California Countdown

Written by: Evrviglnt on Wednesday, June 10th, 2009

What effect will the financial collapse of California have on the nation’s economy?

California State Controller John Chiang warned that the state’s finances are nearing a meltdown if a balanced budget is not approved in a timely fashion.

Chiang said the state’s cash balance is dangerously close to insolvent. The state is operating on the proceeds of revenue anticipation notes and internal borrowing. That is expected to get the state through June 30, but that’s about it. There is little reserve to carry into protracted budget negotiations, which usually happens with the California budget. Chiang said the state will exhaust all available cash sometime in July.

“Without immediate solutions from the Governor and Legislature, we are less than 50 days away from a meltdown of State government. This presents a terrible threat to California’s economy and to the State’s delivery of basic public services,” said Chiang. “A truly balanced budget is the only responsible way out of the worst cash crisis since the Great Depression.”

The fall of California is the impending fear you see in President Obama’s eyes right now.  Gas prices are rising, the housing market is on the brink of horrendous devaluation, the government is Trillions of dollars in debt and the world plots to call in their bets.  The mismanagement of a state economy that ranks as one of the world’s largest is unforgivable, mostly because political greed drove California into a 24 billion dollar hole.  The failure of the propositions last month brought promises of deep cuts in government programs by Governor Arnold Schwarzenegger; his desperation is obvious in the budget he just offered:

Schwarzenegger’s austere budget plan includes the elimination of Cal Grants, state-paid financial aid for lower-income students; Healthy Families, a program that provides health insurance to nearly 930,000 children and teens; and CalWorks, the state’s welfare program, which serves about 530,000 families. The state’s in-home nursing care for the elderly and disabled would also be severely curtailed.

The Democrats are going apoplectic.  Their plan involves borrowing money from a rainy day fund that doesn’t even exist yet – it’s in the governors budget he just offered.  They’re sparring over it like it’s real or something!  That’s how delusional it’s getting here, no wonder Obama refused to loan California money!

“We’re not going to decimate programs that save people’s lives,” the Democratic leader declared, setting markers for contentious negotiations with Republicans and the governor in the next several weeks.

But..how are you gonna…?

The Democratic leader also said he would not rule out pushing to raise fees and end tax loopholes for businesses to close the budget gap after program cuts are made. He vowed that the Legislature would act by the end of the month to head off a cash crunch this summer that could threaten the state’s solvency.

Oh.  Raise taxes on businesses.  Such logic has got to be drug induced, or the state is being run by a bunch of drunk monkeys in Sacramento.

drunkmonkey

But there is a cool interactive “California Budget Balancer” over at the Los Angeles times – try your hand at running California!

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