Sense on Cents

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: (more…)