Sunday, June 28, 2009

California one month away from bankruptcy

The state of California is about one month away from being unable to pay the rubbish collectors. This is pretty serious considering that if it was a country it would be in the top 10 economies of the World. It's GDP provides the US with 13-15% of its annual GDP. As I say, it's pretty serious.

Remember my post on the union-inspired collapse of General Motors? The same factors are at play with California.
The governor readily admits that he sees the crisis as a chance to make big changes to government -- to "reform the system," he said Friday -- with proposals he has struggled to advance in the past.

Among them: reorganizing state bureaucracy, eliminating patronage boards and curbing fraud in social services that Democrats have traditionally protected. The governor also would like to move past the budget crisis to reach a deal on California's water problems that has so far eluded him.

In past years, his plans ran into opposition organized largely by well-funded labor groups and Democrats, who say his proposals are really meant to strangle government. Now he is newly armed with negotiating power over Democratic lawmakers desperate to preserve state programs.

Back on the governor's demand list is a plan to cut the pensions received by state workers, which unions have stymied before but which he thinks may gain traction with a cash-strapped public. Schwarzenegger also views this as an ideal time to once again target growth and fraud in the state's multibillion-dollar in-home healthcare program, which employs 300,000 unionized workers.

His agenda includes anti-fraud efforts and tougher enrollment requirements for the state's food stamp programs, efforts that advocates for the poor say are designed to discourage people from participating. In his radio address, he said the state and counties could get by with a "fraction" of the 27,000 workers now handling eligibility for Medi-Cal and food stamps by using Web-based enrollment.

Schwarzenegger has revived plans to allow local school districts to contract out for services like school bus transportation and lawn maintenance, a proposal favored by the GOP but despised by school employee unions.
Yep, wonderful things those unions. First they engineered the downfall of GM, now it's California. New Zealand ain't that far away.

Hat tip: PM of NZ.


ZenTiger said...

I would have thought a "Hollywood tax" could save them.

Most Hollywood actors believe they need to save the planet - they should be lining up to give their money to the State.

And the royalties from the Terminators series movies must be a small help.

Tax em where it doesn't hurt - Hollywood.

Anonymous said...

Heh. This just shows how great the tax cap is and that it's the only way to finally tackle unions and rampant welfare. Best thing wokld be if California went bankrupt!

Bring on Rodney's rate caps and Roger's plan for the same thing in NZ. Of course the UK and Europe are mostly bankrupt anyway: this is how socialism ends!