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For longer than we can remember it seems California has been a trend setter
for the rest of the country. When it becomes fashion in California it is
only a matter of time before the rest of the U.S grabs it and runs with it.
The economic situation in California right now is a disaster and unless we
wise up and learn from California's mistakes we are as usual going to grab
hold and run with it right off an economic cliff. It seems with the current
frame of thought in America we are destined to make the same mistakes and possibly
wake up one morning as a country and find we are in way over our head with no life line to
grab.
I found an interesting article in the Washington Post of which I will put a
link to. It is by Robert J. Samuelson and is titled "California's day of
reckoning - and ours". This is one of the few pieces that I have seen which
deals in reason and common sense without twisting the subject with a lot
of "hope for change" and I felt I should rave about it. California was already in over it's economic head
when the recession hit but with the recession things got really ugly. The
article reports; California has been harder hit than most states.
Unemployment, now 11.6 percent (national average: 9.5 percent), could top
13 percent in 2010, says economist Eduardo Martinez of Moody's Economy.com.
This along with dismal housing sales and plunging tax revenues have caused
an economic wreak for California and only recently was the state able to
close it's massive annual budget deficit.
I was surprised when I heard that California made massive cuts into it's
government services in order to close the budget gap, however it seems from
this article and some basic reasoning there was little else that could be
done which would not lead to economic suicide. Although the states liberal
population who seem full of hope that something will change before the bill
comes due are distraught about the cuts, facts are facts. California already
has one of the highest income taxes in the country. With it's "progressive"
social services programs it has attracted millions of "undocumented
persons" who once established in the state bring more family who are also
undocumented and thus not paying into but taking out of the states
coffer's. Also according to information Mr. Samuelson gathered "California
scores poorly in state ratings of business climate. In a CNBC survey, it
ranked 32nd overall but last in "cost of business" and 49th in "business
friendliness.". The Democrats wanted to raise taxes even more to cover the
deficit. The situation in California however breaks down to a very simple economic formula. In my
freshman year of college I studied cases in which people who had patronized
a business for years began walking across the street to a new business in order to
save a nickel. Do the Democrats in California believe business's will come
to California just because it is California. Should I move to California
and endure outrageous taxes and living expenses just so I can say I live in
California? Business's have already been leaving the hostile business
climate in California for some time now. Even the die hard, left leaning,
liberal Hollywood group has been abandoning ship. Mr. Samuelson states "High
costs, as well as tax breaks from other states, have caused movie studios
to shift production from Southern California. In 1996, feature films
involved 14,500 production days in the Los Angeles area, says FilmL.A.; in
2008, the figure was half that". The simple equation is that raising taxes
to support social welfare and health programs discourages business and thus
tax revenue decreases as business's move or do not locate in California
because of expense. On the other hand millions of "illegal" persons move to
California due to it's welcoming welfare system. This puts an even larger
burden on the state's programs to care for "legal" citizens in poverty
conditions.
With an example so close to home I find it difficult to understand why this
administration seems to be running us straight for the cliff of economic
ruin that California is in the midst of. California is by far not out of
the woods yet. It has made tremendous cuts in it's social programs which in
my opinion was the only thing to do. This however will have repercussions
and will be felt throughout the state for some time. Now America seems on
the verge of making similar mistakes and running straight down the same
road. It is a simple formula, the more "free" health care, welfare, housing
(HUD), programs we have the more persons we will attract who contribute
little to support our economy. The more we raise taxes on businesses and
entrepreneurs to pay for these programs the more businesses will move to a
less hostile environment. I would think there are many, many countries which
would welcome with open arms American businesses who find it to expensive
to make a profit in the states. In fact it has been happening for years
already so a larger burden will only increase this exodus. While America is prosperous it has been one of, if not the most charitable nation in the world. But what good is it if a man gives his money away to charities and by doing so makes himself and his family a charity case? Simple as it is we seem doomed to repeat our fellow countryman's mistakes and just continue to
"hope something will change" before the bill collector comes calling, which
may be sooner than we think unless we learn from California's social utopia dream or nightmare as it now appears.
In case the link on the side does not work here is the address to the article.
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/02/AR2009080201253.html?hpid=opinionsbox1