California Again Facing Fiscal Calamity

Same old story, but again California is facing fiscal calamity! How can the eight largest economy in the world be is such dire straits? The California crisis was caused by an irresponsible state government, with both Democrats and Republicans complicit for the mess that California faces.

During the Dot Com boom and real estate bubble that brought in a flood of revenue to state coffers with Democrats committing the state to unsustainable spending. Republicans were just as egregious by pushing reckless tax cuts that the state could not sustain, coupled with the massive bonds voted by taxpayers the state was unable to keep up current spending when revenues began to fall.

The combination of disastrous financial irresponsibility by both political parties and by taxpayer approved bond measures has the state near financial collapse.

The problem is that state has a chronic budget shortfall with each political party refusing to bend on taxes or spending reduction to solve the current budget nightmare the state finds itself. A combination of both will have to be looked at if the state is to recover.

Currently the state has a chaotic method of financing its budget by relying on a small percentage of wealthy Californians to pay for its fiscal spending. When this small percentage does well the state profits, but when they don’t the state suffers deeply. That is why the state fluctuates between boom or bust budgeting cycle of governing.

The state needs an equitable overhaul of how the state brings in revenue that will aline the state into more reasonable and steady financial revenue stream that removes the state from the boom and bust cycle.

The other and more perverse area that has to be addressed is that the state has to have a better accounting of how it spends its money. Too often state spending has been high jacked by labor, environmental and anti-business groups that place their interests above what is best for the state.

California public spending is rife with corruption, gross misappropriation of spending that borders on criminal that is akin to how Enron operated.

This situation by Sacramento has made California one of the worst states to operate a business and to retire in. The adage is you make your money in California but retire to other states!

The state needs major changes and with the current gubernatorial election less than a year away neither candidate has articulated a coherent plan for overcoming the crisis that California faces.

The state is heading for bankruptcy and the people of the state will suffer as a result and with it will be a drag on the national economy! Washington better look how California is governed, because you are heading the same direction!