07/13/09 Tampa Bay, Florida
California has so degraded itself into a laughably Leftist socialist/commie-
think nightmare that they have, as all socialist/commie-think countries always
do, finally bankrupted itself. As Margaret Thatcher, erstwhile prime minister of
England, once said, “The problem with socialism is that you eventually run out
of other people’s money.” Hahaha! Exactly!
And now California has run out of money! Exactly!
Now, to demonstrate their complete worthlessness as thinking, rational beings,
California has decided that it will not cut expenses overmuch, but will pay
for things not with money, but with IOUs! Hahaha! IOUs! Hahahaha!
There is Something Beyond Surreal (SMS) about all this, and it’s that very
farcical stupidity that explains why hyperventilating conspiracy theorists like
me come up with the weird conspiracy theories that we do; it is just too
damned weird to be real!
I mean, the fiat currency of the USA has been so abused by over-issuance that
it has lost about 96% of its purchasing power since the loathsome Federal
Reserve took over in 1913, and is now about to be reprised by California
issuing another paper money! Hahaha! Paper money everywhere! The state
with two fiat currencies! Hahaha!
This may have something to do with how California has seen a precipitous
drop in tax revenues, which in turn may have something to do with the Labor
Department releasing its Metropolitan Area Employment report which shows
that “In May, 112 metropolitan areas reported jobless rates of at least 10.0
percent,” which I admit does not have much to do with California until we get
to the part where El Centro, Calif., “recorded the highest unemployment rate,
26.8 percent,” and “Among the 15 areas with job-less rates of at least 15.0
percent, 7 were located in California.”
This is, as Margaret Thatcher said, because Californians have run out of money
to support everyone who ever walked up with their hand out looking for a free
lunch, and the wealthy people in California are leaving the state to keep from
having everything they have taxed away. Bummer!
Actually, California is a beautiful place unfortunately populated by Leftist
idiots, and as such is but a pale microcosm of the Whole Freaking Country
(WFC), and as a result, as Bill Bonner here at The Daily Reckoning said,
“America’s position relative to the rest of the world is weak and in decline.
She is not a creditor; she is a debtor. She is not a low-cost competitor; she is a
high-cost competitor. She no longer has a free and flexible economy; she has
one freighted with central planners, regulators and busybodies.”
And California is not the only one hurting, as Byron King of Outstanding
Investments writes that everybody has taken a whack to the wallet, as “There’s
no disputing the extraordinary shock to household wealth in the US. From mid-
2007 to March 2009, according to the Federal Reserve, household net worth
plunged $14 trillion, or 21.5%.”
A fifth! A fifth of everything we thought we had is gone!
In fact, most of the losses were recent, as “Just during the second half of 2008,
household net worth plummeted nearly $8 trillion – with an eye-popping $4.9
trillion dip in the fourth quarter.”
Wow! No wonder people are being laid off! No wonder spending is down! No
wonder we are screwed!
Until next time,
The Mogambo Guru
for The Daily Reckoning
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“Until next time”????
Where’s my wheeeeeeeeee buy gold & silver?
Look for socialist pinheads to bail out Kalifornia…then every other leftist free spending state.
Would someone please explain to me what the difference between a bond and an IOU is?
Yes, a Bond is a trained secret service agent, also refered to as Bond, James Bond. IOU is what i say to my friends when they pay the bills at the bar, obviously meaning they’ll never get that money back. It’s a little technical explanation, but you get the picture right?
Oh, and Bond has license to kill, while too many IOUs will GET you killed, specially if you hang out with the kind of friends I do.
Mogambo Guru: This one on California is really good. You made a fully grown man laugh with croc tears reading it. And that’s something.
I suppose the people in California are responsible for the absurdly over-bloated military budget; the criminal wars being waged by this country; the exploding money/banking mess brought on by the “margaret thatcher” types during the past 20 years activating the largest “greed” syndrome ever unleashed……..
I usually read your remarks with tongue in cheek…but, living in the Sierras in one of the most pristine areas of the world…which incidentally attracts millions of world class tourists annually……
A governor does not make a state…the people do…Your characterization of “…people with their hands out” is pitifull and bad writing to say the least…..
You are squandering your reputation (maybe you never had one) of informative writing….
sierra
Why can’t the US Fed bail out (lend money to) insolvent states like it lends to insolvent banks?….
guess the states are too big a credit risk.
What happened to my previous comment? Somebody does not like truth about right wing idiots who destroyed US, UK, ….
Right-wing, left-wing, it has almost no bearing anymore. Clinton took all of the credit for the dot-com boom, but not the dot-com bust and revoked the Glass-Stegall act. Ol’ W ended up in a war which cost much more money, time, and lives than we were led to believe. Obama is now spending on more pet projects than PetSmart itself.
Yes, Californias policies do reek a bit of socialist planning and spending, but they could not have anticipated the gross decline in employment and tax receipts over the past year.
The problem, of course, is that neither California or many other states bothered to save for a rainy day. When receipts increased, they added all kinds of pet programs, state employment positions, projects, etc based on then-current receipts.
The decisions being made in California right now will be followed by several other states indeed… just watch…
I recall when californians wanted Spanish
as their top language. Yes, I do wonder
how many people have their hands out??
I read this today with all the follow-up commentary,not with gloat, but admittedly with some amusement. Compare the state governments of California and Texas.
Mogambo says it all about CA. Re Texas: the Wall Street Journal recently reported that last year more jobs were created in Texas than the other 49 states combined. I also just saw a report that Texas Governor Perry recently stated that Texas would put $9 billion into its rainy day fund. The real difference between the state governmets: liberal/idiot voters and hard workers with lots of common sense, which is obviously uncommon in CA.
Can you decide where each category of voter resides?
I neglected to add that Texas does not even have a state income tax.
I have to agree with Sierra’s sentiment. California is I believe the largest contributor to Federal coffers. In the financial cycle it the very wealth of California residents (liberally taxed by the Federal Government) that has allowed Claifornians to adopt a role of social responsibility and humanity.
The real story of California is that they can not rely on the Federal Government who has seen fit to perpetuate a ‘rotten to the core’ system of banking that is possibly the greatest contributor to income and social polarization in the United States.
Citing Margaret Thatcher as a politician with economic qualification to comment on socialism is the same as accepting Genghis Khans opinion on Child Care Centers in a post soviet society. Get real! Margaret Thatcher is responsible for the wave of avarice in the second wave of the culture of greed that overtaken Britain. A collapse in basic services, specifically in transport, due to her privatization programs has left Britain in a worse position than California. Would happily swap Gilts for California IOUs and I would buy California dollars over Washington dollars anyday.