that things will continue as they have been for the last 60 years. Something has to give. Remember when everyone said housing will only go up?
I have maintained that the National Debt in tandem with retirement benefits is the big bubble. It could bring down our government. People are pretty fed up with the hidden taxes and the waste built into the system.
The thing that could kill health care is the statement that was made up on the hill; "Whatever health care plan is good for the country is also good for Congress." Those "crooks" will think twice before they cut their own throat.
It is rather obvious that what we are doing now can't continue much longer. Something has to give. There is one straw too many on this camel.
I don't look at it as doom and gloom, but rather a new beginning, a leveling of the playing field.
Jim,
Don't get me wrong, I'm on board with change... just not what is being handed to us. I want a change to something along the lines of more Freedom. Freedom from Big Government, Big Buisness, and Big Taxes.
We need a government, just not the one that has evolved over the last 60 years. Add in irresponsible citizens with multiple maxed out credit cards with unrealistic credit limits... and here we are.
The Govy, Big business and Special Interest Groups are all in bed together and turning the country on its head. The Government, SIG's, and about 20% of the population get all the action... while the middle class taxpayers get stuck providing all the after sex cigarettes and mindless cuddling!
Yes... Change we need Jim and its going to take something very big to make it happen.
ATP
Your reference to the constitution is very interesting.
I have been wondering lately why the communists are winning the economic front. Cuba itself may have had equal growth as China had we not cut it off economically.
Are the latest indicators a way to say that corrupt capitalism is worse than communism/socialism?
"The only way I can see to level the playing field is for it to be cheaper to produce things here..."
True. It is so bad now that I noticed it costs more to buy raw materials to make a product than it costs to buy a finished Chinese version off the shelf!
while the middle class taxpayers get stuck providing all the after sex cigarettes and mindless cuddling
I love it that is best summary of jam we are in that I have read for a while. Thanks ATP you made me laugh.
As for traffic on site Jim, this is just a theory but us people in the northern climes are just outside working on golf game and enjoying not having to shovel snow.
Hi Rob
I thought that up in Nova Scotia that you could ice fish and golf at the same time (you use the same hole) Plus shoveling snow would ruin your swing. Most wives when given the choice of sex or shovel the drive way, will shovel the driveway;>) So I'm not sure we can blame the drop in readers to the good weather.
Take care
Hi Anon 12:55
Probably any style of government abused enough will fail. That worries me.
China is a special case, right now there is a speculation frenzy going on over there. Some people in the know have forecast a collapse of the Chinese financial system in the next week or two. Investment graphs are through the roof, speculation is rampant.
Cuba on the other hand lives within its means. They have been living in a depression for 35 years.
Your point is well taken that it is cheaper to buy goods from other countries. Every two weeks when I iron 15 of my 50 shirts, I can't help but notice the place of manufacturer on the label. I take a trip around the world when I iron my shirts. I'm guessing that probably only two of my shirts were made in the USA and they could be 20 years old.
Thank you for your comments.
Wish you would post more often!
I think the infrequent posts may affect reader count. I don't check the site as often as I used to because posts seem more irregular (or is it my imagination).
Hi Ca
I have been squeezed for time since May. I passed my Networks+ exam in June and still have my Security + to take at the end of July. So I have been studying quite a bit.
I'll be back on track in August.
Haven't read the article yet. Must stop laughing from the picture. LOL I love it!
Hi Tyrone
I found the pic on the INTERNET and there were no credits attached. I try to give people credit for their work but in this case I came up empty handed.
Glad you liked it.
Jim
Wife doesn't have to shovel as I have someone come and plow driveway with tractor. I just make sure I'm around to supervise and limit her options. As for golf the reason why my game improves as the summer wears on is the holes are getting bigger in the ice :)
I have to say getting a tax refund that is IOU would be major downer. You guys must be pretty laid back out on left coast because if government tried to do that here there would be riots and a revolution.
From the right coast
Rob
I know what I would do if I were Governator. Sell ALL the freeways to the Chinese! That would give the state's debt a decent whack, plus free up money that was being used to maintain the frwys and service the debt. Then the hard, difficult part begins for almost to a person, NO ONE wants spending cuts or higher taxes!
Hi Ed-M
If the Chinese bought the infrastructure, the first thing they would do is put up toll booths.
So you can bet your bottom dollar that the new toll booths will be made in China and paid for by the State of Kalifornia.
Hi Rob
Glad to see your golf game is improving.
The biggest problem I see with these IOU's is counterfeiting. It's probably just a misdemeanor plus there is a three month lag time before you know you've been had if you bought one.
If these IOU's don't stop soon, a lot of golfers out here might want to take a practice swing or two at a legislator.
From the "What's left?" Coast, take care
Jim
Jim,
Kali4na is in bad shape, but it hardly is the only one. Its size magnifies all the numbers. Since elections are frequent, the political class generally reflects the will of the majority of the people. What Kali4na gets is what the people-- at one time or another in the past-- want. Now if the people of Kali4na don't want this mess to continue, then elect a different class of people to fix things. Of course, the people may choose death over change, which I doubt. They may just be waiting for the ship to finish sinking to the bottom before attempting to raise it. The good news is, the sinking is quite fast.
As for the Obama Healthcare, here comes another massive entitlement program. This ship will sink before it gets to leave port. We just cannot afford more entitlement. But the problem with healthcare remains. It's a cancer on the economy, and if left untreated, it will take down this country, much like what banking is doing to us.
Hi Anon 3:15
I agree things don't look good at all.
I don't think that changing politicians will solve anything. Our government has gotten too big and expensive.
As you suggested, there is no money coming in for the Senior citizens free health plan (Medicare and Medicaid) that's already in place.
Each retiree over the age of 65 has the ability to draw $500,000 to 2 million a year in health resources. Plus there won't be any cost containment because the "government" picks up the tab.
The only political solution is to charge those not yet retired for these provided benefits. You could label this new tax as "health insurance."
If we forget about labeling this as health care and look at it as a tax increase, the government needs about $5,000 more per year from each and every taxpayer.
It's a little like FDR's Social Security tax. It was an immediate income tax that hit every worker. This "retirement plan" gave everyone a warm and fuzzy feeling. Congress has borrowed every penny of it. Now they need more.
I think your right, this ship will sink in port. All they have to do is untie it from the dock.
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