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  • Will Washington Follow in Sacramento’s Footsteps?

    Obama and Arnold

    The federal government’s bailout parade wasn’t enough to save California this week. In a move that drew praise from some conservative quarters, President Obama refused to send federal aid to the Golden State.

    California had asked the Treasury Department to help with its $24 billion deficit. But rather than open the U.S. treasury to ailing states, Obama and Treasury Secretary Timothy Geithner decided California must first get its budget in order before relying on a federal bailout.

    Reacting to the news at this week’s Bloggers Briefing at The Heritage Foundation, Rep. John Campbell (R-CA) said bluntly: “The train wreck that is the state of California didn’t take a great fortune teller to see.”

    Bailing out California would only reinforce its current practice of poor budgeting and put the state deeper in debt after new programs are implemented but funding has dissipated, Campbell explained:

    It’s happened before because California has these huge revenue spikes because of the way the tax system is designed, The government always spends up to the spikes, and when the spike drops off there’s no revenue to pay for this enormous new government growth. It has happened four times in the last 20 years and it will happen five times in the next 20 years if there isn’t a fundamental change.

    In testimony to Congress, Geithner said:

    A lot of the burden is going to be on them [California] to lay out a path that gets their deficits down to the point where they’re going to be able to fund themselves comfortably.

    Still, there remains much concern about how California’s mess could foreshadow what’s to come in Washington.

    Based on the current prescriptions of the Obama administration, Campbell tells his friends in D.C.:

    If you want to see what Washington will look like two years from now, look at Sacramento today. The decisions being made here are similar to the decisions made in Sacramento a few years ago.

    Posted in Economics [slideshow_deploy]

    15 Responses to Will Washington Follow in Sacramento’s Footsteps?

    1. DAG, Round Rock,TX says:

      Finally DC showed some common sense.

      That is exactly what my farmer-grandfather with his 8 grade education level said to my father who went over his budget when sent to school: plan and learn to live within your means. No rewards for poor behaviour.

      Hopefully this situation won't repeat itself on a macro level.

    2. Metalchemist says:

      To address California's problem and the countries troubles, you need to address all the Illegal Immigrants that are flooding the State as well as the Country. The SPINELESS politicians KNOW what should be done but they are to afraid to take any action. For fear of retribution from the special interest groups and the political steamroller machine in Washington that is hell bent of forcing the political agenda down America's throat.

      This behavior is reprehensible.

    3. Pingback: » Financial News Update - 06/19/09 NoisyRoom.net: “Extremism in the defense of liberty is no vice. Moderation in the face of tyranny is no virtue.” Barry Goldwater

    4. Barb -mn says:

      It's apparent the president is driven to those actions of failure and a desire to repeat it. That's how crisis is born or reborn. He steals from all and services the people on issues of what the people can and expected to do for themselves.

      If he is a good man who has true intelligence, he wouldn't repeat history, he would learn from it. He wouldn't follow the steps of failure, he would know to avoid them. He wouldn't encourage individual weakness, he would inspire individual strength. His actions prove not to be a good.

    5. Bert says:

      "Treasury Secretary Timothy Geithner decided California must first get its budget in order before relying on a federal bailout."

      ———

      Sooooo….they're actually PLANNING on giving CA federal money, AFTER they figure out how to save twenty billion? So, what about Michigan? MI is in dire fiscal straits with 14.-something% unemployment, why not utilize federal money there? CA, by all accounts, is doing OK for itself, and they keep saying they pay out more in federal taxes than they get back in benefits and all that, so, don't give em anything! Matter of fact, take all those military places in CA and move em to other states, so that NO federal money gets spent in CA whatsoever, except maybe for highway money for the interstates. Oh, but THEN the shrieking and yowling would grow to a high crescendo…

    6. Brad Raffensperger, says:

      Where in the world are we going to get the money to pay for another bailout? I guess the printing presses haven't clicked on to the 3rd shift yet. Is it going to take a total financial collapse before we realize we can not spend money we don't have? Rest assured Washington, the American taxpayer here in the heartland understands this very well. We are paying our bills and when we hit a roadblock in our personal financial lives we cut back so we can make ends meet. Why can't California do the same? It is hard work, it requires hard decisions, but leadership requires no less. You are driving the train off a cliff.

    7. Lebo, florida says:

      If you elect a Clown, then don't be surprised when the Circus comes to town. Little Timmy is just part of the Obama Clown Circus.

      Bail out California with our Tax Dollars? Pray tell, where is that allowed, or even mentioned in our Constitution? Just more of the same..keep those money presses going!

    8. Jeff, Rehoboth says:

      The way that I understand the California budget is that a huge percentage (on the order 40%) of spending is mandated from previous voter referendums.

      Governor S. tried to address this a little while back via that same referendum process, but was rejected by those same voters. He should have stepped down after this rebuke and let the Left run the state the rest of the way into the ground instead of moving toward the middle and allowing the view that his party is really steering this sinking ship.

      The liberals in the CA legislature are never going to reign in their spending. Likewise, it seems that addressing Illegal Immigration has become the new third rail in CA politics. Open borders. Welfare state. Good luck with that.

    9. rich weirton, wv says:

      California's problems are self inflicted. Handing out billions of dollars every year to millions of illegial immigrants (who take, take, and take, but do not pay taxes).

      It would seem that if the democrats would use some common sense and return all these leeches back to where they came from, the problem would be solved.

      But the democrats are willing to spend ANY amount to expand their power. After all it isn't their money that they are using to buy their votes with, it is OURS

    10. Carol in az says:

      Ca has never had a balance budget.

      If Arnold and his special interest groups even support a Social Security benefits program to the thousands of illegals that will for certain come out- of -the -shawdows for the taking of our country one time, I do feel that Americans who have supported our system, will revolt in the thousands.

      Ca has supported entitlement programs in the millions, resulting in bankrupting the State.

      How many times does this scam have to play itself out in America?

      You start with the millions in entitlements programs.

      Sacramento is pround to call itself a Sanctury city , sound like a good place to start to me.

      Who in the press in CA has ever printed that fact sheet.

      Where is the accountability in terns $$$$'s ?

      No one want to touch that subject.

      It's called, " the fleecing of the middle class" who have paid and paid into the system to suopport special interst groups who employ these people.

      Greed is a powerful tool and duplicity cut deep on all levels.

      No ,I do not feel sorry for CA, I just feel sadden that a citizen group has not enpowered themselves to turn this mess around county by county and take back their State. It obvious that the elected leadership is totally out of touch on all levels.

    11. Kahu, Hawai`i says:

      Yes, Obama will secure California's 55 electoral votes and secure control of state medical care benefits, educational policies, social gay agenda policies and free border policies with Mexico in order for the state of California to be eligible for Federal funds.

    12. OPAS says:

      No problem, there is a solution. The "COMPATIONATE"? movie stars and moguls are quick to volunteer other peoples money. How many times have they said over and over, they are willing to PAY MORE! Now they can put in practice what they have openly preached, EACH SHOULD GIVE WITHIN HIS PERSONAL MEANS. It is within their means to give one half of their income to help destitute California.

      btw, WHY? are all the BIG MOUTHS that preached "EVERYONE MUST SHARE 'YOUR' WEALTH" hiding?

    13. Lynn B. DeSpain says:

      In my family we were always taught to save 25% of what we brought home. Never touch it, except to invest in land, or home. No Autos, no clothes, no vacations, no nothing. That money was there for investment and hard times. Times when your job might not be there and you would have to move to find another. Think about it, actually move to find a job!

      We were also taught that a certain amount was for regular bills, food, and some saved for "The Vacation". Any money left over was called 'Mad' money or in other words you could spend it on extras that you wanted, or felt that you needed. If you felt or thought that you needed more, you found extra work, or learned a trade to do on your own time, for the money.

      Our Government doesn't do this. It seems to think that it is a Sin to have any money left over at the end of the Fiscal year. The Higher ups ion a Government system actually punish sectors that do not spend all their quotas, by giving them less money the next year!

      Sure wouldn't work for long in the Private Sector! "John, we've noticed that you have been working extra hard, and even putting in some extra hours and your production is up! So as a result of all that, we are going to lower you Pay!" Yup, that would really work all right. But that is exactly how our Governmental systems do!

      Califoria is Bankrupt for the same reasons that Obama want our Nation to bring forth now! More intrinsic Governmental Health Care Systems, Welfare Systems, Social Programs, "Tax the rich to feed the poor until there are no rich no more."

      Isn't that just perfect! Here we have California as an example of what to do wrong in every aspect and what does our Great Nation decide to do, follow California's example, down to the last and final letter.

      Wait 2 years and vote. Wait 4 years and vote. In the meantime, write, talk and be seen and heard. Support those with reason. Do not be afraid to speak out against those who have none.

      Hozro

    14. Marshall Hill MI. says:

      Too Bad,so Saad!

    15. Jerry from Chicago says:

      Since all of the liberals in California worked so hard to be in the position they find themselves in today, I say let them enjoy the fruits of their labors — all by themselves.

      Sending them even one dollar of "bail-out" money would be, at the same time, sending them the message that what they did was the right thing.

      Actions and inactions all have consequences. We can't keep rewarding stupidity and expect the right things to happen. As you sow, so shall you reap.

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