The President of Chrysler-Government Motors may soon create a public sector subsidiary to acquire failed states, starting with California. Voters on Tuesday rejected a package of tax increases, mushy spending caps and borrowing from future lottery revenues to balance the budget. The only measure approved would ban raises for legislators and statewide office-holders when the state runs a deficit.
As with Rick Wagoner, the former president of General Motors, who was ousted when his company was taken over by the President of United States, Inc., California Gov. Arnold Schwarzenegger may be toast. He’s asking the same source for a $7 billion guarantee for loans that would be issued by the defunct State of California, which has seen its general obligation debt grow from $37 billion to more than $70 billion under Schwarzenegger.
Californians won’t cut spending and won’t vote taxes. It is la-la land, with a worsening budget deficit and no will to do anything about it. California is the minimum-wage homeowner who bought a mansion with a no-documented-income loan in the go-go years and now expects those who lived within their means and managed their lives responsibility to bail them out.
First the financial sector, then the autos and soon to come, the State of California. Bet on it.