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Economy

Cal. gov. wants draconian spending cuts

2010-05-15

California Governor Arnold Schwarzenegger is set to unveil his revised budget after four months of legislative debate failed to close a budget deficit calculated at $20 billion.

Schwarzenegger's updated budget, scheduled to be released on Friday, is expected to call for eliminating various state programs with health and welfare programs expected to bear the brunt of cuts, Reuters reported
Just a suggestion, but wouldn't it make a lot of sense to start cutting the most recent first?
The report also says that teachers are expected to lose jobs and cities will be forced to hand over revenue.

Earlier this year, Schwarzenegger acknowledged his proposed spending cuts for health and welfare programs were "draconian" but he reportedly believes that the state's $20 billion budget deficit will be closed mostly through spending cuts.

However, the governor of California has ruled out raising taxes or closing corporate tax loopholes, saying doing so would harm the state economy, Associated Press reported.

Democrats in the California State Assembly say they will not accept more cuts, but Republican lawmakers are standing with the governor.

Time is running out for the two sides to reach an agreement on a spending plan for the state's next fiscal year, which begins on July 1, but pundits predict the impasse will not be resolved by the deadline.

Posted by:Fred

#11 129 'Business Disinvestment' Events in California

Some big names there.

I wonder if any comparably large corporations have moved into California to replace the loss.

Drip, drip, drip, . . . .

Posted by: gorb 2010-05-15 23:37

#10 The sad thing is that all this hair pulling is over $20B which when extended over the entire USA would amount to $150B. This in a year when the federal government is expected to run a deficit of $1,600B. I guess things look very different when you have a money printing press.

Posted by: ed 2010-05-15 15:31

#9 129 'Business Disinvestment' Events in California

Posted by: Pappy 2010-05-15 15:19

#8 Having just left state service as an Appointee of the Administration, I must tell you that I have zero confidence this will produce cuts at the levels needed. Even with all these proposed cuts, the state still wants 4 billion in federal bailout to break even. laughable...
The shortfall in revenue is based on 12.7 % unemployment, utter loss of the manufacturing base, no remaining defense industries, tourism dropping as the attractions are increasingly surrounded by crappy conditions, and now, the dipshits in charge have allowed water politics and thr protection of a little tiny fish, to destroy what was left of agriculture in the central valley. last year they got 10% of normal water supplies, so the bulk of the central valley went fallow. In the southern central valley of California, with 40% unemployment for the predominantly agraicultural work force, the food banks were giving out charity food PURCHASED in CHINA!!!!!!!!

They need to cut the elephant in the room, mandated-education spending, and the other elephant in the room, the 3 million illegals who use every aspect of state services-especially medi-cal and the school programs like free breakfast and lunch. Try getting the demokrats here in Sacramento to take a bite out those apples.
Instead, we will be treated to the longest period yet of no-budget, state government shut down, non-bill paying, state government as a flake behavior in US history.
Makes you wonder why anyone who actually works here would stay.

Posted by: NoMoreBS 2010-05-15 14:45

#7 You cannot go back to sustainable levels of spending. You have to go back to austerity levels in order to have the reservoir fill. To bring down the debt you have to have the extra money to pay off the debt. That is the problem with running up such a huge tab. You have to painfully climb back to ZERO.

Posted by: Alaska Paul 2010-05-15 14:35

#6 The gov is standing up to try to fix it. I give him that much. I dont care how he cuts or where but he must cut, and he must not lose any more industries.

Posted by: 49 Pan 2010-05-15 11:33

#5 As Instapundit noted, Stephen Green points out that this would return spending to 2008 levels. Laficornia government was rather, um, ubiquitous even then.

I'd dial it back to 2006 levels and see what happens. If a deficit remained I'd dial it back to 2004.

Posted by: Steve White 2010-05-15 09:57

#4 Just validate income, then use the budget and personnel authorizations from the past that matched that amount. It's simply an issue of will against special interest groups.

Posted by: Procopius2k 2010-05-15 08:37

#3 I would cap those over generous public pensions and cut out all that green job bullshit.
I guess that means I'll never be governor of lala land.

Posted by: NCMike 2010-05-15 08:18

#2
Now they can't even pay their own debt.

I'm reminded of the maxim - No one is smarter than the market.

Posted by: phil_b 2010-05-15 03:43

#1 Reality check: See what happens when you overspend? You have less than what you started with.

But it sure felt sooooo gooooood while it lasted, didn't it? See, there's proof everywhere that giving entitlements to anything and everything that moves is good!

Maybe Obamao can redistribute more of the People's Money your way, making Calipornia and its socialist, vote-buying, amnesty-granting ways a success after all!

We can do this forever! All we need is more money! There's more money out there somewhere, you just have to find it. It isn't generated by profitable, unencumbered business, it's everywhere! It grows on trees! It's in the ground, water, and air! And if that isn't enough, we just need to make the system bigger until we find it! There is no limit! Not even the US borders or the world is a limit! All we have to do is to vote more money for ourselves, and it will materialize! Nobody else but us deserves or wants these entitlements, so they won't mind!

------ End hair-pulling I-told-you-so rant ------

If I remember right, during Reagan's administration as governor there, CA had the seventh largest economy in the world.

Now they can't even pay their own debt. Instead, they issue IOUs.

If I were Arnold, I'd seriously consider getting rid of unemployment, housing subsidies, food stamps. I'd be running out the illegals by requiring honest ID at every important turn like housing, jobs, buying a car, etc. and by taking their stuff and summarily shoving them back across the border if they aren't legal. No anchor babies. I'd shut down/privatize most of the government. People would learn about the meaning of community and society. People need to relearn the meaning and value of charity. Right now, people are walled off from each other due to a lack of need for both. I'd also declare open season on taggers, gang-bangers, and hard drug producers and middlemen.

A prudent driver does not out-drive their brakes. And a prudent government would never out-spend what they could pay back during lean times, which are an capitalistic necessity to ensure lean businesses.

Posted by: gorb 2010-05-15 01:25

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