California’s debt nearly twice as bad as estimated
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How bad was your weekend? Safe to say it wasn’t as bad as California’s.
From the Los Angeles Times:
California’s projected budget deficit has ballooned to $16 billion, much larger than the $9.2 billion estimated in January, Gov. Jerry Brown said, and he warned of more painful spending cuts.
“We will have to go much further, and make cuts far greater, than I asked for at the beginning of the year,” Brown said in a video posted Saturday on YouTube. He plans to detail his revised spending plan in the Capitol on Monday.
The deficits have worsened due to a couple factors. First, the state hasn’t received the amount of tax revenue it expected (not surprising, considering the tax climate for businesses there) and second, the Democratically-controlled state legislature rejected many of the suggested cuts that Gov. Brown proposed.
Huge deficits are a reality many on the political left deny or say are exaggerated. Mitchell told me he suspects in the near future that Democratic Party governors are better suited to curb spending because whenever fiscally conservative governors call for serious spending cuts they are immediately attacked from the left:
In other words, if a Democrat — especially one initially supported by public sector unions — comes out and essentially says, “we have to make changes,” only then will the economic cold water get splashed in the face. It’s similar to the old political adage that “only Nixon could go to China.”
But changes are coming. Unlike the federal government, state governments cannot simply print more money to try to paper over the problem (and even that doesn’t work because it leads to inflation). And no amount of political rhetoric can change the demographic reality of an aging population that is significantly larger than the population behind it.
Oh, and Los Angeles taxpayers also received news this weekend that the cost of the city allowing and then eventually evicting Occupy Los Angeles protesters cost $4.7 million – some $2 million more than estimated.
Click here to read the entire LA Times story.