A question was raised in a Facebook group yesterday from an East Coaster, regarding the federal debt limit, related to our great State:
“Since many in this group are Californians, I am wondering what you are thinking about August 2. Didn’t you go through a “debt crisis?” What happened there? It looks to outsiders like you just keep rolling along…just curious.”
My very quick, off the cuff answer:
California has been “lucky” in a lot of respects, being able to keep things going with smoke and mirrors, borrowing against future years, and other creative means, all the while not ever having a real balanced budget despite the state requirement to do so. It will all fall apart at some point, or continue along just on the cusp of breakdown until at some point the economy betters and thus increases sales and other tax revenue to the state. If the latter occurs, the Sacto politicos will once again be in hog heaven until the next economic slowdown, while never addressing fundamental budget issues. This cycle cannot last forever, but has at this point in CA for about the last 20 years.
What’s your answer?
Comments 2
Ditto.
California’s luck is wearing out, given continued dismal performance in jobs..
Some day the future will arrive along with a bunch of past due bills. And even if the economy improves significantly, a big chunk of the revenues will be obligated to pay down principal and interest. This only means that even with additional dollars in its coffers, government will have less available to spend on the critical functions such as public safety and infrastructure that it is supposed to provide.
Regarding comparing it to the national situation, it has often been said that California is at the forefront of many national trends.