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:

https://loathemygovernment.blogspot.com/2017/07/july-2017-part-4-political-class.html 

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:

https://loathemygovernment.blogspot.com/2017/02/people-want-to-be-freeas-do-california.html

http://loathemygovernment.blogspot.com/2017/02/februrary-2017-part-3-political-class.html

http://loathemygovernment.blogspot.com/2012/10/why-californias-distressed-economy-is.html

http://loathemygovernment.blogspot.com/2012/07/why-california-is-failing-while.html

http://loathemygovernment.blogspot.com/2012/07/state-level-economic-musings-california.html

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

June, 2017, Part 8, Political Class Insanity: CNN Rigs The News and Illinois Enters Into Financial Hell

As we do every month, we review the latest idiocy, lunacy, ineptness, and general insanity from the American political class. We are getting started as little late this month since we needed to review the latest global warming.climate change insanity from the likes of Al Gore, culminating in our review of the 26 reasons why it was appropriate and necessary for Trump to pull us out of the Paris Climate Agreement:

http://loathemygovernment.blogspot.com/2017/06/june-2017-part-4-i-am-global-warming.html

But let’s quickly get into this month’s political class insanity because over the past month or so there has been a lot of it was Washington implodes into a useless pile of incompetence:

1) While the political class has done very little to protect and enhance our freedoms over recent years, the so-called free press in this country have not done much to enhance freedom and truth either. We have previously reported on how the free press has become just as corrupt, just as partisan and just as useless as the political class when it comes to truth in reporting and high integrity journalism:

http://loathemygovernment.blogspot.com/2016/09/the-perversion-and-death-of-unbiased.html

http://loathemygovernment.blogspot.com/2016/09/the-perversion-and-death-of-unbiased_29.html

It seems nothing has changed since these posts from last September, at least when it comes to CNN, which was once known as Cable New Network and then became the Clinton news network while the unabashedly campaigned for a Hillary Clinton victory and they have no further degenerated down into simply the Comedic News Network:

• According to Kristie McDonald, writing for the eHeadlines website on June 11, 2017, CNN in England was caught setting up a fake news story shortly after the latest terror attack in that country.
• CNN personnel were on the streets of London for what they wanted to make look like an anti-terror protest, led by Muslims apparently to show that not all Muslims are sympathetic to Islamic terror attacks.
• But thanks to the reality that everyone with a smartphone also has a video camera, video footage taken by regular people, and posted on YouTube, showed how CNN personnel were staging the rally, not reporting on the rally.
• The person shooting the video reports that there are “more press than anyone else.”
• The Muslim women supposedly protesting the terror attacks were getting their posters and flowers from the CNN personnel, i.e. this was a staged protest for the CNN cameras not a real protest.
• Once the women get their CNN provided props, they cross the street for the filming of this “news” story.

When corrupt politicians lie and cheat and have no integrity, it has always been the important responsibility of the news media and press to call them out on their lies and shenanigans. When the pores are the ones creating false truths and trying to influence views rather than report on facts and realities, our democracy is in very sad place, thanks in this instance of heinous reporting to the Comedic News Network.

The video of the setup to the fake news story can be viewed at:

http://eheadlinespolls.com/breaking-more-footage-leaks-of-cnns-staged-muslim-anti-terror-protest-video/

2) Earlier in this month’s insanity series we reported on how state politicians around the country have so badly screwed up the fiscal integrity of their state’s financial situation, allowing state governments’ unfunded liabilities to soar well over $1 TRILLION. The obvious conclusion is that politicians around the country, be they at the state, local, or Federal level have no ability, no will, or no knowledge on how to operate an effective budget process, incurring $20 TRILLION in debt at the Federal level and trillions of dollars in debt at the state, county and local level.

And at some point these financial insanities will come home to roost. It will then require state government to raise taxes, cut benefits, or eventually declare bankruptcy, all options that are ugly but highly likely to be unavoidable.

And the leading indicator in that race to fiscal ugliness, according to Nancy Hayes, writing for the Joe For America website on June 19 2017, is the state government of Illinois:

• According to a recent comment by an Illinois state government official, “We are in massive crisis mode, this is not a false alarm.”
• The state government has over $15 billion in unpaid bills on this books.
• The state government has not had a budget in three years.
• It is likely to be the first state government to have its bonds downgraded to junk quality in the very near future.
• A judge recently ruled that the state government is in violation of its own consent decrees and previous judicial orders, putting further pressure on its shaky financial situation.
• In desperation, the governor recently ordered the state legislature back into session to address the financial mess, telling everyone “to get serious and get to work.”
• As with the financial and heaving taxation and regulatory mess in California, people are leaving the state of Illinois with 22,000 leaving in 2015 alone.
• In Chicago, the epicenter of bad fiscal planning by local politicians, over 6,000 people left that city in 2015.
• The Tax Foundation claims that the state of Illinois has some of the highest property tax and other taxes in the nation, probably a leading factor in why both residents and businesses are leaving Illinois for better tax treatment elsewhere, causing Illinois to have 90,000 fewer manufacturing jobs today than in 2008.
• Chief Executive magazine ranked Illinois 48th out of 50 states relative to the ease of doing business in Illinois with taxation ranking the state as 50th out of 50.
• And as if the $15 billion in unpaid bills today is not enough of a headache, the unfunded pension liabilities of the state retirement systems is over $111 billion.

Given the sad state of financial affairs, the already high taxes, the out migration of residents and businesses because of the high taxes, what do Democrats in the legislature want to do? You guessed it, raise taxes. Let’s just throw another few gallons of gas on that fiscal fire, idiots. I what you have been doing for decades got you to where you are today a disaster, why would you want to continue to the same thing over and over again, raise taxes?

It is usually at this point where we cite our favorite Einstein quote: “The definition of insanity is doing the same thing over and over and expecting different results.” And the fiscal ineptness of Illinoi politicians have gotten them the following insanity distinction relative to the rest of the country:

What does it look like when a government and the politicians that operate it have no idea how to operate a fiscally sound budget? It looks like today in Illinois:

• The state Transportation Department will stop any and all road work by July 1 unless budget conditions change.
• The Powerball lottery system may dump the state out of its system since the state cannot and has not paid lottery winners for a while now.
• If the state is judicially forced to pay out what was settled in previous court cases and consent decrees, within a few weeks, the state will be paying out more in payments than it receives in revenue, leaving no money for schools, domestic violence shelters, ambulance services, etc.
• State Comptroller Susan Mendoza, the government official responsible for managing the state government’s cash flow and financials said it best:“I don’t know what part of ‘We are in massive crisis mode’ the General Assembly and the governor don’t understand. This is not a false alarm.” 

What a flipping, political insanity mess. And keep in mind that a lot of this problem developed while the economy was in a growth mode over the past eight years. Imagine what happens when the next recession sets in and Illinois has fewer taxpayer and fewer businesses to offset the recession’s impacts. 

Truly insane but quite possibly coming to a state or Federal government to you very soon. Illinois is the proverbial canary in the coal mine, a coal mine that Federal and other politicians have dug for us all.

That will do it for today’s insanity. Very sad, very depressing, very pathetic and very dangerous: politicians screwing our financial state and CNN screwing up our freedom of the press state. More insanity to follow.