by Jack Lee
California has the worst credit rating in the US and this is underscored by our own law makers who warn that this Golden State will be flat broke by April. We are looking at a $20 billion shortfall coupled to what Standard and Poors rating service said was, “impending recurrence of a cash deficiency.” Jamie Diamond Chairman of JP Morgan warned that we should be more concerned about California’s looming default than that of Greece, which has recently announced it is bankrupt, because California will have a bigger impact on the world.
It’s all about demographics and reckless spending: In Greece the birth rate is 1.3 and that is so low they are running out of grandchildren to support their generous socialist entitlements and this has contributed to their overall economic decline. 1.3 is a birth rate that is so low that no society has ever recovered from. America Alone, written by Mark Steyn predicted this epidemic problem and warns that irresponsible and corrupt governments that are overly rewarding themselves with higher salaries and entitlements designed to buy votes are running headlong into the reality of birth demographics that say this spending can’t be sustained.
As in Greece and a half dozen or more European nations already on shakey economic ground, they’re running out of wealth producers (tax payers). Our birth demographics are dismal. They show the only segment of the population that is expanding are mostly those in poverty and this includes the many millions of illegals who consume more of our finite tax resources than they contribute.
Our wealth producing segment is shrinking in the USA and in California we are in serious danger of collapse. Many of us could argue we have already collapsed when we are $20 billion short by April! The current rate of government spending compared to income is not sustainable by any measure. It is inevitable that we will have to either seriously raise taxes and drastically cut programs or both and just about everybody knows it, but too few are willing to do it.
Taxpayers have been burned so many times before, they fear giving more to government because government will always take that money and then spend more. They get a buck – they spend a buck fifty! It’s always been that way and finally taxpayers are refusing to play that game. However, it is just as well known that raising taxes will impede our recovery from the great recession and any more bailout money will only add to our monsterous debt and keep us down for many generations to come.
Note: California has the worst schools, highest taxes, worst credit, most business unfriendly regulations, worst crime, but we score first in the highest paid legislature in the nation! Because we reward failure – we are California voters and thats the way we like to do business!