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For those of us living in California, be prepared. This state is coming to a grinding halt economically, as the budget deficit will continue to grow as the people have resisted higher taxes to finance California’s out of control spending. The silver lining in all of this is the inevitability of small government, though there will be lots of pain as the state’s residents learn to live without some services provided by California. So far, the professor of Obamanomics has declined to bail out the state, which is about the only thing he has done right. My gut feeling though is that there will be some type of federal economic stimulus plan announced for California in the near future.
The Governor’s proposal to massively cut services such as welfare and educational assistance, among others, will cause even more restlessness among the needy, and could even lead to a substantial increase in petty theft and crime. Couple this with food and energy prices rising and you’ve got the ingredients for things getting real ugly real fast. If you’re keen enough to see what’s ahead, now is the time to act.

Although the State of California has still not come to terms with a new budget, the proposals in place to close the $42 billion budget deficit will continue to squeeze even more out of already suffering California residents. Here are some of the proposals on the table:

Annual California vehicle license fees: Will nearly double from 0.65% to 1.15% of the vehicle’s value.
Gasoline tax: Will effectively increase the price per gallon by $0.12.
California personal income taxes: increase of 2.5%.

If an agreement on the budget is not reached by this Friday, Governor Arnold Schwarzenegger vows to cut 20,000 state workers.
Article here.

Very sad report on the state of affairs here in southern California. With tomorrow being Thanksgiving, reporters are doing their once a year coverage on the homeless shelters and the food they give out. This year is different though. With the economy the way it is now, these places are serving more and more of those that are not homeless, but hungry, and perhaps homeless in the near future.

Food pantry visits up 41% in Los Angeles.
1 million lbs of food to food pantries per week not enough to cover demand. (It’s interesting to note that most of these foods come from donations, and when those inevitably dry up, things are going to get really bad.)
More and more middle class families are participating. (More signs that the middle class is shrinking.)
1 in 8 of Americans (36 million) live on the brink of hunger. (On the greatest nation on Earth. Unacceptable.)

Last week the Los Angeles Unified School District provided a letter to all employees regarding the financial crisis and how it is affecting the district. The most ominous statement:

LAUSD will not be able to make payroll by the end of the next school year…No one would get paid.

Being a former employee myself, and having friends that continue to work there, I am quite saddened at the sorry state of affairs our education system is in. Why is it that our government can come up with billions of dollars for struggling private companies, yet not one nickel for our schools? The only reason that makes sense to me is that education is not a priority for our leaders, no matter how much they continue to tell us it is. If it was, education would have no reason to be a victim of a mess it did not create. To show how ignorant our local leaders are about the true source of the problem, LAUSD’s own superintendent Brewer actually quoted former federal reserve Chairman Alan Greenspan in his letter, implying that the Chairman somehow is an oracle of truth rather than a contributer to the financial mess. Truly amazing.

Update: Two articles: One a Los Angeles Times article regarding education budget cuts in California, and a San Jose Mercury News article on the California State University System cutting enrollment for 2009 freshmen.