Saturday, August 26, 2017

Political Class Insanity and Economic Ignorance: California Update

We have often discussed the reality that politicians could not be any more ignorant of economics and financial planning than if they tried. Their economic strategies, policies, and stupidity usually make economic and financial conditions worse. Their idiocy usually comes down hardest on those that can least afford bad economic policies and environments, those at the lower economic scale in this country and around the world.

Their economic policies overseas have stifled economic growth and greatly reduced economic freedoms as we discussed in the following post:


Their economic policies at the state and local government levels in this country have crippled economic development in many states and cities. Detroit and several cities in California have already essentially gone bankrupt and the state governments in Illinois, New Jersey, and California are not too far behind when it comes to economic collapse, as the following posts and discussions reveal:






And the sad thing about these posts is that they are not all of the bad news that we have previously discussed regarding stupid politicians doing stupid economic things. I just got tired of listing all of them. 

Today we will discuss AGAIN how politicians, California politicians in this case, have managed to economically and financially wreck an entire state’s current and future financial well being. The basis of this review is an article by Scott Osborn, writing for the Joe For America website on August 20, 2017, “Point Of No Return! California Faces Imminent Financial Collapse!”:
  • The state of California has incurred and is now carrying a debt load of $340 billion.
  • This comes out to a whopping debt load of over $8,700 for every man, woman, and child in the state.
  • But that is of today, experts peg the future debt load just for the state pension system at $1 TRILLION, about three times higher than the obscene current debt burden of $340 billion: “California is a cautionary tale for taxpayers in the rest of the country. The people of California are being burdened by an unsustainable, unfunded liability – a $1 trillion dollar government pension system. At the end of the day under California law, the taxpayers will subsidize the shortfall in the budget.”
  • While California has 14 million people working in private sector jobs in the state, there is almost the same amount of people (12.6) million not working and who are living on welfare benefits.
  • There are 2.1 current state and local government employees but there are 1.3 million people collecting government pensions in the state.
  • There are 114 people getting government benefits in the state, either by drawing a government worker check or by getting welfare, for every 100 people outside of government paying taxes to support the 114.
  • And this outrageous state government debt was incurred despite the reality that California has one of the highest, if not the highest, state income tax rates in the country.
  • For many working people in California, if they moved to Texas and maintained their current income level, their tax savings would enable them to buy a new car every year.
  • While there are rich Californians living in Hollywood and Silicon Valley, poverty permeates the rest of the state with homeless people creating tent cities in other parts of the state and the L.A. City Council recently pleading with governor Jerry Brown ““to declare homelessness a statewide emergency“. 
  • Despite the sky high taxes, the state’s infrastructure is falling apart with even the governor recognizing the fact and calling for another $100 billion to be spent to fix the infrastructure.
  • In a previous post, we cited the reality that about 40% of L.A. residents are on the Medicaid roles, indicating a very low level of income for 40% of the city’s residents.
  • High taxes, bad employment opportunities, high crime, bad schools etc. have resulted in a net migration out of California of about 5 million people in the past decade.
  • I would assume that a high proportion of those moving out were not welfare cases but were likely highly productive, tax paying, working individuals, which if true, would put even more pressure on the state government’s tax revenue collections.
  • The author cites his success in escaping California: a 25% reduction in the cost of living, a 15% decrease in income, a $2 a gallon drop in gasoline prices, and the purchase of a livable 3,200 square foot home for less than a third of the price of a comparable home in California, and no state income tax...and a new car every year if he wanted it.
Thus, only politicians can take the most beautiful piece of property in the country, have the most residents, have the most tax revenue, have the the built in, perpetual wealth of Hollywood and Silicon Valley but yet have some of the worst schools, the worst run pension systems, have the highest debt, have some of the worst public infrastructure, and the worst economic outlook of just about any state in the union. 

Economic ignorance is too tame a term to describe what the California political class has done to the state, its citizens, and its future. Let’s just hope that the cancer that is California economic ignorance can be contained before it spreads elsewhere in the country.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:


www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w







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