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California is about to go bankrupt, and let's examine why:
- Massive government spending and wasteful expenditures, often perpetuated by a notoriously hard-left legislature.
- As an extension of 1, you have a huge proportion of the workforce in government jobs to support these massive wasteful spending programs. This workforce is overpaid, have far above market rate benefits packages, and cannot be fired -- as a result this workforce has extremely low productivity because why be productive when you can't be fired. The positions distort the market for jobs in California and drastically harm the alternate private sector economy. You're also spending enormous amounts of money for what is comparatively a relatively miniscule output.
- Broad welfare programs that encourage many not to work, or if they do, they again distort market realities when it comes to wages. Why work hard at a $25,000/year job when you can work in a $10,000 a year job with welfare subsidies.
- Points 1-3 require very heavy taxation all around to support these outrageous policies. However California is finding out that companies don't want to pay huge corporate tax rates so they set up shop elsewhere, resulting in California loosing ALL of that revenue.
- California is in the top 15% of states in terms of state and local tax burden, especially on upper income earners -- ironically, the people in the economy who have the capacity to innovate and create businesses and jobs. People either cannot innovate and create businesses because of disincentive from the tax and regulatory burden, or they're creating jobs elsewhere where there is less of a tax and regulatory burden. And by regulatory I mean massive regulations that are needless bureaucratic landmines that just sit on the books so they give some bureaucratic idiots something to do -- or not do.
- California has one of the most rabid and powerful union environments in the United States, disincentivizing businesses from setting up shop where they cannot operate their own businesses in the most productive ways they see fit. Ask 10% of the unemployed in California whether they would want powerful unions in California or would rather have an anti-union low-tax haven where companies would like to set up shop and offer them jobs.
Moving away from this liberal landmine called California, let's look at the Republican South and the Conservative Mountain States. These "red" pro-growth states are on the up in this downturn, the bright spots amidst the liberal carcasses that surround them. They are low-tax, anti-union, small government havens, and people there are just happy to have jobs (relative to California, at least). Their economies are sustaining the best during this downturn. Let's also look at America in the global macrocosm -- it has been the most economically and socially free major country in the US, and coincidentally, has grown to have the highest standard of living amongst all its classes in the world, compared to major European social-welfare states who enjoy a standard of living about one-third that of the US.
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So here we are, finally realizing that liberal tax and spend anti-growth heavy-welfare large-government paradigms aren't sustainable in a downturn economy and cause a downturn economy. And I thought "sustainability" was a liberal keyword.
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Meanwhile, Barack Obama is seeking to ramrod more policies and programs almost identicial to those from 1-6 down our throat during an economic crisis. Much like industry and entrepreneurs
are fleeing California because their businesses cannot survive in such a greedy government environment (or they don't even want to try), industry and entrepreneurs will flee the United States for more sustainable places to do business. Ask Switzerland how its employment rate is doing after business is flocking there due to its low corporate tax rates? And what kind of business would want to set up shop in the US, with the second highest corporate tax rate in the world, and employ you? Do you want big inefficient government with heavy taxes, or do you want a job? We've already gotten far past a point where people in the private sector can no longer subsidize a massive uninnovative unproductive overpaid federal/state government. And
Barack Obama wants to grow government? It cannot happen. We are already running up debt and deficits out the wazoo, and federal expansion is something we cannot afford -- we will endure massive inflation, go bankrupt, and our currency will become worthless. It will be an economic decline much worse than Japan and even rivaling the joke that is "please cry for my union" Argentina (look up their economic histories after massive federalization).
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Liberals love to throw out these idiotic stereotypes of greedy fatcats and profits out the wazoo, but the truth is that most American businesses, from the very smallest to the very largest, have extremely small profit margins. Even the oil companies during the crude spike only posted a limited profit margin of about 8%. And a lot of American businesses are in the red. And more than half of Americans are invested in the stock market, so the success of major corporations is tied into the wealth of the common middle class American.
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In regards to charges that part of this crisis was do to lack of "regulatory" measures, yes, that is partly true. However, conservatives do encourage regulatory measures that ensure that companies hold up their end of the bargain with consumers in the marketplace since the free market works best when both sides of the company-consumer equation are equally well informed and free to make the best decision for themselves. And liberals are equally responsible for this banking crisis. Clinton and his cronies insisted to the Fed that everyone should be able to own a home, and therefore eased the flow of money into risky loans (to risky people). And Greenspan idiotically refused to reel back low rates and easy money when economically upward conditions did not warrant this easy credit.
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In closing, the banking crisis and economic downswing is not the economic emergency -- Barack Obama's massive budget, increasing the national debt more than all of our former Presidents combined and increasing federal government and regulation to a massively unsustainable scale -- is the real emergency. I'd say go to Tea Parties, but it isn't enough. Barack Obama and his unprofessional cronies are ridiculing you while they enjoy your White House. You need to militantly mobilize for 2010 and 2012. America is at stake.
