acortes.com » California

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.

With only a few weeks to go until February, the state of California has still not resolved its budget crisis and will run out of cash very shortly. The state Controller, John Chiang recently suffered a mild heart attack. Not surprising, since he oversees the state’s cash flow and has recently warned that California will have to soon pay its workforce and contractors with with IOUs. I will not be surprised if California soon joins the growing list of states asking for federal assistance (bailout money) from the incoming Barrack “H is for Hope” Obama adminstration.
Here is a recent interview with Mr. Chiang, followed by an appearance from our Governator:

Looks like California’s finances are getting worse as each day passes by. As reported by Bloomberg, these are the toughest times faced by California since the great depression.

Among the developments:

The state “will begin delaying payments or paying in registered warrants in March” This means that vendors and contractors will be paid with IOUs. Would you take a job that offered to pay you in promises to pay at an unspecified date in the future?
State controller John Chiang warns the state’s cash account will decline to $882 million by February, and be negative in March. The 8th largest economy in the world. Bankrupt.

Forget Cyber Monday. Today was Manic Monday. Today’s meltdown on Wall Street serves as a reminder that things are not looking good for our country and our economy.

Here are the major economic news stories that unfolded today:
It was declared today that we are officially in a recession. Oh, really? Gee, haven’t noticed.
The Dow Jones lost $679.95, or 7.70%, of its value today. I have to admit that all these triple digit drops we’ve had the past three months have made me numb. The worst part is that this is not over yet, as more of these drops are coming.
Pentagon plans to deploy 20,000 army troops inside the United States Apparently they are being deployed in preparation for terrorist activities and for “domestic catastrophe.” I believe they will be used to help the bubbling civil unrest that will boil over in the event our economy collapses.
The Governor of California has declared a state of fiscal emergency, saying the State will run out of cash by February or March of 2009 For those of us in California, this spells disaster. Think about it. The only way they can close the budget gap is to raise taxes, cut services, or both.
Finally, it appears the Bush administration gave in to bank lobbyists and ignored warnings to regulate subprime loans. Yet another thing Bush failed to do. This is not a partisan jab, as the Democrats (Bill Clinton) are also to blame for this crisis for their actions in the 1990s. Ralph Nader is right again. “The principal difference between the Republican and Democratic parties is the velocity with which their knees hit the floor when corporations pound on their door.”