California descends into the abyss

If only the state of California had a printing press, it could solve its current budget problems as easily as the Federal Government does...

Maybe that's the real solution to the fiscal imbalances here in the Golden State, imbalances that just rose from about $15 billion to about $21 billion (down from $42 billion earlier in the year) after voters nixed five of six budget measures yesterday.

The only initiative that passed - by a whopping 74 percent to 26 percent margin - was aimed at penalizing lawmakers during years when the state runs a deficit by prohibiting pay raises for said lawmakers.

There's a good deal of irony in the fact that this measure was on the ballot at all - as if elected officials felt they had to show some level of responsibility for having created such a mess, along with, perhaps, a little humility.

There's even more irony in the election results that, despite a ten-to-one advantage in campaign spending, saw all measures that would either raise taxes or use sleight of hand to make ends meet fail so miserably by comparison - it wasn't even close.
You can almost imagine the discussion when adding Proposition 1F to the list - about lawmakers being held accountable for their actions and being more responsible.

Little was it known at the time what an easy platform was being provided for voters to voice their displeasure with the crew in Sacramento.

Granted, the system as currently constructed is unworkable and it needs to be fixed - requiring a two-thirds vote for the passage of a budget when combined with the ballot initiative process sets anyone up for failure.

But, the state just spends too damn much money.

The only way the current level of spending can be made to function within the current system is if you have massive asset bubbles that generate massive tax revenue bubbles that dupe elected officials into thinking a "new normal" has been achieved.

With no hope of either a technology bubble or a housing bubble reinflating anytime soon, we're clearly headed back to the "old normal".

So, elected officials now huddle in the state capitol, pondering thousands of layoffs for the state's 235,000 workers which, clearly, is way too many to begin with. The education and healthcare budgets look ready to be slashed by billions of dollars, local government coffers may be raided, and tens of thousands of inmates may be booted from state prisons.

This should be interesting to watch - I'm glad we we'll be able to watch it from a distance.