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Wednesday, May 27, 2009

"All the Gold in California"

“All the gold in California,” Larry Gatlin and his brothers sang, “is in a bank in the middle of Beverly Hills in somebody else’s name.” Who would have thought that Mr. Gatlin was a prophet? Just about everything inCalifornia these days is in “somebody else’s name.”

Facing an economic catastrophe of unprecedented proportions, on May 19, by an average of 65%, California’s voters wisely rejected a slate of propositions that would have raised taxes. These tax increases were the liberals’ answer to a $21 billion budget deficit that the state faces in the next fiscal year beginning July 1.

Make no mistake about it, California, just like the federal government, is firmly in the control of liberals. In a column a few weeks ago, I referenced a 2002 article by Harold Meyerson from the liberal magazine American Prospect. Given the current turn of events in the “Golden State,” that reference deserves another look. If you recall, Meyerson hailed California, since it was firmly in control of the Democrats, as a “laboratory” for Democratic policies. In California, Meyerson said, “the next New Deal is in tryouts.”

As I said a few weeks ago, which is now even more obvious, the “New Deal” was no deal at all. Even the New York Times recently lamented the “severely dysfunctional politics” under which Californians suffer. I wonder if the California voters are ready for a little “change.”

California, of course, is not alone in its dire deficit dilemma. As the Times points out, “cumulative state deficits over the next two years are estimated at $350 billion to $370 billion.” However, California alone has an economy that is one of the world’s largest. This has many people asking that all too familiar question these days: Is California too big to fail?

California, along with the other states, has already received billions from Obama’s federal “stimulus” program. If California gets bailed out further, what is to stop the other states from again coming to the federal government with their hands out? Of course, this should more aptly be called a taxpayer bailout, because that is exactly who will pay for it (again!).

It’s not as if Californians aren’t taxed enough. According to the Tax Foundation, in 2008 California ranked 6th highest in the U.S. in state-local tax burdens. They’ve been in the top ten (as high as second) for each of the last fourteen years. Interestingly, but not surprisingly, the top ten for state-local tax burdens last year: 
10.) Rhode Island 9.) Wisconsin 8.) Vermont 7.) Ohio 6.) California 5.) Hawaii 4.) Maryland 
3.) Connecticut  2.) New York 1.) New Jersey.

Notice how “blue” these states are. (All went for Obama last election.) There is a saying across politics which declares that, “California is where the future happens first.” It will be intriguing to see if the financial woes occurring in California will play out next in these other rather liberal states.

The ten lowest last year for state-local tax burdens: 41.) Arizona 42.) Louisiana 43.) Texas 44.) Tennessee 45.) South Dakota 46.) New Hampshire 47.) Florida 48.) Wyoming 49.) Nevada 50.) Alaska. Notice the “redness” of these states. Seven out of ten of these went for McCain in the last election.

Also, according to World Net Daily and the Bureau of Labor Stats, “unemployment in March was 20 percent higher in so-called “blue states” won by Democratic candidate Barack Obama in last fall’s presidential election than in “red states” won by Republican candidate John McCain.”

As I also pointed out in my column a few weeks ago, the states have been called “laboratories of democracy.” If one wants to see how things will work at the federal level, take a look at the states. As our economic struggles continue, it will be worthwhile to keep an eye on the states to see who gets their financial house in order first. I’m betting on “red.”

Copyright 2009, Trevor Grant Thomas
At the Intersection of Politics, Science, Faith, and Reason.
Trevor and his wife Michelle are the authors of: Debt Free Living in a Debt Filled World
tthomas@trevorgrantthomas.com

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