Friday, January 7, 2011

California Death Spiral

A few days after California Socialist Governor Moon Beam Jerry Brown was sworn into office, he announced an initiative in June to raise taxes to fund public schools. This is a pay back to the teachers union in California that donated $3.5 million to Brown's recent campaign for Governor, so this announcement is no surprise. Whose bread they eat, whose song they sing. What is a surprise is the stupidity of it all. California is on a death spiral that has been happening for years. In 2010 alone, 153 companies left California and moved to Texas.

This outward business migration has actually been happening for more than 20 years because California has among the highest state taxes in the nation, crazy employment practice laws and wacko environmental regulations. In fact, California recently enacted CAP & TAX,which was sustained by the voters in the last election, which will raise the cost of energy for all and push what ever manufacturing is left in California out of state. And, in the last 25 years, California went from having over 200 major companies, with 5,000 employees or more, headquartered in the state, to around 100. In that same 25 year period, Texas went from having around 100 major companies headquartered in the state to over 200. So California has completely reversed its positioning with Texas in a 25 year period as a result of California's poor business climate. And, the few big companies still headquartered in California, have pushed expansion and/or new operations to other states, or overseas rather than grow in California.

The Socialists that control Sacramento and their public employee union supporters have not only driven companies and jobs out of California, they have bankrupted the state. In addition, it is estimated that it cost about $10 Billion a year to support illegal aliens in California, with no end in sight. Currently, California is projecting a $28 Billion budget deficit for 2011. And, while California can't print money, the state has been going to the street for years to sell what are junk bonds at comparatively high interest rates to fund annual operating expenses, rather than new schools, roads, bridges and other capital projects, that are the original purpose for selling bonds. Recently, the state attempted to sell $10 billion in bonds and was only able to sell $6 Billion, which is an indication that the party may be over.

Socialists in California assumed that President Obama and the Socialists in Congress would bail them out because California is "too big to fail". That was before the Republicans took over the House of Representatives making a bail out improbable. Now their only hope is that the Federal Reserve will step in and buy California Bonds. If that happens it will cause a firestorm and demands for Fed Chairman Bernacke to resign. So where do we go from here?

At some point soon the rubber will hit the road. Either the Socialists controlling Sacramento will have to make draconian cuts, which will cause riots in the streets like in Greece, or the state will most likely default on its obligations, one way or another. Tax increases are certainly not the answer because if taxes are increased, it will only push more companies and jobs out of state faster. California is the poster child for what is happening in Washington, which to date has resulted in a $14 Trillion National Debt. The majority of people in California must be on medical marijuana because they are in La La Land as they continue voting for Socialists and initiatives that are bankrupting the state. Perhaps one day, the grown up's in California will wake up and throw all these characters out of office; but I would not hold my breath.

The people of California like the people of the United States must elect Conservatives to take back that state and our country that support free market capitalism, limited government, lower taxes and less regulation, a balanced budget, term limits, real education, energy and health care reform, a strong national defense, including securing our border and fighting Terrorism, the right to bear arms, the sanctity of life and family values that are the foundation of our nation. While this is the platform supported by the majority of Americans and the only way to restore economic growth and job creation in our country, sadly California is in another universe.

Most important, we must elect Conservatives in 2012 and 2014 who will adhere to the US Constitution, as written by our Founding Fathers, not as contrived by the left wing media, our current, or former Presidents, Congresses, or the Courts. While California may be lost, we must take back our country in 2012 and 2014. We can do it. We must do it to preserve our freedom, our nation and way of life for the sake of our children and grandchildren.

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