By Meredith Turney
Within a matter of weeks the great state of California will be out of money. For months state leaders have warned of the yawning $24 billion budget deficit; even exploiting the deficit they created in a failed attempt to scare voters into increasing their taxes in the May special election. The proposed tax increases and budget gimmickry were soundly rejected by voters sending a clear message to Sacramento that Californians will no longer finance the bloated inefficient governments insatiable appetite for more tax dollars. Now the day of reckoning is upon California and how the Golden State resolves this massive problem will impact the entire nation.
June 15 is the constitutional deadline for the legislature to pass a budget for the new fiscal year which begins July 1. Lawmakers have historically ignored this deadlinehabitually disregarding the Constitutions authoritybut Governor
Arnold Schwarzenegger has publicly warned that after June 15 every day of inaction jeopardizes our states solvency" and its ability to pay its bills.
The legislatures Budget Conference Committee has been working to cut some spending to try and cover the $24 billion budget shortfall but Democrats still havent given up on raising taxes and fees despite voters resounding rejection of such a short-sighted fix. The eyes of the nation will be on Sacramento in the coming weeks as politicians quibble over how to pay for their irresponsible spending a microcosm of the situation in Washington D.C.but without the option to create more money via a printing press.
Economic experts are predicting America will lose its AAA credit rating due to the massive debt its government continues to incur; adding Californias debt will certainly tip the scales against Americas struggle to hang on to any vestige of credibility in the international marketplace.
The fate of the worlds 10th largest economy is inextricably linked to Americas overall economic fate. Could Americas already fragile economy absorb Californias debt? With the federal government already trillions in debt whats another $24 billion? The problem is not the amount of debt but the precedent it will set if the federal government is forced to bailout one of the countrys largest states.
If Washington D.C. comes to the rescue for California other state capitals across the nation also struggling with the economic downturn will be looking for their own bailouts. States that have taken the measures necessary to grow their intrastate economies will be forced to cover the mismanagement of their neighbors. In order to maintain the vital interstate economy the ant will be forced to bailout the grasshopper. Ironically the most responsible states will be left holding the bag for their irresponsible neighbors.
To borrow the infamous catch phrase from our neighbors in a certain Nevada city What happens in California doesnt stay in California." In fact whats happening in California is driving its citizens to leave the state in droves. Responsible leaders in Sacramento have long recognized the problems created by the mass exodus across California borders. Just last week the Sacramento Bee reported a reverse Dust Bowl" with twice as many people leaving California for Texas and Oklahoma as coming to the West Coast. Only this time its not an act of God driving people from one geographical area to another; its an act of government.
Read more HERE
*This article is from www.TownHall.com
Within a matter of weeks the great state of California will be out of money. For months state leaders have warned of the yawning $24 billion budget deficit; even exploiting the deficit they created in a failed attempt to scare voters into increasing their taxes in the May special election. The proposed tax increases and budget gimmickry were soundly rejected by voters sending a clear message to Sacramento that Californians will no longer finance the bloated inefficient governments insatiable appetite for more tax dollars. Now the day of reckoning is upon California and how the Golden State resolves this massive problem will impact the entire nation.
June 15 is the constitutional deadline for the legislature to pass a budget for the new fiscal year which begins July 1. Lawmakers have historically ignored this deadlinehabitually disregarding the Constitutions authoritybut Governor Arnold Schwarzenegger has publicly warned that after June 15 every day of inaction jeopardizes our states solvency" and its ability to pay its bills.
The legislatures Budget Conference Committee has been working to cut some spending to try and cover the $24 billion budget shortfall but Democrats still havent given up on raising taxes and fees despite voters resounding rejection of such a short-sighted fix. The eyes of the nation will be on Sacramento in the coming weeks as politicians quibble over how to pay for their irresponsible spending a microcosm of the situation in Washington D.C.but without the option to create more money via a printing press.
Economic experts are predicting America will lose its AAA credit rating due to the massive debt its government continues to incur; adding Californias debt will certainly tip the scales against Americas struggle to hang on to any vestige of credibility in the international marketplace.
The fate of the worlds 10th largest economy is inextricably linked to Americas overall economic fate. Could Americas already fragile economy absorb Californias debt? With the federal government already trillions in debt whats another $24 billion? The problem is not the amount of debt but the precedent it will set if the federal government is forced to bailout one of the countrys largest states.
If Washington D.C. comes to the rescue for California other state capitals across the nation also struggling with the economic downturn will be looking for their own bailouts. States that have taken the measures necessary to grow their intrastate economies will be forced to cover the mismanagement of their neighbors. In order to maintain the vital interstate economy the ant will be forced to bailout the grasshopper. Ironically the most responsible states will be left holding the bag for their irresponsible neighbors.
To borrow the infamous catch phrase from our neighbors in a certain Nevada city What happens in California doesnt stay in California." In fact whats happening in California is driving its citizens to leave the state in droves. Responsible leaders in Sacramento have long recognized the problems created by the mass exodus across California borders. Just last week the Sacramento Bee reported a reverse Dust Bowl" with twice as many people leaving California for Texas and Oklahoma as coming to the West Coast. Only this time its not an act of God driving people from one geographical area to another; its an act of government.
Read more HERE
*This article is from www.TownHall.com
