As if the depressing business of paying for the federal stimulus package weren'tenough, California residents can now look forward to not even gettingthe share they needed to avoid paying more to the state.
The Los Angeles Times reportsthat "a fresh analysis of California's flagging fiscal situationsuggests thestate needs about $2 billion more than Washington is providing." Thatis, if it wants to avoid "the full brunt of tax hikes and spending cutsthat lawmakers approvedlast month to settle a contentious 100-day budget stalemate."
Well, at least the starving artists are getting paid! That's sure to give California's economy a boost, right? Or...at least some parts?
Actually, not even Schwarzenegger's analysts know what is happening to the budget. According to the Times,Schwarzenegger (apparently auditioning to return to his action starrole as Captain Obvious) has stated that "there's mass confusion" abouthow much the federal money will help to save California from herself,especially considering that before now, California never had to rely onFederal Money. Schwarzenegger apparently longs for a return to thosegood old days when California was an economic powerhouse, callingFederal spending "icing on the cake." Because obviously, when cakesfall apart, everyone knows it's a good idea to depend on the "icing."
So what exactly is California in for now that it turns out that theother 49 states haven't been generous enough with their federal taxmoney? Well, for one thing, the current maximum income tax rate willrise from 9.3 to 9.55 percent, thus giving the entire population of Hollywood0.25 percent more reason to move to another state. Not to mention all the richpeople who actually produce something. But, naturally, thisminor tax increase isn't what California's budgetary monitors are mostconcerned about. That would require them to actually care aboutstimulating the economy. No, what really is getting the state sovernment's goat is that they can't ease the spending cuts, specifically to "universities, courts, social services and healthcare programs."
Because obviously we don't spend enough on education, courts, "social services" or healthcare. It's not as though California's welfare state is almost European in scale already! Why, if we cut spending, we might actually be in danger of acting like the rest of the U.S.!
Joking aside, this automatic jump to the strategy of "save thespending" is precisely the reason why California is currently stuck ina budget crunch in the first place. According to blogger Tom Blumer,California accounts for 12 percent of America's workforce, and 15 percent ofAmerica's unemployed at the same time, also shown in this report by the Bureau of Labor Statistics. Moreover, as Blumer points out, "The percentage of residents on welfare in the Golden State is now morethan triple that of the rest of the U.S. If it reflected the rest ofthe country, California would have 800,000 fewer people receivingwelfare."
I'll repeat: 800,000people. That's more people than it takes to run a small business, oreven a relatively large one. This is a population which, if put back towork by a little tough love, could probably fix California's budgetcrisis by both creating wealth and consuming it! As opposed tothe current situation, where all they do is consume other peoples'wealth and...well, keep doing so. This is a problematic situation atthe best of times, and if the state weren't in crisis, this alone mightwell count as a crisis in itself.
So let's hope the "icing on the cake" isn't strong enough. Maybethen Schwarzenegger can finally cut off the piece of the welfare piewhere these 800,000 people have all stuck their fingers.
