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California’s Nightmare Will Kill Obamanomics!
Topic Started: Jul 6 2009, 07:49 AM (296 Views)
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California’s Nightmare Will Kill Obamanomics:


July 6 (Bloomberg) -- Last week, we discovered that the state of California will gladly pay you Tuesday for a hamburger today.

With California mired in a budget crisis, largely the result of a political impasse that makes spending cuts and tax increases impossible, Controller John Chiang said the state planned to issue $3.3 billion in IOU’s in July alone. Instead of cash, those who do business with California will get slips of paper.

The California morass has Democrats in Washington trembling. The reason is simple. If Obama’s health-care plan passes, then we may well end up paying for it with federal slips of paper worth less than California’s. Obama has bet everything on passing health care this year. The publicity surrounding the California debt fiasco almost assures his resounding defeat.

It takes years and years to make a mess as terrible as the California debacle, but the recipe is simple. All that you need is two political parties that are always willing to offer easy government solutions for every need of the voters, but never willing to make the tough decisions necessary to finance the government largess that results. Voters will occasionally change their allegiance from one party to the other, but the bacchanal will continue regardless of the names on the office doors.

California has engaged in an orgy of spending, but, compared with our federal government, its legislators should feel chaste. The California deficit this year is now north of $26 billion. The U.S. federal deficit will be, according to the latest numbers, almost 70 times larger.

Bleak Picture

The federal picture is so bleak because the Obama administration is the most fiscally irresponsible in the history of the U.S. I would imagine that he would be the intergalactic champion as well, if we could gather the data on deficits on other worlds. Obama has taken George W. Bush’s inattention to deficits and elevated it to an art form.

The Obama administration has no shame, and is willing to abandon reason altogether to achieve its short-term political goals. Ronald Reagan ran up big deficits in part because he believed that his tax cuts would produce economic growth, and ultimately pay for themselves. He may well have been excessively optimistic about the merits of tax cuts, but at least he had a story.

Obama has no story. Nobody believes that his unprecedented expansion of the welfare state will lead to enough economic growth. Nobody believes that it will pay for itself. Everyone understands that higher spending today begets higher spending tomorrow. That means that his economic strategy simply doesn’t add up.

Character Deficit

Back in the 1980s, Reagan’s own economist, Martin Feldstein, spoke up when he felt that the Reagan administration was pushing the deficit too far. Where are the economists with such character today? Apparently, the job description for economists has transformed from recommending policies that are defensible to defending whatever policies that the political hacks in the West Wing dream up.

As bad as the California legislature has been over the years, it has never entered a fiscal crisis like the one that we face today and then doubled down with a massive spending increase. In the end, when times got tough, patriotic and sensible Californians of both parties stood up and began acting like adults.

Maybe the same thing is starting to happen in our nation’s capital. The key players in Washington are Senator Evan Bayh and 15 Senate Democrats who joined him this year in forming a coalition of moderates. One thing that has distinguished moderate Democrats from the garden variety of the species is heightened concern about fiscal responsibility.

Off a Cliff

With the price tag of Obama-care likely to exceed $1 trillion, moderate Democrats face a simple choice. They can jump off the cliff with the president, or they can stay true to the principles that they have espoused throughout their careers.

There are reassuring signs that principle is winning. One of the most expensive components of the Obama plan is the so- called public-insurance option, which opponents fear would result in massive government subsidies. Senator Mary Landrieu said that she is “not open” to a public option that will compete with private insurance.

Many other Democratic Senators, including Ben Nelson, Blanche Lincoln, and Tom Carper, also oppose the public option. As the cost estimates increase and support wanes, the Senate Finance Committee is even going as far as to pursue its own health-care plan, meaning that the health-care end game is now in sight.

Tax Bite

Moderates might support Obama’s health-care objectives if the bill also included tax increases to cover the spending increases. But those tax increases would likely be unpopular, making it almost impossible to pass a bill.

Given the increasing public concern about deficits that heightened significantly last week because of the California crisis, there are only two possibilities left. Either the Obama plan will come crashing down or Senate Democrats will concoct some bill that has health in the title but costs almost nothing and does even less. With Al Franken arriving in the Senate and providing Democrats with a crucial 60th vote, the latter seems most likely.

(Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. He was an adviser to Republican Senator John McCain of Arizona in the 2008 presidential election. The opinions expressed are his own.)

To contact the writer of this column: Kevin Hassett at khassett@bloomberg.net

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTKrn1jUJwdE

credit: Drudge

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Baldo
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Yep, California is in far worse shape that is being let on. The 26 billion deficit is really much larger and economic conditions are not improving. We are the failed state that Obama's plan will bring us to as a Federal Govt. What Obama is doing is just a warning of what California did ten years ago.

Of particular concern is the cities and counties who are reeling under mandates passed by the State and imposed on the counties and cities. They are always unfunded, or under funded.

The unfunded medical liabilities for just retired state employees is 48 billion and it is estimated by some that the cities and counties have also an equal amount. Thus bringing up unfunded medical liabilities close to 100 billion for just retired employees. This is NEVER computed in the budget, it is just a yearly scramble to fund the current year. It keeps growing. It is also why the Democrats are so desperate to pass Health-care onto the Feds. I don't know what the other state's conditions are but I imagine there are those that add to the same problem.

Notice how no one talks about the real costs of assuming the existing medical liabilities of state and local governments? It HUGE! Don't you think the CBO should compute the cost of Federal, State, and local employees & retirees heath-care before a national health-care is passed?

I view the current administration and part of the last administration as the last days of Roman Empire when the Senate became more concerned about their political and economic survival than that of Rome. Money, borrowed at that, is being passed out to their special interests at an alarming rate.

I don't care which party is elected, the hell with politics. I just want truth and honesty in leadership and we don't have that.

I have been looking to China and what is happening there should scare the crap out of our leaders. Their economy is expanding, even while our is declining. I am not saying they don't have problems and serious personal civil rights abuses, but they are in a no debt situation and we are being crushed by it.

There government has embraced capitalism and business opportunity. The Communist Party is more Capitalistic than our Democratic Party, go figure.

In just one industry, commercial aircraft design, they are leap frogging decades. In ten years they will be serious competitors to Boeing & Airbus. They are concentrating on the short to mid range commercial routes.








Edited by Baldo, Jul 6 2009, 12:12 PM.
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brittany

Why am I paying to repair CA's potholes?
Edited by brittany, Jul 6 2009, 12:14 PM.
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Baldo
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brittany
Jul 6 2009, 12:13 PM
Why am I paying to repair CA's potholes?
I would rather have tickets to a Yankees Game. But thanks for the no bump!





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LTC8K6
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Assistant to The Devil Himself
Quote:
 
Why am I paying to repair CA's potholes?


Because you worked hard and kept your roads in decent shape.

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foxglove

Remember Pete Wilson, the governor of California who left the state office with a budget surplus? One of the things he was famous for was endorsing prop 187 which was a 1994 effort to prohibit illegal immigrants from using state funded social services. This ballot initiative was passed by the voters but the federal courts found it unconstitutional. Wilson, as I recall, thought that it was the federal government's role to police the border and therefore any social service expenses should be paid by the federal government and not the state of California.

What government seems to do is not make any tough decisions, and then to pass around how something should be funded like a hot potato.

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Baldo
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Hay Don't Worry! A couple of our legislators are hard at work on a solution to our horrible financial situation.

Lawmakers want apology for anti-Chinese measures
July 6
It's not a pretty history.

But, two California legislators say, it's time to admit it and apologize for how Chinese immigrants were treated during and after the Gold Rush.

Assemblymen Paul Fong and Kevin de Leon are sponsoring a resolution that recognizes Chinese laborers for mining ore, building levees to create farmland and constructing -- at great peril and for less pay than whites -- 80 percent of the western half of the transcontinental railroad....snipped
http://www.sacbee.com/politics/story/2002313.html


The mantra of race, class, and gender still dominates
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longstop
longstop
Michelle Obama's UC Merced visit cost school $1M

http://news.yahoo.com/s/ap/20090706/ap_on_re_us/us_michelle_obama_uc_merced_1
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brittany

Baldo
Jul 6 2009, 09:33 PM
Hay Don't Worry! A couple of our legislators are hard at work on a solution to our horrible financial situation.

Lawmakers want apology for anti-Chinese measures
July 6
It's not a pretty history.

But, two California legislators say, it's time to admit it and apologize for how Chinese immigrants were treated during and after the Gold Rush.

Assemblymen Paul Fong and Kevin de Leon are sponsoring a resolution that recognizes Chinese laborers for mining ore, building levees to create farmland and constructing -- at great peril and for less pay than whites -- 80 percent of the western half of the transcontinental railroad....snipped
http://www.sacbee.com/politics/story/2002313.html


The mantra of race, class, and gender still dominates
Hop Sing was treated well in Bonanza.
Edited by brittany, Jul 6 2009, 10:31 PM.
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brittany

longstop
Jul 6 2009, 10:26 PM
Worth every penney esp.when she bad mouthed University of Chicago.
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longstop
longstop
brittany
Jul 6 2009, 10:33 PM
longstop
Jul 6 2009, 10:26 PM
Worth every penney esp.when she bad mouthed University of Chicago.
http://www.cnsnews.com/public/content/article.aspx?RsrcID=50528
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retiredLEO
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Baldo
Jul 6 2009, 01:28 PM
brittany
Jul 6 2009, 12:13 PM
Why am I paying to repair CA's potholes?
I would rather have tickets to a Yankees Game. But thanks for the no bump!





Com'on Baldo, you really can't be a Yankee fan, maybe you want ticket to MJ's funeral.
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brittany

They bad mouthed Bush. He just vacationed at his own ranch.
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