Sunday, July 27, 2008

Schwarzenegger Needs To Face Reality: California Is Insolvent

I intended to write a piece about California losing jobs, due to increasing taxes and investigate other causes, based on Dennis Prager's hour 2 on 7/17/08. But we are leaving on vacation, so I just have a couple of links: Mish's Global Economic Trend Analysis Schwarzenegger Needs To Face Reality: California Is Insolvent Yesterday, in Taxpayers Can Bear No More, we discussed the record public debt problem in the UK. Chancellor Alistair Darling made it "clear that he thought that the only politically viable option was to increase borrowing, rather than to raise taxation." In the US, states are facing similar budget dilemmas. New Jersey, whose median household income of $64,470 is second only to Maryland, is one of 29 states that ran short of revenue to balance this year's budget, up from three in 2006, the Center on Budget and Policy Priorities in Washington found. Lawmakers across the country, who previously sought to trim debt and cut taxes, are instead increasing borrowing as the slowest economy since 2001 erodes consumer spending and home values. California Governor Arnold Schwarzenegger is looking to bridge a $17 billion budget gap by borrowing against future lottery profits. Illinois Governor Rod Blagojevich wants to issue bonds to plug a shortfall in pension-plan funding and cut spending on health care and education. Corzine plans to borrow for school construction, and officials in Arizona may too. California could lose 370,000 jobs if paid sick leave passes - Jan Norman on Small Business - June 24th, 2008, 6:00 pm · posted by Jan Norman California businesses will shed 370,000 jobs over the next year and pay $63.9 billion in costs and lost sales if the legislature approves mandatory paid sick leave for all workers, according to a detailed analysis released today by the National Federation of Independent Business Research Foundation. The bill, labeled the California Healthy Workplaces Act by author Assemblywoman Fiona Ma, D-San Francisco, would require every business with even one employee to give paid sick leave. Part-time workers would also qualify. The bill passed the Assembly May 28 and is currently in the state Senate Labor and Industrial Relatixons Committee. Approximately 40% of California workers, mostly part-timers, don’t get paid sick leave, according to Ma. She says the lack of paid sick leave is a public health concern that hurts children.

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