California Governor Jerry Brown Proposes Spending Cuts

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Discussion Overview

The discussion revolves around California Governor Jerry Brown's proposed spending cuts in response to a significant budget deficit of $25 billion. Participants explore the implications of these cuts, potential sources of revenue, and the broader economic context, including the possibility of federal bailouts and state bankruptcy. The conversation includes various perspectives on state financial management, public-sector unions, and the feasibility of proposed solutions.

Discussion Character

  • Debate/contested
  • Exploratory
  • Technical explanation
  • Conceptual clarification

Main Points Raised

  • Governor Brown has proposed over $12.5 billion in cuts, with state pensions reportedly spared from reductions.
  • Some participants question where the remaining $12.5 billion will come from, expressing skepticism about the state's financial management and bond market viability.
  • There is speculation about the potential for a federal bailout, with concerns about the conditions that would accompany such assistance and its implications for other states.
  • Participants discuss the possibility of California declaring bankruptcy, comparing it to corporate bankruptcy processes, while noting that this has never occurred for a state.
  • Some argue that a federal bailout would lead to an unfair transfer of wealth from less affluent states to California, raising concerns about fiscal responsibility.
  • There are suggestions that California might need to implement severe budget cuts, including significant reductions in pension payments.
  • Creative proposals are put forth, such as offering financial incentives to Mexico for prison management and repurposing prison properties for healthcare use.

Areas of Agreement / Disagreement

Participants express a range of views, with no clear consensus on the effectiveness of the proposed cuts or the likelihood of a federal bailout. Disagreement exists regarding the implications of state financial management and the potential outcomes of various proposed solutions.

Contextual Notes

Some participants highlight the complexity of state bankruptcy laws and the potential consequences of federal intervention, indicating that the discussion is constrained by uncertainties regarding legal frameworks and economic conditions.

  • #31
WhoWee said:
California Governor Jerry Brown, faced with a $25 billion deficit has proposed over $12.5 billion in cuts, nearly across the board.

I feel for him, I really do! As a struggling freelance writer earning less than thirty grand, I "get it." Tightening one's belt isn't comfortable, but it's sometimes necessary.

When one is self-employed, however, doing so doesn't result in hundreds of departments complaining loudly in response!
 
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  • #32
mugaliens said:
I feel for him, I really do! As a struggling freelance writer earning less than thirty grand, I "get it." Tightening one's belt isn't comfortable, but it's sometimes necessary.

When one is self-employed, however, doing so doesn't result in hundreds of departments complaining loudly in response!

Ah yes... the cheapest Ramen noodle base, bulk noodles, and bulk-powdered chicken stock for convenience food, and scrounging-creativity for the rest. I think we should send Turbo-1 to California and explain just what a joy pre-made noodles and such can be... I know his recollections have given me a new appreciation even for the times of bulk-noodle.
 
  • #33
skippy1729 said:
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
The references provided here say Brown plans ~$12B cuts and another ~$12B increase from revenues to close the total $25B deficit.
 
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  • #34
mheslep said:
The references provided here say Brown plans ~$12B cuts and $12B increase from revenues to close the total $25B deficit.

I believe you, but... where the hell is he getting $12B? Is it possible he'll raise taxes and accept that he'll be a one-term governor?
 
  • #35
nismaratwork said:
I believe you, but... where the hell is he getting $12B? Is it possible he'll raise taxes and accept that he'll be a one-term governor?
Legalize drugs, build the largest meth lab in the history of the universe, then sell meth to the other 49 states and the rest of the world.
Hate it all you want but you know it would work :P
 
  • #36
ShawnD said:
Legalize drugs, build the largest meth lab in the history of the universe, then sell meth to the other 49 states and the rest of the world.
Hate it all you want but you know it would work :P

I think it would actually drive down the price of meth so much that in essence, it would be like flooding the market with diamonds... well... diamonds that do nasty things. That's the other problem; you're going to over-saturate the market with a drug that lasts for a very long time... no... this would be a failed economic policy.

I think an earthquake would be best... you know... something really profound; a kind of natural jettisoning of increasingly dead weight.
 
  • #37
Here's a short term solution - sell the topsoil - the environmental groups don't want any agribusiness anyway. Look at the money that could be saved on lawsuits over water.
 
  • #38
WhoWee said:
Here's a short term solution - sell the topsoil - the environmental groups don't want any agribusiness anyway. Look at the money that could be saved on lawsuits over water.

Have you lived in California??... you seem to really have a grip on the issues and the pathologies.

Yeah... actually, to just get honest with themselves, they should add gambling like Nevada and legalize marijuana HARD. Sell THAT, and reinvigorate their agricultural business... at least it's not meth! They can trade weed for water... I think that's sort of where they're going anyway... :biggrin:
 
  • #39
They have the most productive farm land in the country. What do they do to increase production - turn off the water?

Next, look at the prisons and Medi-cal - here's a glimpse at what happens when the paths of the two programs cross:

http://www.lao.ca.gov/handouts/crimjust/2010/Inmate_Medical_Care_03_18_10.pdf

"The revised budget for 2009-10 refl ects a total of about $1.8 billion
in General Fund support for adult inmate medical operations
under the control of the federal court-appointed Receiver. This is
an increase of about $424 million, or 32 percent, from the
enacted 2009-10 budget, based on the following adjustments:"

my bold
 
  • #40
Now Brown wants to cut $1.7 Billion by charging co-pays of up to $100.
http://californiawatch.org/dailyreport/how-brown-shaves-17-billion-medi-cal-budget-7971

"Gov. Jerry Brown is counting on fewer Medi-Cal users seeing the doctor, visiting the emergency room or spending the night in the hospital - by charging those low-income patients a co-pay of as much as $100.

In other words, what's bad for the patient, might be good for the state budget.

The expected drop in "utilization" – budget code for people who fail to take advantage of government services because of various roadblocks - is just one of the ways that Brown expects to carve $1.7 billion from Medi-Cal, the state health insurance program for the needy."

He's planning to restrict access to medical care with a co-pay?:confused:
 
  • #41
How do thing compare north versus south in California?
 
  • #42
WhoWee said:
They have the most productive farm land in the country. What do they do to increase production - turn off the water?

Next, look at the prisons and Medi-cal - here's a glimpse at what happens when the paths of the two programs cross:

http://www.lao.ca.gov/handouts/crimjust/2010/Inmate_Medical_Care_03_18_10.pdf

"The revised budget for 2009-10 refl ects a total of about $1.8 billion
in General Fund support for adult inmate medical operations
under the control of the federal court-appointed Receiver. This is
an increase of about $424 million, or 32 percent, from the
enacted 2009-10 budget, based on the following adjustments:"

my bold

Wow... that's a HUUUUGE amount!

PhilKravitz: Historically the South has been wealthier, but water-poor, and the north (of LA and more) was typical pacific northwest.
 
  • #43
nismaratwork said:
I think it would actually drive down the price of meth so much that in essence, it would be like flooding the market with diamonds
I don't want to use diamonds as the example since that's a very complicated issue. Look at alcohol instead. According to this random website, alcohol is worth $280 billion per year in the US. Meth could very easily slip in there and take $24b. The budget problem could be fixed (pun intended) in 1 year.

But they won't listen to me. Instead, they'll probably jack the taxes on alcohol and cigarettes.The budget problem could probably be fixed with some basic common sense, but common sense is never as common as it should be. For example, prisons generally don't do anything to prevent prisoner-on-prisoner violence, but tax payers flip the bill to give medical treatment when it happens.
 
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  • #44
ShawnD said:
I don't want to use diamonds as the example since that's a very complicated issue. Look at alcohol instead. According to this random website, alcohol is worth $280 billion per year in the US. Meth could very easily slip in there and take $24b. The budget problem could be fixed (pun intended) in 1 year.

But they won't listen to me. Instead, they'll probably jack the taxes on alcohol and cigarettes.

Maybe they should just collect back taxes from all of the various convicted dealers - plus suspend all Medi-Cal benefits to prisoners (except for emergencies), and all benefits for "undocumented persons".
 
  • #45
The California thing seem over blown Brown is going to cut spending 10% and increase taxes 10%. Here in New York we have cities increase taxes by 43% Newburgh, NY and cutting services. The mayor has left office. School districts increasing their tax 14%. 10% is tame.
 
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  • #46
If you do not like the increased taxes work less (Laffer curve MIT).
 
  • #47
PhilKravitz said:
If you do not like the increased taxes work less (Laffer curve MIT).

How would you expect to pay your bills?
 
  • #48
WhoWee said:
How would you expect to pay your bills?

Of course your tax bills are lower. As far as property tax move to a smaller house in a cheaper neighborhood. As far as medical care use less bigger deductible, as far as food grow some. It is the new normal the system will not provide for us we must provide for our selves and our community.
 
  • #49
PhilKravitz said:
Of course your tax bills are lower. As far as property tax move to a smaller house in a cheaper neighborhood. As far as medical care use less bigger deductible, as far as food grow some. It is the new normal the system will not provide for us we must provide for our selves and our community.

You are basically specifying personal responsibility for tax paying citizens - in order for the state to continue to spend uncontrolled?
 
  • #50
WhoWee said:
You are basically specifying personal responsibility for tax paying citizens - in order for the state to continue to spend uncontrolled?

Good... I thought maybe I was misunderstanding him. Re-routing confiscation funds from the drug enforcement and back into the budget would allow for the dual forces of adding money to the budget, and shrinking the prison population and budget.

ShawnD: Meth is pretty nasty... I'd say stick with weed and sell it to the nation; it's already being done from California so why not tax it?
 
  • #51
WhoWee said:
Maybe they should just collect back taxes from all of the various convicted dealers - plus suspend all Medi-Cal benefits to prisoners (except for emergencies), and all benefits for "undocumented persons".

They already do the first one (police auctions). The second one is mostly true. The third one will never happen because 99% of California is Mexican.
ShawnD: Meth is pretty nasty... I'd say stick with weed and sell it to the nation; it's already being done from California so why not tax it?
Not addictive enough to be profitable. Alcohol withdrawal causes seizures, nicotine withdrawal causes irritability, caffeine withdrawal causes headaches. Marijuana withdrawal involves getting a job and taking a shower.
 
  • #52
ShawnD said:
They already do the first one (police auctions). The second one is mostly true. The third one will never happen because 99% of California is Mexican.

Police auction proceeds go to... the police, not the general budget pool AFAIK.

As for the last... come one now, if that were true I think we'd see more on TV... right? :rolleyes:
 
  • #53
ShawnD said:
The third one will never happen because 99% of California is Mexican.

Already?
 
  • #54
nismaratwork said:
Police auction proceeds go to... the police, not the general budget pool AFAIK.
The money goes to the police so the police do not require as much funding from taxes.


As for the last... come one now, if that were true I think we'd see more on TV... right? :rolleyes:
Ever watch that show Operation Repo? Crazy guy Matt is the only one there who isn't Mexican :wink:
 
  • #55
ShawnD said:
The money goes to the police so the police do not require as much funding from taxes.

Really? That strikes me as a bit of an oversight issue, and there have been issues.



ShawnD said:
Ever watch that show Operation Repo? Crazy guy Matt is the only one there who isn't Mexican :wink:

That's a scripted show, based on who knows what, acted by "former professionals"... you know that... RIGHT? Oh god, if you don't, let me know so I can clear my schedule for paroxysmal laughter.

Anyway, wink wink, if you were right it wouldn't matter. I shouldn't believe that 99% of priests are sticking it to little boys... right? That would be Twainish of my statistics, but funny... maybe true? I saw this episode of South Park that was very convincing...
 
  • #56
nismaratwork said:
That's a scripted show
Where every single character is Mexican.
 
  • #57
ShawnD said:
Where every single character is Mexican.

OOOOOoooohhh... So, we see them on TV... got it... :rolleyes:

Yeah, I should have added a caveat or two; I haven't heard a joke that clever since Chris Rock made the same joke using black people and COPS.edit: So... did you know? Really, my schedule... please? :smile:
 
  • #58
ShawnD said:
Ever watch that show Operation Repo? Crazy guy Matt is the only one there who isn't Mexican :wink:

Shawn, you know full well your statement is false. Ca isn't 99% Mexican. Wiki shows it at 25% Mexican. Beyond that, some of the people who strongly oppose benefits for illegal Mexican immigrans, are legal Mexican immigrants. Many legal immigrants resent the fact that they followed the law, and the illegals just jump the fence.

The largest named ancestries in California are Mexican (25%), German (9%), Irish (7.7%), English (7.4%) and Filipino (6%); there are 65 other ethnicities including Albanians, Haitians, Pakistanis, and Somalis. Both Los Angeles and San Francisco have large numbers of residents with French, Italian, Portuguese, Russian and Scandinavian ancestry.
http://en.wikipedia.org/wiki/Demographics_of_California
 
  • #59
mheslep said:
The references provided here say Brown plans ~$12B cuts and another ~$12B increase from revenues to close the total $25B deficit.

The unemployment rate in CA is also a problem - 12.4% in November 2010 - as compared to 9.3% nationally. Among the "big" states, only Florida is comparable.

http://www.google.com/publicdata?ds...ST370000:ST420000:ST510000:ST340000&tdim=true


It might be difficult to raise taxes enough to yield $12B?
 
  • #60
WhoWee said:
The unemployment rate in CA is also a problem - 12.4% in November 2010 - as compared to 9.3% nationally. Among the "big" states, only Florida is comparable.

http://www.google.com/publicdata?ds...ST370000:ST420000:ST510000:ST340000&tdim=true


It might be difficult to raise taxes enough to yield $12B?

I'm not saying that people want to be unemployed as a rule, but if ever there was a state to coast on public welfare, however well meaning... CA is it. There's nothing wrong with a social experiment; there's a LOT wrong with not knowing when to pull the plug.
 

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