States Going Broke

Which state is going broke the quickest? If you guessed California you are wrong (although that is a good guess). It is Kansas. The facts are being revealed that the state is in jeopardy of not being able to make payroll in the next week. Presently, there is not enough money in the state's bank to cover the payroll due the state employees. To my knowledge, this is the first state in this predicament.

How did we get to this point? What happened to all the tax dollars the state collected from the citizens who reside in Kansas? I will tell you what happened: the politicians in charge of the money spent it recklessly. We are seeing this same situation all across the country. California. New York. Massachusetts. And Kansas. Politicians spend money like there is no end to it. Yet, when it runs out, they are surprised.

Of course, this could be part of the reason for the massive spending bill (sorry but to call it stimulus would be lying to my readers). It contained "bailouts" for the states which blew the budgets to all hell. Personally, I think those in power ought to be forced to resign before one dime is given to them. It seems that the Feds have no problem pushing their will on the companies on Wall Street. Why dont they take the same approach with the different states? Because they are all in the hopper together.

Corruption is corruption. We are faced with an economic crisis because of reckless actions on the part of many. Now, we are seeing how the actions of the state representation was just as corrupt. Many lost their jobs on Wall Street. I think it is time some of these governors and state representatives of the states who are broke need to suffer some also. It is time to call for their immediate resignation.

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California Business

Anyone want to offer a guess why California is in so much difficulty financially?  Obviously, this state has been bad for business for a number of years.  This is evidenced by the mass exodus of businesses out of the state.  Of course, this situation is magnified when a recession hits.

Over regulation is one of the main reasons why industries are packing up and moving.  Here is an article that details how small businesses are affected by a government policy.  Once again, the leadership in California takes them one step closer to the edge.  No wonder the Governor of that state is knocking on the Feds door.  Sadly, they are broke also.

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Simple Solution: Stop Spending

California is leading the way in the economic doldrums that is confronting state governments. While our precious Federal government is spending money like they are printing it (wait...they do), the states are facing huge deficits. California, long known for it financial prudence in Sacramento, is heading the list of "states gone broke".

Governor Arnold Schwarzenegger is having to find a way to close a $42 billion budget gap. He is trying to tap into the lottery, shorten the school year, and raise tax in an effort to close this shortfall. (read it here) Of course, like most government driven ideas, this one does not solve the entire problem.

It baffles my mind that the government is immune from acting like private individuals or businesses. In both these instances, when there is a shortfall one is confronted with two options: stop spending or tap into existing credit. Those are the only two options when you having no reserves and less money coming in than is being spent. Naturally, if you operate using credit for too long, the lenders eventually shut you down. Overspending is what caused a lot of this economic mess.

So what does that leave? Simply, the answer to California's problem is to STOP SPENDING. Cease putting out so much money. There is nothing complicated about the matter. Social programs are wonderful when they can be afforded. However, in tough times, luxuries need to be eliminated. This is true whether you are an individual, a business, or a state government. If there is a shortfall of $42 billion, the solution is to cut out that same amount of money out of the budget.

I realize this solution is not an easy one to implement. Nevertheless, the circumstances confronting this country are dire. The average taxpayer cannot afford more taxation. For this reason, it is government's responsibility to cut wherever it can. If this means eliminating a lot of social services, then that is what must take place. Sometimes life is a real bitch. Trying to carry on the charade will only prolong the madness. Ultimately, we are going to feel all the pain that these decisions inflict. The only question is do we feel it now or later. Unfortunately, politicians try to prolong it until the next administration. That is why the hole keeps getting deeper.

So my New Year's message to all the Governors: STOP SPENDING!!!

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Insane Spending

How many of you live in California or New York? Of those who do not, how many of you like your tax dollars going to bail out these states? Presently, I live in Florida and do not like the idea of any of my money going to either of those two states. My feeling is "let them suffer".

It is no secret that those two states are some of the most liberal in the country. I am amazed that a Republican could get elected governor in New York (I dont consider the governor of California to be a Republican just because there is a "R" next to his name). Their legislatures repeatedly vote for more spending in spite of gorwing deficits. California has teetered on the edge of bankruptcy for years. Now, they need Federal money to bail them out. Screw them. Go hit up all the Hollywood types. Let Schwarzenegger make another Terminator movie and give the hundreds of millions in proceeds to the state. Their debt is not my problem.

We have become bailout happy. What ever happened to personal responsibility? I guess that is a dead animal in this world. For the last few years, states spend like drunken sailors (as did the Feds) and now they are suffering because revenues are down. Sorry, but it is time they got themselves out of the hole they dug. Let them cut services that they promised along the way. It seems that no politician is willing to admit he/she cannot afford something. The government is the only entity that does that. How about massive layoffs of government personnel? If private companies can lay off thousands to ensure their solvency, why can't these states follow suit?

Perhaps you noticed the governor's solution in New York. He proposed a budget that implemented 80 new taxes (New York is already one of the highest taxed states). This is a necessary move along with spending cuts to avert a $50 billion deficit in the future. What gets me about his deal is that in spite of this, spending still increases 1+%. The idea of "we cannot afford all this" is still not registering. If you running a serious deficit, it is time to seriously cut spending. I fail to see how increasing the total budget is going to avert future disaster. It is not.

One thing about the government, they always go contrary to fundamental principles. Only a government entity could expect to reduce its deficit by still incurring more expenses. That is like you expecting to pay off your credit cards while still senseless using them. Even with a second job, if you spend more than you take in, you will fall further behind. Yet, it seems this does not apply in this situation. Once again, let some of those rich New Yorkers who support these bozos pay for their mishaps. Why should I fund them? I didn't vote for them.

Someday soon the country will wake up. Here is a 411 for you: we are broke. If the nation was a corporation, we would be in Chapter 11 at a minimum (more likely Chapter 7). The fact that the printing press is running around the clock will come back to haunt us. Inflation is going to jump up to the levels of Jimmy Carter. However, this time I do not see us pulling out of it. We are in too deep and the entitlement mentality is too ingrained. Serious pain needs to be felt by this country.

It is coming. Get ready.

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