California Budget Impasse Begins To Hit Home

I wonder how much will have to completely fall apart before The Governator and his Legislature decide it is not dishonorable to compromise.  

It's a bit scary to be living here right now, IMHO.

No Heroes

While the minority of Republicans on the CA legislature are casting themselves as saviors of the people by refusing increases in any taxes, and Governor Schwarzenegger keeps trying to decide what his stance-of-the-week is going to be, California is about to run out of money. That could hurt a lot more people than some of the proposed taxes might, folks. The problem is that the deficit is so big that it is probably going to take some increased taxes, some increased fees, AND spending cuts to close the gap. Because $41.6 BILLION (projected deficit) is a lot of money!

I don't know about you, but the tactic I am most tired of seeing is that of borrowing more and more for the generations that follow ours to have to cope with. That's what seems most unfair. There are services we want and need but we don't want to pay our own way. That's because we were told we didn't have to: we can have low taxes AND increased government services! a miracle! just keep borrowing...  (but with a low credit rating... )

The Governor's earlier plan to stop paying state workers until a budget agreement is reached absolutely shocked me. The state is in a recession as it is...we need more unemployment??? And the state workers have zero control over whether a budget agreement is reached or not. Why punish them? Not to mention the lines at the DMV are long enough, don't you think?

Lastly, we are one of a very states to require this difficult-to-obtain 2/3 vote of the legislature to pass the budget every year. I believe the others are Rhode Island and Arkansas. Now I love Little Rhody; both of my parents come from there and my alma mater is there. But it has always had a very corrupt government that operates, in a strange way, in an almost folksy manner. I don't know much about Arkansas. But I do know the 2/3 is a huge obstacle in California and we waste a lot of time and money by budgets being chronically late and, after all the wrangling, written badly.

I want to know what we would save over time by not providing elected officials with health care. Some of them keep insisting they love the "free" market for health insurance so much that I really think we need to do them the favor of being reunited with it. And those are the same ones who want spending cuts so badly; give them the precious gift of one. I am extremely tired of the poor and the sick always taking the hits. You would think that more of the self-professed Christians would be with me on this one, but they seem to skip over the Sermon on the Mount in a big hurry, in their search for every piece of scripture they can find that might justify prohibiting gay people from marrying. Priorities, you know.

Anyway. I take the Next 10 Challenge every year and balance the budget every time, but the odds of my ending up in charge of the budget in real life are pretty tiny ;)

Real Estate, the safe investment...

Real estate probably is relatively safe: in the long term. But all investment involves RISK. And any market can be bubblicious for awhile...inflated and reinflated till you hear the POP.

I'm sorry, homeowners, but I am not joining the ranks of those screaming for home prices to return to pre-bubble levels.

My reasons:

1. I don't think this would magically transport us back to pre-recession. The cat is out of the bag re the economy. Those of you who were conned into believing that as long as you were willing to suffer the effects of the Stealth Wealth Transfer (the one no one talks about...) that the economy would keep rolling along like Old Man River were: duped, ripped off, lied to, manipulated, taken for a ride. You should be angry. But not at "liberals" or "taxes" or "welfare scum" or even "9/11" or anyone or anything except the greedheads who took the money and are doing their best to run (and maybe also the people who let them do it.)

2. Betting the farm on housing prices that were out of the reach of salaries was...well...stupid. I don't mean the homeowners were stupid. Most of them were just trying to own their own shelter. Shelter, we seem to have forgotten, was once considered a necessity of life. No, I mean the folks who bought the loans and sliced and diced and packaged and repackaged and then sprinkled derivatives all over the place, assuming that somehow people whose wages had been flat-lined for years could pay for housing prices going up, up, and away...common sense deserted them completely. What is totally unfair is how we are all having to end up paying for it.

Housing prices need to end up being reflective of the incomes of people in the area where the housing is located. Obviously if this means a big drop in prices slow going is far more safe than a big crash. But the absolute long-term goal shouldn't be for them to end up where they were, unless someone is planning to talk to the Wage Fairy and get folks a better deal.