Could a federal government bailout of the state of California be charging at us full speed? Put another way: are you and I about to pay for the financial mismanagement of that state’s legislature and governor?
There’s no firm answer at this point, but the warning signs are there. Voters in that state just rejected (overwhelmingly, I might add) a series of ballot initiatives that would have among other things significantly raised a variety of tax rates in order to compensate for the financial shortfall. The state’s ability to raise short-term funds as they do each year to make up for budget gaps looks to be in big trouble, as there is a significant level of discomfort over the security of their bonds. A budget proposal offered by Governor Schwarzenegger offers the possibility of significant cuts in education funding (with the accompanying layoff of thousands of teachers), reductions in health care funding, and turning the jurisdiction of state prisoners over to federal authorities.
And I’m sure the list of “we may have to” options doesn’t end there. So what happens now?
In his column today in the Washington Post, columnist George Will offers a possible scenario of what would happen if control of California’s finances is turned over to the Obama Administration:
These factions [unionized public employees and other parties responsible for these problems] will flourish if the state becomes a federal poodle on a short leash held by the president. He might make aid conditional on the state doing things that California Democrats and their union allies would love to be “compelled” to do: eliminate the requirements of two-thirds majorities of both houses of the legislature to raise taxes and pass budgets, and repeal Proposition 13, which voters passed in 1978 to limit property taxes. These changes would enable the legislature (job approval rating: 14 percent) to siphon away an ever-larger share of taxpayers’ wealth and transfer it to public employees.
Let’s review: massive, multi-billion dollar gifts to Chrysler and General Motors to help right those sinking ships, and yet they continue to sink. “Gifts” seems to me to be a very appropriate word, since part of any bankruptcy filing would be forgiveness of those debts. As one person said this week, why would you expect repayment from a company that you own?
Massive, multi-billion dollar injections into our banking institutions, and no sign that things are getting better. In fact, all we hear is Secretary Geithner saying that there are promising signs.
We’ll never see one dollar of any of these amounts returned. Are you willing to foot the bill for another potential takeover – not of a corporation, but of a state? And with a history of recall elections in California, where is the outrage of voters over the performance of those they sent to office and a threat to recall them and try again?
There’s no firm answer at this point, but the warning signs are there. Voters in that state just rejected (overwhelmingly, I might add) a series of ballot initiatives that would have among other things significantly raised a variety of tax rates in order to compensate for the financial shortfall. The state’s ability to raise short-term funds as they do each year to make up for budget gaps looks to be in big trouble, as there is a significant level of discomfort over the security of their bonds. A budget proposal offered by Governor Schwarzenegger offers the possibility of significant cuts in education funding (with the accompanying layoff of thousands of teachers), reductions in health care funding, and turning the jurisdiction of state prisoners over to federal authorities.
And I’m sure the list of “we may have to” options doesn’t end there. So what happens now?
In his column today in the Washington Post, columnist George Will offers a possible scenario of what would happen if control of California’s finances is turned over to the Obama Administration:
These factions [unionized public employees and other parties responsible for these problems] will flourish if the state becomes a federal poodle on a short leash held by the president. He might make aid conditional on the state doing things that California Democrats and their union allies would love to be “compelled” to do: eliminate the requirements of two-thirds majorities of both houses of the legislature to raise taxes and pass budgets, and repeal Proposition 13, which voters passed in 1978 to limit property taxes. These changes would enable the legislature (job approval rating: 14 percent) to siphon away an ever-larger share of taxpayers’ wealth and transfer it to public employees.
Let’s review: massive, multi-billion dollar gifts to Chrysler and General Motors to help right those sinking ships, and yet they continue to sink. “Gifts” seems to me to be a very appropriate word, since part of any bankruptcy filing would be forgiveness of those debts. As one person said this week, why would you expect repayment from a company that you own?
Massive, multi-billion dollar injections into our banking institutions, and no sign that things are getting better. In fact, all we hear is Secretary Geithner saying that there are promising signs.
We’ll never see one dollar of any of these amounts returned. Are you willing to foot the bill for another potential takeover – not of a corporation, but of a state? And with a history of recall elections in California, where is the outrage of voters over the performance of those they sent to office and a threat to recall them and try again?
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