Last week debt-weary congressional Democrats pulled an aid package targeted at debt-ridden states, including California.
The action will cost California big. Just add another $2 billion to the current $20 billion crater. An increase of 10%.
Politicians are becoming increasingly fearful of an angry electorate now fully aware of increasing deficits. A result of out of control pork-barrel spending by both parties.
America is swimming in a pool of debt. Federal, State and Local governments owe trillions of dollars in debt that will likely never be repaid. At some point insolvency will likely occur and the resulting shock wave will affect everyone.
The American public is swimming in debt linked to high credit card rate and bad mortgage products. The public has a whole possesses little buying power, known as discretionary income. There is likely to be even less going forward.
It will get worse.
The approaching pull back in government spending will lead to an acceleration in layoffs and unemployment rate, and more importantly the under-employment rate. The under-employment rate includes all persons who collect benefits, are off-benefits, working part-time but seeking full-time employment, and those who have ceased looking for a job.
In the Inland Empire this number is over 20%.
That’s right! One in every five people who want a job are out of work.
With California Democrats wanting to tax and spend more, and republicans nearly powerless to stop it, expect more gridlock and pain. Few in Sacramento can see what’s about to happen.
Governor Arnold Schwarzenegger just wants out of town.
Spend more still seems to be the mantra for the majority who clearly believe that giveaways secure then popularity and reelection.
Taxing the daylights out of every person and business in the state is no longer an answer.