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View Full Version : How dire is California's financial situation? We keep hearing warnings, but nothing is ever done


astro
10-28-2009, 12:44 PM
Are people warning about California's pending financial collapse crying wolf? It seems California been on the brink for (seemingly) years now but nothing ever really gets done re the situation. How do they keep hanging on if a system collapse is really just around the corner?

Voyager
10-28-2009, 03:35 PM
They appear to keep pushing the (ever bigger) problem out until next year. It is going to get worse this year, since the courts have ruled a lot of the cuts illegal.

If they postpone it until the recovery kicks in, then tax revenues will go up, the deficit will go away, and everyone will go back to passing propositions that cost money while refusing to raise taxes to pay for them again. More than 50% of Californians are against changing the constitution to allow tax bills to pass with a majority instead of 2/3 vote, which shows the problem right there. If 55% lets you spend, but not pay for it, you are screwed.

elucidator
10-28-2009, 04:39 PM
I fear the only "solution" to California's problem lies in massive depopulation, half of the people there have to leave, even if they don't run out of money, they're gonna run out of water. Spread them out over the rest of the states, everybody takes their share.

Except Minnesota. Too cold, they wouldn't make it. Iowa. Iowa is nice....

alphaboi867
10-28-2009, 05:25 PM
California needs to scrap her constitution and start over from scratch. The state has degenerated into a state of glorified mob rule.

Bryan Ekers
10-28-2009, 09:01 PM
Sacramento needs to
unify its efforts to
create more employment opprtunities and invest in
knowledge and edudation. Surely some new
ideas can be floated that
take the long view which won't
undermine
prosperity.

smiling bandit
10-28-2009, 10:35 PM
I have no idea if that was meant to be some form of exotic free verse, but if so, it was a lousy poem.

California's budget has been growing much faster than its revenues for years, and the state as a practical matter can't tax much more without risking severe and long-term economic decline, particularly as it would come in a down economy. It simply can't keep growing the budget like that. But taxation is not a serious answer: it already has high taxes and sending them much higher would drive out the businesses it needs, particularly smal business. I'm not sure it practically *can* just wait out the recession.

The Controvert
10-28-2009, 11:07 PM
I have no idea if that was meant to be some form of exotic free verseIt's a reference to this thread. (http://boards.straightdope.com/sdmb/showthread.php?t=537712)

akwally1
10-29-2009, 01:43 AM
I have no idea if that was meant to be some form of exotic free verse, but if so, it was a lousy poem.

Well,
Hilarious though it may be,
obviously it is meant to be viewed
only by those in the legislature.
Surely they could glean the meanings with a little
help from the Governator.

Bryan Ekers
10-29-2009, 02:44 AM
Just out of curiosity, if Maria Shriver ran for governor, could she win?

smiling bandit
10-29-2009, 11:11 AM
Well,
Hilarious though it may be,
obviously it is meant to be viewed
only by those in the legislature.
Surely they could glean the meanings with a little
help from the Governator.

:smack:

Argh.

Infinite money
Are the sinews of the state
Much relies on them
But blind as we are
Look at the cost
In bad government
Ninety-nine times its revenues
Destroyed by foolishness

Markxxx
10-29-2009, 01:59 PM
Remember NYC in the 70s, what a disaster that was. On "Barney Miller" every other joke was how broke NYC and how awful it was and how it'd never recover. Other NYC themed TV shows had similar jokes about what a mess NYC was.

But New York City recovered nicely and not only regained the population it lost but gained more than it ever had. Time will straighten it out one way or another.

Already immigration is slowing to California while Texas and Florida as well as New York City have been attracting more and more new immigrants (I'm talking legal).

Like GM, California is simply too big to be allowed to fail, so even in a very bad scenario it'd be bailed out, no politician is going to run the risk of having California go over to the "red" side again.

RTFirefly
10-29-2009, 03:54 PM
California needs to scrap her constitution and start over from scratch. The state has degenerated into a state of glorified mob rule.You're kidding, right?

The fundamental problem with respect to California's governance isn't that of a majority forcing its will on a minority. It's an amendment to their state Constitution from a few decades back that allows 1/3 of the legislature to block any new taxes.

Get rid of that, and California will be fine.

alphaboi867
10-29-2009, 06:22 PM
You're kidding, right?

The fundamental problem with respect to California's governance isn't that of a majority forcing its will on a minority. It's an amendment to their state Constitution from a few decades back that allows 1/3 of the legislature to block any new taxes...

Yeah, allowing any special interest group with enough resources to put measures directly to the voters the require increase spending without providing a way to pay for it isn't a problem at all. :rolleyes:

Doug Bowe
10-29-2009, 07:29 PM
You're kidding, right?

The fundamental problem with respect to California's governance isn't that of a majority forcing its will on a minority. It's an amendment to their state Constitution from a few decades back that allows 1/3 of the legislature to block any new taxes.

Get rid of that, and California will be fine.

And at least 1/3 of the legislature will always block something. As The Economist points out California districts have been gerrymandered into blue or red areas. The winners will be decided in the primaries, not the general election. As a result you have people winning on deep ideology on both sides. And those ideologies go to Sacramento and block each other.

Voyager
10-29-2009, 08:16 PM
You're kidding, right?

The fundamental problem with respect to California's governance isn't that of a majority forcing its will on a minority. It's an amendment to their state Constitution from a few decades back that allows 1/3 of the legislature to block any new taxes.

Get rid of that, and California will be fine.

It will help, but it won't make things fine. We've got somewhere over 500 amendments, many mutually contradictory, that mandates all kinds of spending and programs without mandating revenue increases to pay for them. Most legislators at least to try to figure out how to pay for the goodies. The average California voter, though, is like a chimp with a credit card. So, we need to reduce the initiative process by a lot.

The only thing I'm worried about is that until the people against taxes start feeling the pain from the consequences of cutting spending (and letting people out of jail might be a good start) a new Constitution would be just as bad.

Voyager
10-29-2009, 08:18 PM
And at least 1/3 of the legislature will always block something. As The Economist points out California districts have been gerrymandered into blue or red areas. The winners will be decided in the primaries, not the general election. As a result you have people winning on deep ideology on both sides. And those ideologies go to Sacramento and block each other.

The problem is, they are not blocking spending but blocking revenue generation, because there isn't a 2/3 rule for spending. If there was, I think people would rise in revolt when schools and cops aren't paid for.

smiling bandit
10-29-2009, 11:03 PM
But New York City recovered nicely and not only regained the population it lost but gained more than it ever had. Time will straighten it out one way or another.

It also took something like twenty years. And New York City had a much less ingrained structurally-bad situation than California. Yes, of course it can someday make a comback, but that's like telling Jews in the 1930's, "Not to worry. Those Nazis won't last forever."

(And IO bet you thought this post wouldn't be Godwinized, eh? Eh?! :D )

Fear Itself
10-29-2009, 11:16 PM
California needs to scrap her constitution and start over from scratch. The state has degenerated into a state of glorified mob rule.Yeah, we need to distill the power to rule down to an elite few. Preferably me and my friends. We'd show that mob what for.

elucidator
10-29-2009, 11:51 PM
I think maybe three is too small a number for a power elite.

Try2B Comprehensive
10-30-2009, 12:22 AM
Fuck California.

They're already fucked.

So why not?

mlees
10-30-2009, 11:06 AM
I think maybe three is too small a number for a power elite.

To be fair, that's how I read alphaboi867's post as well.

"We need to be ruled by an enlightened [and presumadely benevolent] elite, instead of the unwashed masses."

Voyager
10-30-2009, 12:25 PM
To be fair, that's how I read alphaboi867's post as well.

"We need to be ruled by an enlightened [and presumadely benevolent] elite, instead of the unwashed masses."

Kind of the way the rest of the country runs.
You don't have to talk about elites and unwashed masses to understand that complex proposals don't do well when voted on by the masses, driven by advertisements that are reduced to soundbites for and against, almost always inaccurate.
Sure Joe the Ditchdigger doesn't get why he isn't as good a judge of these issues as those elitists with law degrees who spend all their time studying the problem, with years of experience backing them up. This is where term limits come from too - and the result here is that the lobbyists are the only group in Sacramento with any real experience.

mlees
10-30-2009, 01:03 PM
Kind of the way the rest of the country runs.
You don't have to talk about elites and unwashed masses to understand that complex proposals don't do well when voted on by the masses, driven by advertisements that are reduced to soundbites for and against, almost always inaccurate.
Sure Joe the Ditchdigger doesn't get why he isn't as good a judge of these issues as those elitists with law degrees who spend all their time studying the problem, with years of experience backing them up. This is where term limits come from too - and the result here is that the lobbyists are the only group in Sacramento with any real experience.

I am pretty sure that other states are having fiscal problems too.

I also recall claims be made (and supported) that even the elites within the vaunted halls of Congress don't read the Bills they are voting on.

An elite benevelent government, patting us on our heads and telling us not to eat that because it's not good for us sounds patronizing and insulting to me.

I hate the bond approach to funding programs. Living on the credit card does not have a happy ending, usually. But I also hate the nanny state approach to governing.

Ruminator
10-30-2009, 01:18 PM
How do they keep hanging on if a system collapse is really just around the corner?

They may be near a collapse but the federal government will bail them out if absolutely necessary because of the "too big to let them fail" mentality. California is too big of a state with too big of an economy to let them fail! Wyoming, Alaska, etc will all have to chip in (indirectly) via more debt, higher taxes, etc to pay for California's fiscal problems.

Wednesday Evening
10-30-2009, 09:03 PM
I don't know how close system collapse is, but I do know that things are very bad, and every year there are no real fixes, just postponing the inevitable. For example, as part of this year's budget, the government moved the payout date for the last month of the fiscal year to the next fiscal year, so they only have to pay their employees for 11 of the 12 months this fiscal year. Look! Cost savings!:rolleyes:

When I am declared dictator of California, the following will happen: New constitution, no more 2/3 majority for budget approval, eliminate all current propositions and amendments (yes, prop 13 included), get rid of the initiative process and term limits, and require a balanced budget. That should just about do it. :D

Snnipe 70E
10-31-2009, 12:06 AM
You're kidding, right?

The fundamental problem with respect to California's governance isn't that of a majority forcing its will on a minority. It's an amendment to their state Constitution from a few decades back that allows 1/3 of the legislature to block any new taxes.

Get rid of that, and California will be fine.

Don't mean to be smart, but, are you saying just raise taxes and everything will be OK?

Snnipe 70E
10-31-2009, 12:11 AM
I
, and require a balanced budget. That should just about do it. :D

A balanced budget, now that is a new Idea. Ops wait isn't that already called for. I know we can use smoke and mirrors that will do the trick.

cerberus
10-31-2009, 12:14 AM
Maybe requiring a linkage between mandates and funding for said mandates might help? Decoupling the referenda from taxation begs a problem with unfunded or underfunded programs.

And it's mob rule versus constitutional republic (with elective representation). Unrestricted referenda remove the restrictions in play when things must go through legislatures.

Wesley Clark
10-31-2009, 01:07 AM
Could advances in biotechnology industries revive the California economy? The UC education system (as well as CalTech) are extremely good and cities like the San Francisco bay area (including Berkeley and San Jose) and San Diego are good growth areas for fields like biotech.

Could that field possibly create jobs and new tax revenues that would offset some of the lost revenue?

Wesley Clark
10-31-2009, 01:10 AM
As far as California's budget crisis, single payer healthcare would possibly save California $344 billion over 10 years according to the Lewin group.

http://www.pnhp.org/facts/single_payer_system_cost.php?page=3

So, in an ideal world (assuming those savings materialize) you just replace health insurance premiums with taxes and pocket the other $344 billion to fix the budget shortfall. Boom, you have a budget surplus of $10+ billion a year and universal healthcare. Everyone is happy. Except insurance companies and republicans.

Wesley Clark
10-31-2009, 01:11 AM
double post