California, Here We Come?

The budget stalemate will soon become a bore to most Vermonters.  After all, people have lives to get on with and can be forgiven for feeling like this is essentially just another political fight over who gets the grease.  Every year, the governor and the legislature accuse each other of trying mightily to ruin the state and, in the end, they cut a deal, shake hands, and smile for the cameras.  And life goes on.  No reason this year should be any different.  Vermont, many voters think, will muddle through, in spite of everything, including its political leadership.

And perhaps it will. 

Nobody knows with certainty when what has always worked before will stop working.  Or, for that matter, if it will.  Housing prices, we were recently told, would never stop rising, Fanny Mae was in fine shape.  And the geniuses of finance had developed a mathematical formula that they used on Wall Street to maximize leverage and eliminate risk.  Odd, but we don’t hear much about that one anymore.

So it wouldn’t do to make any prediction with too much confidence and serenity.  These are unusual – and dangerous – times.  Still … it is always good to study what is going on around you and try to learn what you can from the experience of others.

Vermont, then, might want to look at what is going on in California.  They aren’t bored out there.  Citizens of the Golden State are afraid and angry and looking down the barrel of bankruptcy.  They are, in Megan McCardle’s phrase, “… completely, totally, irreparably hosed.”

They didn’t get there overnight and there is still a lot of argument over exactly how they did come to their present, diminished and demoralized state.  But fair to say, nobody is ruling out excessive spending and high taxation.  California has lots of well-paid government employees … where else can a prison guard knock down six figures, with overtime.  Teachers are paid 25% more than the national average.  In good years, the state spends every dime it collects in taxation plus a little extra that it borrows.  Faced with a huge budget deficit, California’s political class went to the citizens – in the form of several referenda – and asked if it could please tax a little more and borrow a little more.  Provided, of course, that this time it would hold down spending.  Promise.

The voters said no.  Conclusively.  And, now, the state faces some form of bankruptcy.  California.  Home to Silicon Valley and Hollywood.  The state where every trend gets its start. (Which sounds ominous under these circumstances.)  California, where the sun always shines and you breathe optimism with the air.

Broke.

What happens next is anyone’s guess.  But what has already happened is undeniable.  California, richest of all the American states – richer than all but a few countries –  has ruined its economy through its own profligacy.

We are hearing, inevitably, that California is “too big to fail” and that the Feds will have to bail the state out somehow.  But the old too-big dodge has to run up against reality some day.  (Maybe California should be three smaller, more rational states.)  And sooner or later we will be hearing about enterprises that are “too small to save.”  Which would seem to describe Vermont where some legislators are confident of another federal stimulus package that will fill the hole (some $200 million, give or take) in the 2011 and 2012 budgets. 

Vermont isn’t California.  But then, California isn’t California any longer, either.   Excessive taxation and profligate spending have driven California to ruin. 

No reason we couldn’t be next.

Comments

[Jerry Coleman]

To Norm: This time is much different. The Obama Congress has gone off the deep end and VT Democrats have decided to follow them. Its time to draw a line in the sand and stand for something while you still can.!!!

[Jack Harding]

I have the pleasure of living in both CA and VT. Both are beautiful, life-style minded places with one other thing in common....legislatures that have neither the skill nor inclination to balance a budget.

Add to this a hefty dose of social engineering and you get....drum role....utopia? no, bankruptcy.

I am proud my fellow Californians said "Enough!". Will my fellow Vermonters have the same voice? the same outrage? Let's see.

CA may have waited too long. VT has a chance to put on the breaks. History will favor the leaders that traded prudence for ideology but, by then, the current legislators will not be running for reelection.

[Ed G. Mann]

When the cuts come in CA, they will come in the wrong places. All the beloved socially engineered programs will be left standing while safety and education get the cuts to "punish" the voters for having such nerve.

My nieces, both successful entrepreneurs, are relocating to Texas in August. Why it took so long, I don't know.

Vermont will get this same emigration of earners, the young and the job creators.

What is left in Vermont is the tax eaters, the living dead.

[Brattleboro_conservative]

California still has sensible voters within it's borders who outnumber the other folks or none of these ballot initiatives would ever have passed. Unfortunately, that would not be the case in this state as the ordinary working people have resigned themselves to the Government as it exists and have stopped fighting. Years of putting up with a slowly increasing majority of lefties have left people here burned out. The only answer is to watch Vermont take a nose dive over the cliff and try to pick up the pieces afterward. It won't be pretty.

Remember on the day of the tea party in Montpelier, the Freeps went out of it's way to publish a story about people showing up in the capital whining about increasing taxes to keep their precious social programs afloat all the while ignoring (or doing their left-wing best to ignore) the tea party going outside the capital. Until you get rid of the left-wing leeches in this state, nothing will change.

[Dennis Lukas]

Native Vermonters,will not voice much opposition as they have learned how to avoid the taxes.They farm, thereby they get subsidies, they work in jobs for cash and declare little income, their properties are in land use.Native Vermonters will be here long after the state goes bankrupt.Business people are leaving the state quietly, leaving only the leaches and the nature lovers.As a true socialist state, lets see how long the poor,teachers, and state workers can survive without business income.By the looks of it, state revenue will be down 75 million in 2009.What will all the socialists retire on when there is no money to pay state pensions?Hopefully Washington will throw you some crumbs for supporting its sweeping changes, 600,000 people a month are losing their jobs.In the new USSA there will be no more wall street pension funds, just good old social security, is this not what the Vermont legislators seek? Every one must be equal.If you notice, only one hedge fund(teachers retirement pensions) in Illinois is raising opposition against the auto industry bankruptcy, as they will lose 90% of their pension fund.If you hate development and business growth, then money must surely grow on trees in beautiful Vermont.

[Guy Page]

California also didn't believe they would ever have an electricity supply crisis, so they closed nuclear power plants willy-nilly and in other ways just refused to plan. A year of brownouts later.....the problem is finally recognized.