California Governor Jerry Brown Proposes Spending Cuts

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  • #2
skippy1729
California Governor Jerry Brown, faced with a $25 billion deficit has proposed over $12.5 billion in cuts, nearly across the board.
Where is he going to get the other $12.5 B. They are headed for the cliff and I can't imagine who wants their bonds. Maybe the State pension funds would like to buy them?

Skippy
 
  • #4
149
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Where is he going to get the other $12.5 B. They are headed for the cliff and I can't imagine who wants their bonds. Maybe the State pension funds would like to buy them?

Skippy
http://www.mydesert.com/article/20110111/NEWS01/101110310/Brown-proposes-deep-cuts-tax-hikes [Broken]

"Having the Legislature call a special election in June to give voters an opportunity to continue the current increases in the income, sales and vehicle taxes for another five years.

The taxes are set to expire this year. If approved by voters, the taxes and proposed funding shifts would generate $12 billion in revenue.

Brown said his spending plan for the fiscal year that begins July 1 is intended to end the state's continual deficits and balance the budget for the next several years without borrowing money to do so.

“It's better to take our medicine now and get the state on a balanced footing,” the newly elected Democratic governor said in releasing his plan."
 
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  • #5
Pengwuino
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And it won't pass. It never passes. This state, for supposedly being so educated, is full of morons.
 
  • #6
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And it won't pass. It never passes. This state, for supposedly being so educated, is full of morons.
I have no sympathy for CA. Then I see ideas like this being kicked around.
http://www.economicpolicyjournal.com/2010/11/will-fed-print-money-to-bailout.html

"Will the Fed Print Money to Bailout California?
Speculation is brewing that this just might be the direction the Federal Reserve may be headed in for various cities and states. It's clear that many state and local governments are in major financial trouble."
 
  • #7
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Will the Fed Print Money to Bailout California?
Goodness, I really hope the fed doesn't stoop to bailing out a wayward state. Such would be the epitome of insanity.
 
  • #8
Vanadium 50
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A federal bailout of California would have to be done on incredibly punishing terms. Otherwise every state would spend as much as they wanted, tax as little as they wanted, and would let their neighbors (through the feds) pay for it. It would also be an enormous transfer of wealth from red states to the bluest of blue states - and from the poor to the wealthy. (California has the 9th highest median household income)

However it was done, it would have to be so bad that the other 49 states would be scared off. However painful living within their means would be, this would have to be worse. How bad? I suspect you would find people looking at Reconstruction as the closest historical parallel.
 
  • #9
CAC1001
Can the state go through bankruptcy in the way a corporation can (like Chapter 11), where it continues operating, but just must go through specific changes to come out leaner?
 
  • #10
CAC1001
  • #11
Vanadium 50
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Can the state go through bankruptcy
It's never happened. Which laws apply is not a simple thing, though.
 
  • #12
Otherwise every state would spend as much as they wanted, tax as little as they wanted, and would let their neighbors (through the feds) pay for it.
Isn't that just the same as transferring taxation to the federal government instead of state taxes?
 
  • #13
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Isn't that just the same as transferring taxation to the federal government instead of state taxes?
An argument centered around unfundated mandates (Medicaid) by the states might gain traction?
 
  • #14
A federal bailout of California would have to be done on incredibly punishing terms. Otherwise every state would spend as much as they wanted, tax as little as they wanted, and would let their neighbors (through the feds) pay for it. It would also be an enormous transfer of wealth from red states to the bluest of blue states - and from the poor to the wealthy. (California has the 9th highest median household income)

However it was done, it would have to be so bad that the other 49 states would be scared off. However painful living within their means would be, this would have to be worse. How bad? I suspect you would find people looking at Reconstruction as the closest historical parallel.
That's one of the most plausible and frightening things I've heard in a very very long time.
 
  • #15
Vanadium 50
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What's plausible? That California will default? Or that the reaction by the rest of the country will be as I described?
 
  • #16
What's plausible? That California will default? Or that the reaction by the rest of the country will be as I described?
The latter.
 
  • #17
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I haven't had a chance to wade through all of this yet - just thought I'd share.

http://www.ebudget.ca.gov/StateAgencyBudgets/4000/4270/department.html [Broken]
 
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  • #18
PhilKravitz
It seems the worst case is California can not sell bonds and it must cut spending to match income. When that happens I want to move to California. They will have a realistic budget. Of course they will need to pro-rate pension payment to say 50% on the dollar. They might also want to consider capping pension payments to no more than $80,000 per year.
 
  • #19
It seems the worst case is California can not sell bonds and it must cut spending to match income. When that happens I want to move to California. They will have a realistic budget. Of course they will need to pro-rate pension payment to say 50% on the dollar. They might also want to consider capping pension payments to no more than $80,000 per year.
They should, but it seems they have some kind of economic suicide pact with themselves. Maybe they took that Tool song to literally and tried to hasten the process. The whole endeavor of California is kind of ridiculous at this point actually, but nature has such direct answers to our problems. Shake shake shake... shake shake shake... shake your faultline, dooba doop dooba dooby!
 
  • #20
149
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They should, but it seems they have some kind of economic suicide pact with themselves. Maybe they took that Tool song to literally and tried to hasten the process. The whole endeavor of California is kind of ridiculous at this point actually, but nature has such direct answers to our problems. Shake shake shake... shake shake shake... shake your faultline, dooba doop dooba dooby!
Perhaps they should offer Mexico 10% of their total prisons budget (a 90% savings would be very helpful) to take all of their prisoners - then take 10% of the savings and (add some beds and curtains) redevelop the prison properties into Medicaid-only hospitals - staffed with med students and interns?
 
  • #21
Perhaps they should offer Mexico 10% of their total prisons budget (a 90% savings would be very helpful) to take all of their prisoners - then take 10% of the savings and (add some beds and curtains) redevelop the prison properties into Medicaid-only hospitals - staffed with med students and interns?
...

That...
...

I don't honestly know, but especially the notion of a teaching environment and the rest... It wouldn't pass, but would it work? I kind of like the notion... I really like it actually. You'd need a FEW attendings, but not many. Bam, Michael Moore can have his "utopia". *gag*
 
  • #22
PhilKravitz
Perhaps they should offer Mexico 10% of their total prisons budget (a 90% savings would be very helpful) to take all of their prisoners - then take 10% of the savings and (add some beds and curtains) redevelop the prison properties into Medicaid-only hospitals - staffed with med students and interns?
I think you are onto something here. They could outsource to Mexico prisons and all people on welfare and pensions. They could cut much of their spending 90%. If they can get past the unions they can bring in H1B visa folks to teach and do all state work at a 50% savings. I think we have it solved.
 
  • #23
I think you are onto something here. They could outsource to Mexico prisons and all people on welfare and pensions. They could cut much of their spending 90%. If they can get past the unions they can bring in H1B visa folks to teach and do all state work at a 50% savings. I think we have it solved.
Given the state of that state, I'm not sure that it wouldn't be a positive change all around...
 
  • #24
mheslep
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This is a revealing, on the ground, tale from historian, author, and multi-generational California resident Victor David Hanson:

"[url[/URL][/I]

[QUOTE]The last three weeks I have traveled about, taking the pulse of the more forgotten areas of central California. I wanted to witness, even if superficially, what is happening to a state that has the highest sales and income taxes, the most lavish entitlements, the near-worst public schools (based on federal test scores), and the largest number of illegal aliens in the nation, along with an overregulated private sector, a stagnant and shrinking manufacturing base, and an elite environmental ethos that restricts commerce and productivity without curbing consumption.
[...]
In two supermarkets 50 miles apart, I was the only one in line who did not pay with a social-service plastic card (gone are the days when “food stamps” were embarrassing bulky coupons). But I did not see any relationship between the use of the card and poverty as we once knew it: The electrical appurtenances owned by the user and the car into which the groceries were loaded were indistinguishable from those of the upper middle class.

By that I mean that most consumers drove late-model Camrys, Accords, or Tauruses, had iPhones, Bluetooths, or BlackBerries, and bought everything in the store with public-assistance credit
[/QUOTE]
 
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  • #25
This is a revealing, on the ground, tale from historian, author, and multi-generational California resident Victor David Hanson:

"[url[/URL][/I][/QUOTE]

And water...

Ever read the book: 'Cadillac Desert?'... good read.
 
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