The state debt is now growing at a pace of $1.7 million dollars an hour. I could conceivably live off that much money for the rest of my life if I didn’t go insane like most lottery winners.
Bankruptcy is now predicted for February – which means it’ll probably happen in the next few weeks to a month, as they are *always* wrong about this shit.
Bill Lockyer, the treasurer of California, has cautioned that $5 billion of public works projects, including road and school construction, will have to be canceled because the state’s lenders are worried about an impending Iceland-style bankruptcy. California — which has a GDP of $1.7 trillion — already has the worst credit rating of any of America’s 50 states. “Without a budget solution, state financing of infrastructure projects will stop. It’s as simple, and dire, as that,” Mr Lockyer said this week.
We’re the ass-end of the world’s largest ass at this moment, the US federal government. California has flushed it’s FICO down the drain through disastrous mis-management of it’s utility system and now it’s budget thanks to Governor Schwarzenegger (Governor Spentallyerdollars?).
California’s biggest problem is the precipitous decline in tax revenues over the past year. The state’s property taxes — the equivalent of Britain’s council taxes — are based on the value of a house when it was first bought, and can then rise by no more than 2 per cent a year. This means that by far the most tax revenues come from new property sales, and these have all but dried up.Tax revenues have also been hit by the global recession. and credit crunch.
A financial model relying only on growth in an ultimately space-limited domain. It strikes me that maybe we should have a tax model that spreads the burden evenly amongst the population in relation to the percent of income they receive – i.e. a fixed percentage tax rate. As an example 1% with up to .25% percent allowed deductibles which could lower the rate down to .75% down to a certain minimum where it would cost more to get the tax than the tax paid), and apply that to all assets as well, all businesses. California has a GDP of $1.7 trillion. That would generate anywhere between $12 and $17 billion in revenue (I chose 1% because it’s easy, not realistic). Unless, of course, they use fuzzy math to calculate the GDP (like including what homeowners would have paid themselves in rent for living in the houses they own, that the US official GDP includes and then also includes as income to their leinholder the actual money they pay on their mortgage).
In any case, a flat tax across all assets, property, income and sales that was targeted at the ratio of their value relative to California’s projected budgetary needs would, um, balance the budget. Include a pad so that if everyone takes the maximum allowed write-off the budget will still be payed for, that way our asses will be covered if everyone takes their write-offs, and if people don’t the extra can go to modernizing/repairing/beautification of the state.
Oh, and please, stop wasting money advertising California as such a great place to live. The grass is not greener on the other side. People here can be just as shitty and fucked up as anywhere. We are not that cool, we’re just great at branding.