Will U.S., Inc., acquire California?

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.

87 comments Add your comment

million

May 20th, 2009
1:44 pm

KUDOS to the ordinary taxpayers of California who refused to tax themselves to death for the benefit of unions and other undeserving groups. Now if they could just cut their own legislature’s pay, legalize pot, release all minor drug offenders, and privative their prison system, then they may have a shot at balancing their budget!

Dusty

May 20th, 2009
1:48 pm

Oh my goodness,
I’m not worried one bit about California.

When the Democrats have finished installing 100% socialism I will pick a nice government home with a tall palm tree under which I will eat my government furnished groceries before riding my bicycle through the government cleaned air.

Should I get sick, I will go to the government healthcare center where a nurse’s aide will give me treatment and a presscription from the government FREE drug store. If my children get sick at the government school, they can bring their manifesto textbook home with them.

Should I take my annual four month vacation after working hard one day a week at the government center, I will ride the government owned train to….you got it…CALIFORNIA.

So there is no need to worry. Democrats will take care of YOU and California.

Peter

May 20th, 2009
1:57 pm

Dusty you shouldn’t worry……a Democrat is in the White House…and he won’t be starting any more “Made UP WARS”, that will further bankrupt the US, while cutting taxes at the same time creating a bigger budget deficit.

The state of California is run by a Republican, that is the issue.

Bonaphone

May 20th, 2009
2:07 pm

Copyleft! You dumbass!

Dusty

May 20th, 2009
2:13 pm

Dear Peter,

Maybe you better not pick a governent home in California even though they elect Democratic representatives like Madame Pelosi, mother of tireless turpitude.

Maybe we can get a swap-out. Arno to Washington and Pelosi to Sacramento. Sounds good to me.

Peter

May 20th, 2009
2:17 pm

Hey Degree…….. Interesting comments……….

“The 3 states that have the highest budget deficits are California, Nevada and Arizona. They are also at the top of the housing bubble boom/bust list. Sales and property tax revenues have declined sharply thanks again to the folks that brought us the worst business climate since the 1940s.”

Guess what folks….all three states have Republican Governors…….Proof again…..Republican’s are NOT Fiscally Conservative, as in Jim’s Funny Tag line.

The worst Business Climate was Brought to ALL…….BY REPUBLICAN’S !

Peter

May 20th, 2009
2:20 pm

Hey Dusty………….. Bush was the ONLY President in US History to start a war and cut taxes…..

RetLTC

May 20th, 2009
2:26 pm

Yes JLK the “war on drugs” (LMAO) has been a total and absolute waste. Of course we all know that there is a great deal of money being made by millions of private companies and government agencies “fighting” this war on drugs that we all know is a total farce. Some police forces would become smoking black holes were it not for the revenues generated by forfeitures and drug seizures. The very reason there will always be resistance to the common sense step of legalization is that too many people have a vested interest in seeing this “war” go on forever. But don’t forget the next great boondogle. The “war on terror”. It will become the same never ending cash cow right alongside the farcicle “war on drugs”.

jewcowboy

May 20th, 2009
2:29 pm

Why is it Conservatives praise Californians for their brilliance in voting for Prop 8, then turn around and call them daft for their economic decisions?

party pooper

May 20th, 2009
2:35 pm

peter…….how old are you?

Chris Broe

May 20th, 2009
2:46 pm

The Healthcare System is in crisis in Georgia. Federal Funds for Georgia’s Healthcare system wouldn’t help. The problem is underwriting. The insurance lobby passed legislation allowing them to form these umbrella networks of invulnerable subsets of doctors who work in the long gauntlet of therapy choices confronting any cancer patient. They sell these different approaches to chemotherapy like car salesmen. The actual diagnosis and treatment is more of a sales campaign than any scientific criteria match. Defining cancer, it turns out, is an art. If bananas got cancer, then monkeys could diagnose and prescribe. Instead, the CEO’s of Insurance Companies prescribe and diagnose according to some flexible reasonable man ideal and a cost benefit analysis that always ends up with you dead and the doctors blameless in a bunch.

So, the insurance companies set up these impregnable umbrella coverages for doctors in a grouped milieu. Any lawsuit would have to penetrate the mist hiding those gorillas, believe you me.

Consolidation means that they can squash any legal threat fast and with overwhelming resources. If they get found. You have to find the right hole to put the key in first, and that’s nearly impossible.

No, Georgia, when it comes to healthcare, you’re on your own. I love it when Wooten does his best Schwarzenegger, like today. (”arnold may be toast”).

Sam

May 20th, 2009
2:47 pm

jewcowboy I think Prop8 probably got them all warm and fuzzy because it fits their bigoted ideology.

ret

May 20th, 2009
2:53 pm

Republicans have become great entertainment as of late. I actually saw a bumper sticker yesterday touting PALIN 2012. And they wonder why they are sinking like stones.

Get Real

May 20th, 2009
2:54 pm

“Go Shopping!”

-W

Dave

May 20th, 2009
3:07 pm

The voters of California already voted to try to rein in costs… it was called Prop 184 (or 187 or whatever it was) that denied state benefits to illegal aliens (which as of 2004 cost the state $10+ billion/year). But that of course was overturned by an unelected federal judge who said the will of the people didn’t count.

Anyone ever heard of Federalism? Probably not studied much today in the government schools. There’s no Constitutional clause that gives the federal government the ability to bail out a state (or anything like that). Look it up.

Peter

May 20th, 2009
3:09 pm

Hey Party Pooper…….How old are you ?

Go shopping…… funny stuff…….that was George Bush’s answer to the economy……

Spend until you are Broke…. another “Republican Family Value”.

Jackie

May 20th, 2009
3:17 pm

@ RetLTC

I agree with you 100%. Whom are we fighting and what are we protecting?
The Repubs have an extraordinary ability to conflate, extrapolate and obfuscate. They put together these focus groups, come up with talking points and buy into the agenda without realizing they are cutting their own throats.

Ask any Repub what the “war on terror” actually means? Watch the blank looks and repetition of explanation(s).

Billy Bob

May 20th, 2009
3:26 pm

Opium (and it’s offspring, heroin) was legal in the U.S. prior to 1875 or so when local ordinances began outlawing opium dens. Cocaine was legal until outlawed/regulated by the federal Harrison Narcotics Tax Act (1914) where it was used in such venerable products as Coca-Cola.

Not sure why certain drugs are now deemed illegal but the country certainly had an opportunity to protest or institute more drug-favorable legislation earlier in the twentieth century. But they didn’t.

It’s probably the same reason certain other drugs require a prescription and a license to dispense while certain shoulder-fired anti-tank weapons are also verboten in spite of the Second Amendment.

Glenn

May 20th, 2009
3:31 pm

“Facts exist outside the realm of how we feel or what we think about them.”

Thank you.

Thank you.

deegee

May 20th, 2009
3:58 pm

Cut and Paste below from a California Budget Project presentation. Seniors and children are consuming more in benefits than any other demographic group. Those of you that think that emergency rooms are getting clogged with illegal aliens need to think again. Statistics gathered by the CDC show that old people are far more likely to visit an emergency room than young hispanics.

Increased Spending Largely Reflects Demographic and
“Economic Trends – Population growth and inflation push the cost of basic services
higher:

– California’s population grew by 408,695 between January
2008 and January 2009. Since 2000, the state’s population
has increased by 4.4 million, an increase of 13.0 percent.

– Seniors are the fastest-growing segment of the population,
increasing demands on health- and age-dependent
programs.

– Inflation pushes the cost of goods and services purchased
by the state higher. The Consumer Price Index – the most
common measure of inflation – rose by 25.0 percent
between 2000 and 2008.”

Glenn

May 20th, 2009
4:08 pm

deegee,

That you would count from the California Budget Project marks you as green in the extreme.

Glenn

May 20th, 2009
4:10 pm

Hard numbers. Hard numbers. Hard numbers.

Ga Values

May 20th, 2009
4:10 pm

Billy Bob 3:26 pm

Do you think our 2 Socialist Senators are Conservatives? Both voted for TARP, both refuse to sign the no earmark pledge and Saxby works for his son’s clients not Georgia. Are they CONSERVATIVES? If so why?

Glenn

May 20th, 2009
4:20 pm

The thing is, deegee, that in spite of your good intentions (our theirs), the so-called “California Budget Project”–a decidedly leftist and insignificant outlet, by the way–is left to describe the impoverishment it failed to foretell. So screw it.

Leary

May 20th, 2009
4:21 pm

Wow!! Jim, you really have a large liberal following. I’m impressed…

deegee

May 20th, 2009
4:38 pm

ADL

May 20th, 2009
4:46 pm

Hey Munch…munch this!!

Munch

May 20th, 2009
4:51 pm

Glenn,

Do you consider the 2/3 supermajority required to pass budgets and tax increases in California legislature to be a good idea?

WhoaNellie

May 20th, 2009
5:20 pm

Just get all of the illegal aliens to start reporting their income & pay taxes. We will all be in the black.

Glenn

May 20th, 2009
5:37 pm

@Munch,

I’m in favor of the super-majority for increases, but over the years I’ve doubted its efficacy in budgeting. It tends to slow, rather than to improve, the budget process.

@ deegee,

Please refrain from spooling crap to me from the California Budget Project. I know both those women, and they haven’t a thing to teach you or me.

Glenn

May 20th, 2009
5:57 pm

In the hope that this mitght be illustrative, I would observe that, overall, a bit more than half the cost of running California is owing to education, which is poorly and exhorbitantly delivered. How I get to that calculus is, by adding K-12 + Higher Ed + adult ed + an approximation of the education budgets of the remaining agencies, e.g. Corrections, the Youth Authority, Parks, etc. The point is that California, Inc., is bankrupt because of stupid education policy. Were they to think smarter they’d save everyone a lot of money while teaching the learners better.

Were you to ask such as those at the “Budget Project” how this might be done, they’d tell you to go fish. They’ve no idea how they are playing with fire.

@@

May 20th, 2009
9:19 pm

I would hope not, Jim.

The bolts have separated from the nuts in California and they took their money with them.

Resources are mobile.

Gandalf, the White! (!)

May 21st, 2009
8:29 am

Please pick my fruit.

PB&J

May 22nd, 2009
3:58 pm

Republicans love to create fear in Americans rather than educate them. See Bush… See Cheney. As a matter of fact, here another example of Cheney continuing to do the same ole thing… pathetic really. See David Brooks’ (conservative columnist) article on dirt bag Cheney: http://www.nytimes.com/2009/05/22/opinion/22brooks.html?_r=1

JimC

May 23rd, 2009
2:17 pm

Give California back to Mexico. And put a wall around it (not to keep out Mexicans, but to keep them and the overstuffed public employees IN).

JimC

May 23rd, 2009
2:21 pm

By the way, all you leftists posting here seem to be mighty long on opinions and very short on facts and logic. :-)

N.J,

May 28th, 2009
5:52 pm

No, its rather the conservatives who are short on facts and long on opinions. Californias problems can all be traced back to its first public tax cutting initiatives. Certainly these reductions in taxes did not result in the “supply side” revenues they asserted would occur (becaue unlike Reagan they didnt have a payroll tax on tens of millions or workers they could RAISE by one percent to offset the 250 percent tax cut Reagan gave to the wealthy)

Pretty much all of America’s economic problems started with the Reagan tax cuts, and even records from those days indicate that Reagan and Stockman were going nuts waiting to see all those Laffer curve dollars rolling in…however they ignored one end of the curve. The end that shows that taxes can be too low as well as too high.

Same thing occured in California.

The problem is, there really is not enough social spending to cut to get out of the mess. At the federal level, income taxes only amount to 42 percent of government revenues, while total defense obligations, past and present amount to 54 percent of the total budget. Cut EVERYTHING but defense and you would STILL have to raise income taxes to come up with enough to pay for the military and that leaves out the POLICE functions of the federal government.

No matter how you look at it Republican and conservative spending agendas create a rather Rube Golbergesque economic system, that ends up having to borrow from one revenue stream, the various pension trusts funded by payroll taxes, which take in more than they spend on the programs they are designated for, and spending it on areas that are separate from the programs these dedicated taxes were designed to fund.