December 11, 2011
It is now time to pay the piper as they say. California and Illinois have the worst credit ratings than any other state in the Union.
Both of these states have been dominated by Liberal/Socialist/Democrats for years that are pro union and anti-business.
Gov. Jerry Brown (D. CA) has announced draconian cuts to welfare related entitlement programs through out the state (I. E. Greece and Ireland).
This will affect the poorest of the poorest in the state that the Liberal/Socialist/Democrats proudly tout in campaign speeches to represent and protect so that these economically challenged people will vote them back into office year after year.
Even though Jerry Brown is proposing these draconian cuts he is not planning on cutting the HUGE Government/SEIU entitlement/retirement costs that at least California suffers from.
Here is a hardcore fact. There are thousands and thousands of “Baby Boomers” that work for the State of California as well as other states. Starting this year (2011) Baby Boomers turn 65 and are starting to retire. When they retire they are going to collect sometimes up to 80% of their salary for the rest of their lives along with health coverage that is 100% funded by tax payer dollars.
This is unsustainable going into the future. Simple math. A growing number of “Baby Boomers” retiring and a dwindling number of people paying taxes compared to people collection pension money and healthcare from the state. Keep in mind this same scenario that exists at the federal level.
This employee pension time bomb. is going to force two things.
1. California declares bankruptcy that will make all government and Government Union contracts Null and Void.
2. The Fed starts to print money (Inflation that will not lead to new jobs subsequently not generating a new tax base.) to prop up California’s economy.
This will put California’s financial burden on the US tax payer. That means that someone in Vermont,
Massachusetts etc. are paying to bail out California and maybe Illinois.
The poor get massive cuts and the government employees and government unions are allowed to be paid the crippling entitlement programs that are the biggest costs in running California Government.
Here is Jerry Brown’s Plan, Ready for this?: Jerry Brown wants to spend millions of dollars for a special vote in June to ask taxpayers for millions of dollars in tax increases.
Does that make sense to you?
Jerry Brown has been Governor before for two terms. The majority people that re-elected him were not even born then or did not even live in this country during his last term of Governor.
So they have no idea of the damage that he did the last time.
Here in California we have a very unusual proposition that was passed on June 6, 1978. Proposition 13 helps home owners to able to afford and keep their homes.
Jerry Brown states that he has no intention of dismantling Prop 13, however he wants to attack the subsequent affects of Prop 13 to allow local counties and cities to collect additional taxes to shift the tax burden from the state to county and local municipalities. What exactly does that mean?
People are losing their homes and could be subject to additional property taxes that will further exacerbate the rate of home foreclosures in the state of California.
So instead of being an ambassador to business and courting businesses to start and expand businesses with tax incentives in California creating jobs to increase the tax base,
Jerry Brown has decided to punish poor people with entitlement cuts and even worse punish the responsible working class with tax hikes to pay the unions and fund the state pension train wreck.
The bond rating for California has dropped significantly, Reason? You need taxpayer dollars to payback municipal bonds. When a municipal bond is issued it has to be backed by tax payer dollars to repay the bond when it is due. If the state is broke it can either raise taxes, issue municipal bonds or cut government spending. Those are the choices. There are only bandaids in the interim to temporarily patch the fiscal budgets of the state of California.
Stay tuned to what happens in California. As they say “As California goes, so goes the rest of the country.”