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California On Life Support

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http://www.cbsnews.com/stories/2009/05/30/...opStoryHeadline

Interesting comment in that California is such a work-engine that when California suffers many other US states also suffer economically.

24 billion in the red and they are doing drastic cutting of public sector services. Worrying, as the poor and sick, as usual in the US, are suffering.

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http://www.cbsnews.com/stories/2009/05/30/...opStoryHeadline

Interesting comment in that California is such a work-engine that when California suffers many other US states also suffer economically.

24 billion in the red and they are doing drastic cutting of public sector services. Worrying, as the poor and sick, as usual in the US, are suffering.

They'll probably keep all the nonsense liberal left services though, just cut the front-line ones that impact the poor.

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Governor Schwarzenegger Proposes Closing Nearly All of California's State Parks :o

"“It is hard to even know what to say, it is so outrageous,†said Michele Luna, executive director of the Stewards of the Redwoods and Coast, a non-profit that provides volunteers and conducts educational programs in partnership with the state. “It is ludicrous to take away places where people go for solace and recreation during hard economic times.â€

http://www.pressdemocrat.com/article/20090...rks-in-jeopardy

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Could this be an glimpse of things to come here. They can't increase taxes apparently borrowing is pretty impossible as well due to California's low bond rating, nor would would it be wise in the long term so they have to cut spending. $20~ Billion seems to be about 20% of the total budget.

Closing Parks, Pay cuts for all public staff, Cutting health services to the poor there is no good way of cutting that much money out of the budget. At least they seem prepared to accept they have to live within their tax income no matter how unpleasant it is.

How long until we have a similar budget problem.

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The state's economy is literally failing. I was reading even if the state fired every single state worker, the savings from their salary and benefits.. would not be enough to close the deficit.

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I've been saying this for a while...it's a pity they can't cut a bloated judiciary without a change in the law...how ironic.

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If they just released from prison all the non-violent people, especially the thousands in jail for possession of or selling of drugs, they could save a packet.

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With the vastly reduced house prices now in California there comes also far less property tax revenue for the State

Also the job losses mean less Local State income taxes too. This must add up to a lot of shortfall in California's tax revenues.

Thinking of that wouldn't it be nice if Local Government reduced UK Council taxes too, yeah not likely!

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If they just released from prison all the non-violent people, especially the thousands in jail for possession of or selling of drugs, they could save a packet.

The yanks are too stupid to realise that they will have to pay more taxes to maintain their living standards. Do they want to watch it all fall apart under them while they continue in their own little worlds. I think arnold is now having to make the cuts that will frighten the taxpayer into realising there is no choice but to pay for services.

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The state's economy is literally failing. I was reading even if the state fired every single state worker, the savings from their salary and benefits.. would not be enough to close the deficit.

Interesting. I was in Los Angeles in the week before Easter (doing some work as a historical consultant to a Hollywood studio), and while I got a sense that the economy was in trouble, it didn't seem as serious as failing. A lot of the small businesses that service the film and TV industry there (providing niche products and services, typically employing 5-20 people) are being squeezed. Salaries are down and some jobs are being cut, but people we telling me that at the moment, things don't seem even remotely as bad as when the film industry was last going through a really bad patch, in the early to mid '70s. Apparently businesses which supply high-end, luxury goods and services are really being murdered (e.g. luxury car dealerships, restaurants in which a meal for two costs $150+ etc.), as during the boom years the bulk of their customers were people who could only just afford that kind of lifestyle (or were buying it on credit), but can't anymore. But the $90 a night motel I stayed at was completely full the whole time, and there certainly didn't seem to be an atmosphere of crisis about the place.

Edited by The Ayatollah Bugheri

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If they just released from prison all the non-violent people, especially the thousands in jail for possession of or selling of drugs, they could save a packet.

Maybe a combination of tax and parole for those in prison would cut costs by a major amount

http://www.sdnn.com/sandiego/2009-05-28/ne...alifornia-maybe

The Department of Corrections has been following an upward trend of expenditures for the past five years. In 2008, the criminal justice system cost the state approximately $13 billion, nearly a $7 billion increase since 2003, according to the Legislative Analyst’s Office.

Gov. Schwarzenegger has proposed revisions in sentencing and parole guidelines to deal with prison overcrowding. While these revisions are being deliberated, the cost of incarceration for non-violent drug offenses has become an oft-debated area for reform. The legalization of marijuana is no longer an absurd suggestion made by extreme liberals or shaggy-haired hippies, but a legitimate option proposed and supported by a variety of politicians and economists in California.

A 2005 report by Jeffrey A. Miron, an economics professor at Harvard University, found that legalizing marijuana would save $7.7 billion per year in government expenditure on enforcement of prohibition, $5.3 billion of which would accrue to state and local governments.

http://news.google.com/news?q=legalize%20m...na%20california

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Interesting. I was in Los Angeles in the week before Easter (doing some work as a historical consultant to a Hollywood studio), and while I got a sense that the economy was in trouble, it didn't seem as serious as failing. A lot of the small businesses that service the film and TV industry there (providing niche products and services, typically employing 5-20 people) are being squeezed. Salaries are down and some jobs are being cut, but people we telling me that at the moment, things don't seem even remotely as bad as when the film industry was last going through a really bad patch, in the early to mid '70s. Apparently business which supply high-end, luxury goods and services are really being murdered (e.g. luxury car dealerships, restaurants in which a meal for two costs $150+ etc.), as during the boom years the bulk of their customers were people who could only just afford that kind of lifestyle (or were buying it on credit), but can't anymore. But the $90 a night motel I stayed at was completely full the whole time, and there certainly didn't seem to be an atmosphere of crisis about the place.

We do work in southern Ca. for San Diego (city). We just got paid in IOU's post dated for six months. You may not have noticed but there is a market for these now. It will be the new currency and loan sharking will be on the rise as well. The new reality for the unemployed (as in the 20'). At least Ca. has the weather so sleeping rough is less of a problem. My company is in the "real" world unfortunately, not Hollywood fantasyland which has never been the real economy and therefore shielded to a certain extent. Hey good luck to you personally but don't take that as being the norm. Remember Sacramento is the capital and things are very different up north. It's even grimmer up there.

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Interesting. I was in Los Angeles in the week before Easter (doing some work as a historical consultant to a Hollywood studio), and while I got a sense that the economy was in trouble, it didn't seem as serious as failing. A lot of the small businesses that service the film and TV industry there (providing niche products and services, typically employing 5-20 people) are being squeezed. Salaries are down and some jobs are being cut, but people we telling me that at the moment, things don't seem even remotely as bad as when the film industry was last going through a really bad patch, in the early to mid '70s. Apparently businesses which supply high-end, luxury goods and services are really being murdered (e.g. luxury car dealerships, restaurants in which a meal foHolywoor two costs $150+ etc.), as during the boom years the bulk of their customers were people who could only just afford that kind of lifestyle (or were buying it on credit), but can't anymore. But the $90 a night motel I stayed at was completely full the whole time, and there certainly didn't seem to be an atmosphere of crisis about the place.

I suggest you google Hollywood and job losses - the film industry is suffering big time, apparently only 3 actors in regular TV series have not had pay cuts - all the rest have had substantial pay cuts but then those still equate to about 80K an episode for a B list celeb which is basically either 5 or 10 days work.

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We do work in southern Ca. for San Diego (city). We just got paid in IOU's post dated for six months. You may not have noticed but there is a market for these now. It will be the new currency and loan sharking will be on the rise as well. The new reality for the unemployed (as in the 20'). At least Ca. has the weather so sleeping rough is less of a problem. My company is in the "real" world unfortunately, not Hollywood fantasyland which has never been the real economy and therefore shielded to a certain extent. Hey good luck to you personally but don't take that as being the norm. Remember Sacramento is the capital and things are very different up north. It's even grimmer up there.

How do those IOUs work then? Can you buy things with them? How does it work for a company outside of San Diego? Any idea when the IOU will become hard currency?

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I suggest you google Hollywood and job losses - the film industry is suffering big time, apparently only 3 actors in regular TV series have not had pay cuts - all the rest have had substantial pay cuts but then those still equate to about 80K an episode for a B list celeb which is basically either 5 or 10 days work.

I wasn't suggesting that it wasn't suffering, only that it wasn't totally failing. A-list actors' salaries are not not necessarily an indication of the health of the industry as a whole, either. They are only a tiny proportion of the total number of workers in the industry as a whole. The work I was doing was advising the writers and producers of a forthcoming drama set in 1920s London on ensuring that actual events and people referenced in the script were accurate, on possible locations (whether it would be feasible to use them or not, probable costs of location work versus studio/CGI reconstruction etc.), accuracy of costumes and so on and so forth. This is the second such project I've worked on, and money was clearly a lot tighter than with the first. Some people at the props and costume companies to whom a lot of the work has been subcontracted told me that they'd lost staff and that budgets have been cut. They're basically being told to supply a similar standard of product as was the case 2-3 years ago but for less money.

I wasn't trying to suggest that it wasn't suffering, only that it wasn't in total meltdown either.

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Could this be an glimpse of things to come here. They can't increase taxes apparently borrowing is pretty impossible as well due to California's low bond rating, nor would would it be wise in the long term so they have to cut spending. $20~ Billion seems to be about 20% of the total budget.

Closing Parks, Pay cuts for all public staff, Cutting health services to the poor there is no good way of cutting that much money out of the budget. At least they seem prepared to accept they have to live within their tax income no matter how unpleasant it is.

How long until we have a similar budget problem.

At the start of this disaxter I worked on the assumption that what happens in the US will happen here after 12-18 months.

Not subtle, but proved fairly accurate on house price trends. And then I liked to compare the UK to California, Spain to Florida, in terms of bubble prices, overall debt, size of public sector, source of income. But the big difference for the UK is currency depreciation - I reckon it allows a less severe correction, but am worried the decline will be baked in for a looong time.

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Interesting. I was in Los Angeles in the week before Easter (doing some work as a historical consultant to a Hollywood studio), and while I got a sense that the economy was in trouble, it didn't seem as serious as failing. A lot of the small businesses that service the film and TV industry there (providing niche products and services, typically employing 5-20 people) are being squeezed. Salaries are down and some jobs are being cut, but people we telling me that at the moment, things don't seem even remotely as bad as when the film industry was last going through a really bad patch, in the early to mid '70s. Apparently businesses which supply high-end, luxury goods and services are really being murdered (e.g. luxury car dealerships, restaurants in which a meal for two costs $150+ etc.), as during the boom years the bulk of their customers were people who could only just afford that kind of lifestyle (or were buying it on credit), but can't anymore. But the $90 a night motel I stayed at was completely full the whole time, and there certainly didn't seem to be an atmosphere of crisis about the place.

From what I understand the movie industry is doing quite well. They seem to have many big selling new movies.

I agree with you about the free market adjustment. As people make less money they might go out for dinner and spend 25$.. instead of 200$ with wine and at an expensive place. Rents and house prices adjust to the new salary levels. Salaries themselves adjust to the new reality. Life goes on, and hopefully as technology keeps getting better the standard of living rises, even though the nominal price levels might be different.

I think the problem our societies face is the debt is in nominal terms and it doesn't go away. If someone owes £500,000 and their salary falls by 50% because there was mass deflation.. then they still owe £500,000. Likewise it seems the state's liabilities like pensions are set. I read California's tax receipts are down 38% in April 2009, from April 2008.

Overall I hope what you saw keeps up, the economy simply adjusting.. instead of meltdown and credit markets freezing type of deal.

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when O'barma was in the election race, we had 24/7 coverage.

Yet we see nothing reported on these types of stories in our independant non-VI media eh. <_<

Anything on Spain's economic collapse ? NO

From a general public pov it the collapse will appear to happen overnight.

edited - in other main breaking news today, Susan Boyle (the Britains got talent singer) has been admitted to Priory rehab clinic.

Edited by grumpy-old-man-returns

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