The Economic Collapse
Oct 25, 2010
Back in the 1960s and 1970s, there was a seemingly endless parade of pop songs about how great life was in California, and millions of young Americans dreamed of moving to the land of sandy beaches and golden sunshine. But now all of that has changed. Today, millions of Californians are dreaming about leaving the state for good. The truth is that California is broke. The economy of the state is in shambles. The official unemployment rate has been sitting above 12 percent for an extended period of time, and poverty is everywhere. For many Californians today, there are very few reasons to stay in the state but a whole lot of reasons to leave: falling housing prices, rising crime, budget cuts, rampant illegal immigration, horrific traffic, some of the most brutal tax rates in the nation, increasing gang violence and the ever present threat of wildfires, mudslides and natural disasters. The truth is that it is easy to understand why there are now more Americans moving out of California each year than there are Americans moving into the state. California has become a complete and total disaster zone in more ways than one, and an increasing number of Californians are deciding that enough is enough and they are getting out for good.
Sadly, the state of California is facing such a wide array of social, economic, and political problems that it is hard to even document them all. It is really one huge gigantic mess at this point.
Just consider the following facts about what life is like in the state of California today….
#1 Unemployment in the state of California was 12.4% in September – one of the highest rates in the nation.
#2 The number of people unemployed in the state of California is approximately equivalent to the populations of Nevada, New Hampshire and Vermont combined.
#3 Not even state government jobs are safe in California these days. Last month, government agencies in California slashed a total of 37,300 jobs.
#4 California has the third highest state income tax in the nation: a 9.55% tax bracket at $47,055 and a 10.55% bracket at $1,000,000.
#5 California has the highest state sales tax rate in the nation by far at 8.25%. Indiana has the next highest at 7%.
#6 Residents of California pay the highest gasoline taxes (over 67 cents per gallon) in the United States.
#7 Even with all of the taxes, the budget deficit for the California state government for the current year is approximately 19 billion dollars.
#8 According to an article in the Wall Street Journal, California’s unfunded pension liability is estimated to be somewhere between $120 billion and $500 billion.
#9 20 percent of the residents of Los Angeles County are now receiving public aid.
#10 Budget cuts are making life very difficult in many California cities. For example, Oakland, California Police Chief Anthony Batts says that due to severe budget cuts there are a number of crimes that his department will simply not be able to respond to any longer. The crimes that the Oakland police will no longer be responding to include grand theft, burglary, car wrecks, identity theft and vandalism.
Things have gotten so bad in Stockton, California that the police union put up a billboard with the following message: “Welcome to the 2nd most dangerous city in California. Stop laying off cops.”
#11 According to one survey, approximately 1 in 4 Californians under the age of 65 had absolutely no health insurance last year.
#12 California’s poverty rate soared to 15.3 percent in 2009, which was the highest in 11 years.
#13 California’s overstretched health care system is also on the verge of collapse. Dozens of California hospitals and emergency rooms have shut down over the last decade because they could not afford to stay open after being endlessly swamped by illegal immigrants and poor Californians who were simply not able to pay for the services they were receiving. As a result, the remainder of the health care system in the state of California is now beyond overloaded. This had led to brutally long waits, diverted ambulances and even unnecessary patient deaths.
#14 California home builders began construction on 1,811 homes during the month of August, which was down 77% from August 2006.
#15 Earlier this year, it was reported that in the area around Sacramento, California there was one closed business for every six that were still open.
#16 The “lawsuit climate” in California is ranked number 46 out of all 50 states.
#17 Residents of California pay some of the highest electricity prices in the entire nation.
#18 Over 20 percent of California homeowners are now underwater on their mortgages.
#19 Large tent cities have been springing up all over the state of California. Just check out the following shocking video news report….
So why doesn’t the state government of California just fix many of these problems? Well, the truth is that it simply cannot. The state government is flat broke. Earlier this year, Bob Herbert of the New York Times described California’s massive budget problems this way….
California has cut billions of dollars from its education system, including its renowned network of public colleges and universities. Many thousands of teachers have been let go. Budget officials travel the state with a glazed look in their eyes, having tried everything they can think of to balance the state budget. And still the deficits persist.
So is there any hope that all this can be turned around?
Is there any hope that the economy of California will recover?
Or will California continue to experience a rapid decline?
This article was posted: Monday, October 25, 2010 at 3:42 am