Wednesday, June 12, 2013

Socialist California - Government Fiscal Insanity

It has been reported that there are 20 million people in California, out of about 35 million, that get some kind of government check.  These California residents are either on Welfare, Food Stamps, Disability, Social Security, Medicare, a government pension, a government payroll, student aid, or in the military.  Is it any wonder that there are no Republicans in a state wide office.   The Socialists have done their work well.  They have pushed California both over the tipping point and toward bankruptcy, since California has more than $300 billion in unfunded liability for local and state pensions; not to mention billions of dollars of other debt that eventually must be repaid.  

Governor Moonbeam Jerry Brown is trying to restrain spending; but he faces a state legislature controlled by even further left wing Socialists that are owned lock, stock and barrel by the public employee unions.  This is the reason Brown pushed through higher sales and income taxes in the last year that will both be job killers.   And, the proof is in the numbers.   Since California is a high tax and regulation blue state, big companies have been leaving for years. 

In fact, 30 years ago, there were about 250 companies with 5,000 employees or more headquartered in California.  Today that number is around 106.  In the same time period, business friendly Texas, has grown from about 80 large companies, 30 years ago, to 225 headquartered in that state.   Anyone with a brain, must conclude that Texas is doing something very right and California is doing a lot very wrong.  What few major companies remain headquartered in California have moved major operations out to avoid California corporate income taxes and burdensome regulations. 

And yet the fiscal insanity continues.   The state of California actually advertises on the radio encouraging people to apply for Food Stamps, MediCal, College Aid and other government benefits as though the number on the dole is not large enough.  Socialists in California just assume that they can tax the rich more and more as though the rich can't and won't vote with their feet, which has been happening for years.  If current trends continue, California will be left with Takers and fewer and fewer Makers and then what. 

California Socialists will then do what they always do and this is borrow more money to take care of their PEEP's to win elections.   California bonds are rated as junk bonds because California's outstanding debt, in the billions of dollars, is huge.  As such, California must pay very high interest rates to borrow money.  Various cities in California have already filed bankruptcy and more will follow suit. 

The California story is the Obama federal government story.  The difference is that the federal government is just printing money, which eventually will destroy the value of the dollar, to fund the federal deficit.  What Socialists have done to California, Obama is doing to the United States.   The outcome will be the same; economic collapse.  It is only a matter of time. 

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