Should Uncle Sam Bailout California?
Posted by Larry Doyle on January 7, 2010 8:07 AM |
Should 49 states bail out one? Should the American public be compelled to cover the fiscal disaster of our largest state? Will America ever face reality?
The ticking time bomb that is the fiscal disaster of the state of California is making its way to Washington. As reported in yesterday’s Wall Street Journal, the Governator Arnold Schwarzenegger Seeks U.S. Funds. If Uncle Sam bails out California, then who is next?
Not surprisingly, the general media is not giving this story even close to the attention it deserves. I wrote extensively on this ticking time bomb last spring and summer. Tick…tick…tick. The fuse is running short.
Let’s quickly review some general statistics about the state on our Left Coast (in more ways than one). As I highlighted last May in writing “As California’s Economy Goes, So Goes the Country,” California has:
– 8 of the 50 largest cities
– population of approximately 37 million people (that we know of), a full 12% of our national population
– an economy similar in size to Italy, ranking it as one of the top 10 in the world (I have seen rankings of 8th and 9th)
– California’s economic output represents 13% of our national GDP!!
– an unemployment rate north of 11% compared to the national average of 8.9%. With a high unemployment rate amongst illegal immigrants, it is not a stretch that California’s unemployment rate is approaching 15% and its underemployment rate is greater than 20%!! (LD’s edit, the current rate is 12.3%).
What is Schwarzenegger’s case? The WSJ reports:
“The federal government is part of our budget problem,” the Republican governor said in his annual State of the State address, reiterating a longstanding complaint that California sends far more money to Washington than it receives in return. Mr. Schwarzenegger also said federally mandated spending of state money has further strained California’s coffers.
“We no longer can ignore what is owed to us,” he said, adding that Washington owes the state billions of dollars for various programs. He criticized elements of congressional proposals to overhaul the health-care system, saying California could be saddled with billions of dollars of additional annual spending.
What state couldn’t or wouldn’t make the same assessment? California is a fiscal disaster as a result of massive mismanagement across a wide array of programs for a number of years. Are the hard working, fiscally prudent residents of other states supposed to bail out the wayward left coast?
If Washington craters to California, then who is next? Each and every state will be lining up for a handout. Who bails out Uncle Sam? The People’s Republic of China? What do you think that will cost?
When will this madness end?
How do you feel about bailing out California? Please let me know what state you are from and whether you support providing bailout money for California.
I’ll start. I’m from Connecticut. No way!!