As it stands today, the once great state of California, which in 2001 boasted the 5^th largest economy on the planet, is $21 Billion in debt.  The Leftist politicians that run the state can’t stop spending money they don't have on ill-conceived social projects, radical environmental initiatives, education and health care for illegal immigrants, and giveaways to the powerful teacher’s and government employee unions.  Governor Arnold Schwarzenegger who originally ran as a tax-cutting, spendthrift Republican surrendered to the powerful leftist constituencies in order to get re-elected in 2006. I n his annual State of the State Address he proclaimed: “I have absorbed my defeat.  I have learned my lesson.  To my fellow Californians, I say: ‘message received.”  That message was to spend, spend, spend and buy the votes needed to remain in office.  So how did that work out?  For Arnold great.  He was re-elected.  For Californians, not so much.

You see; for starters, California’s tax system is broken.  It receives 50% of its personal income tax revenues from 1% of tax payers and 15% of the state budget from state income taxes on capital gains.  This is a problem because both the incomes of the wealthiest tax payers and capital gains can fluctuate from one year to the next and decline drastically in a recession.  Projecting tax revenues from these sources and then basing a budget on them has proven disastrous.  Add to this the fact that according to the Tax Foundation, California ranks 48^th out of 50 states in business tax climate and has the 6^th highest personal income tax burden in the country, and you can see why businesses and high-income earners are fleeing the state in droves.

The situation is quite grim.  The powers that be in California are incapable of slowing spending and don't care about businesses or tax-payers.  They only care about the special interest groups that get them re-elected, namely: the teachers unions, the government employees unions, the environmentalists and those enslaved on the public dole.

Let’s start with the unions.  From 2002-2008, California’s education budget increased by 46% when there was only a student population increase of 1%.  A large percentage of this increase went directly to the CTA (California Teachers Association).  When the CTA makes demands, they are paid off, likewise for the Government Employees Unions. A study years ago concluded that California state employees are paid about 30% more than their private sector counterparts for jobs of comparable skill level.  California is locked into expensive labor contracts that guarantee high pay, health care for life and generous retirement benefits.  Like GM and Chrysler, California’s unions are driving the state out of business. .

The radical environmental movement is headquartered in California.  They use junk science, campaign cash and voter ignorance to advance their socialist agenda.  According to a study in 2006 by the Public Policy Institute of California, 65% of Californians don’t think the federal government is doing enough to stop global warming and two-thirds support state efforts to address climate change.  Studies like these illustrate the ignornace of the voting public and green light the radical agendas.   California legislators have passed the most far reaching environmental laws in the country.  They became the first government to regulate CO2 despite absolutely no scientific proof that CO2 causes global warming.   This law directs industries to reduce emissions by 25% over the next 13 years.   Yet another law directs auto-makers to reduce emissions by 30% by 2016. This year, they are considering another law to regulate and restrict chemicals used in products and industrial processes.  All of this policy is based on shaky science will only result in one thing: higher prices for the consumer and less business in California.

Another reason that California is bankrupt is welfare.  Simply put, California is the welfare capital of the U.S.  According to the state’s welfare statistics: the percentage of residents on welfare is triple the rest of the U.S, and while welfare caseloads in the rest of the country have dropped 30% in the past 5 years, California has increased 6%.  One big reason for this is illegal immigration.  According to the Department of Public Social Services in Los Angeles, 25% of the county’s welfare and food stamp benefit goes directly to the children of illegal immigrants and the total cost for illegal immigrants to county taxpayers far exceeds $1 billion per year.  That's just in Los Angeles County. California’s willingness to welcome illegal immigrants into their generous welfare system may be compassionate but it is unsustainable.

What are we to take from the failure that is California?  Just the truth.   The Leftist politicians that run the state have implemented disastrous policies that have bankrupted the state, driven business away and transferred too much wealth from those who contribute to those who consume.  This model has failed.  Much more troubling than this fact, however, is that this very failed model is being implemented at the Federal level right now by the Obama Administration.

President Barack Obama campaigned on over-taxing high-income earners, corporations, small-business owners and capital gains.  He submitted a budget that creates a spending deficit 4 times the size of President Bush’s.  He is literally printing money to keep up with all of his spending.  On the union front, it is clear now that President Obama’s bailout sof GM and Chrysler are nothing more than a gift to the powerful unions that will now essentially control those companies, and his so-called stimulus plan has done nothing more than add thousands of government employees to the union ranks.  For the environmentalists, he expanded California’s radical automobile emission standards to every state.  This will increase the cost of automobiles significantly for every American. Finally, President Obama appointed Arizona Governor and open-borders advocate Janet Napolitano to Head the Department of Homeland Security.  As Governor of Arizona, Napolitano favored amnesty and actually vetoed a bill depriving in-state college tuition to illegal aliens.

Those that ignore history are doomed to repeat it.  It looks like President Obama is California Dreaming and for hard-working, freedom-loving Americans, it’s a nightmare.


Sources:

Arnoff, Alan; "California: A Failed State"; www.americanthinker.com
    May 26, 2009

Schmidt, Charles, W.  "Environment: California Out in Front"; Environmental
    Health Perspectives; March 2007