4 ms·

I agree with you that the state of California is, all things considered, not doing too badly, and it looks as though it will be doing better in the near future.

by splat 17y ago

I agree with you that the state of California is, all things considered, not doing too badly, and it looks as though it will be doing better in the near future. I think that the original commenter was referring to the government of the state of California, which is in serious fiscal trouble. And it looks as though the state government's problems are going to be exacerbated in the future by the tendency of the state legislature for the last several years to "solve" any fiscal problems with temporary fixes and postpone real solutions. The state itself certainly still has a very bright future, but unless the legislature makes some drastic changes in the near future, the state government's future looks very troubled. "California" and "the government of California" are two very different things, and it's important not to conflate the two as often happens in these "California is going down the shitter" debates.

Retric 17y ago
Something else to consider when looking at all the doom and gloom around California is the relative income of the average person in California vs. the rest of the US. Median Household Income California $61,021 United States $52,029 Personal per capita income California – $33,749 United States of America – $31,632 Taking the population 35,893,799 of California * the income gap ($33,749 – $31,632 ) = 75,987,172,483 call it 76 billion per year. So yes they had a state budget gap of about 1/3 of the extra per person income vs. the rest of the country. But the idea it's bonds or IOU's became worthless is silly. Median income tends to reduce the apparent income gaps. If you look at the simple average, California makes a lot more money than the rest of the country on average. But they solved the problem by reducing spending and not taxing people more. http://online.wsj.com/article/SB124814401981267445.html http://online.wsj.com/article/SB124814401981267445.html PS: I expect USA to do the same thing, a minor tweak to our spending and taxes can quickly stop deficit spending.
- shpxnvz 17y ago
  PS: I expect USA to do the same thing, a minor tweak to our spending and taxes can quickly stop deficit spending. The Congressional Budget Office predictions were for the combined deficit for the next 9 years to be $9.27 trillion, and half of that from new spending. Those "tweaks" you are counting on to stop deficit spending don't seem to be so minor, and aren't even going in the right direction.
  - Retric 17y ago
    Stop fighting wars in the Middle East and then double check those numbers. http://www.usgovernmentspending.com/federal_deficit_chart.html http://www.usgovernmentspending.com/federal_deficit_chart.ht... http://www.usgovernmentspending.com/defense_chart_30.html http://www.usgovernmentspending.com/defense_chart_30.html Also breakeven is having the national debt grow as fast as inflation even though CBO considers that a deficit. 12 trillion * .03 = 360 billion / year. PS: There is still a gap but doing things like increasing the SS minimum age by 1 year and cutting back on defense spending might hurt but they don't exactly break our society. Next up remove the tax break on charitable donations.
    - shpxnvz 17y ago
      So, then, the "minor tweak" you are relying on is for the U.S. Government to pull out of Iraq and Afghanistan tomorrow? I don't see any indication of that happening. When the government actually puts any of those ideas into practice I'll be elated. Until then it's nothing but fantasy, and sure as heck no reason to expect that our deficit spending is under control.
      - Retric 17y ago
        I don't expect anything to change quickly. The US federal government is a long way from a true crisis and without that impetus it's far easier for politicians to keep spending silly amounts of money. However, when looking at budget projections you need to realize there is no mandatory spending. “Fixing” SS seems like a deal breaker but we have already increased retirement age with few real grumbles. In the past we drastically cut defense spending with few problems. And despite all the fear pulling out of Vietnam was hardly the end of the free world. So, yes, I think we will pull out of the middle east within 10 years but a few trillion her or there is not going to break the US economy assuming the government can keep paying such low interest rates. The important thing is adjusting future spending so we can keep those low interest rates.

by splat 17y ago

Retric 17y ago

Something else to consider when looking at all the doom and gloom around California is the relative income of the average person in California vs. the rest of the US. Median Household Income California $61,021 United States $52,029 Personal per capita income California – $33,749 United States of America – $31,632 Taking the population 35,893,799 of California * the income gap ($33,749 – $31,632 ) = 75,987,172,483 call it 76 billion per year. So yes they had a state budget gap of about 1/3 of the extra per person income vs. the rest of the country. But the idea it's bonds or IOU's became worthless is silly. Median income tends to reduce the apparent income gaps. If you look at the simple average, California makes a lot more money than the rest of the country on average. But they solved the problem by reducing spending and not taxing people more. http://online.wsj.com/article/SB124814401981267445.html http://online.wsj.com/article/SB124814401981267445.html PS: I expect USA to do the same thing, a minor tweak to our spending and taxes can quickly stop deficit spending.

shpxnvz 17y ago
PS: I expect USA to do the same thing, a minor tweak to our spending and taxes can quickly stop deficit spending. The Congressional Budget Office predictions were for the combined deficit for the next 9 years to be $9.27 trillion, and half of that from new spending. Those "tweaks" you are counting on to stop deficit spending don't seem to be so minor, and aren't even going in the right direction.
- Retric 17y ago
  Stop fighting wars in the Middle East and then double check those numbers. http://www.usgovernmentspending.com/federal_deficit_chart.html http://www.usgovernmentspending.com/federal_deficit_chart.ht... http://www.usgovernmentspending.com/defense_chart_30.html http://www.usgovernmentspending.com/defense_chart_30.html Also breakeven is having the national debt grow as fast as inflation even though CBO considers that a deficit. 12 trillion * .03 = 360 billion / year. PS: There is still a gap but doing things like increasing the SS minimum age by 1 year and cutting back on defense spending might hurt but they don't exactly break our society. Next up remove the tax break on charitable donations.
  - shpxnvz 17y ago
    So, then, the "minor tweak" you are relying on is for the U.S. Government to pull out of Iraq and Afghanistan tomorrow? I don't see any indication of that happening. When the government actually puts any of those ideas into practice I'll be elated. Until then it's nothing but fantasy, and sure as heck no reason to expect that our deficit spending is under control.
    - Retric 17y ago
      I don't expect anything to change quickly. The US federal government is a long way from a true crisis and without that impetus it's far easier for politicians to keep spending silly amounts of money. However, when looking at budget projections you need to realize there is no mandatory spending. “Fixing” SS seems like a deal breaker but we have already increased retirement age with few real grumbles. In the past we drastically cut defense spending with few problems. And despite all the fear pulling out of Vietnam was hardly the end of the free world. So, yes, I think we will pull out of the middle east within 10 years but a few trillion her or there is not going to break the US economy assuming the government can keep paying such low interest rates. The important thing is adjusting future spending so we can keep those low interest rates.