IGM The Next Big Bail-out

Intergalactic Memo
To: All thinking creatures

Fr: W. Leavitt

Re: The next big bailout



I was watching Glen Beck interviewing Ted Nugent earlier, which is one of my favorite things to do, when one of those 30 second news breaks came on with the commercials.
The bodiless voice told us that Governor Schwarzenegger has asked the Feds for a 7 Billion dollar emergency loan. He says its necessary to meet payroll—especially teachers—and if they don’t get it the state will be out of cash in a month. Schools will close. Public Safety (police and fire) will be put on emergency minimum shifts, etc.
It occurred to me—because, you know, I think about this stuff—that this was an admission of some kind. But it is not really a mystery. Here’s why:
When it comes to levying and collecting taxes, California is one of the top three states. They take in more money every year than 90% of the countries on earth. Look it up. Their budget is in the hundreds of billions, possibly over a trillion by now. You can look that up too if you want, but I’m not going to.
So, if they take in more money than France or Germany or Italy or Greece or Norway or Sweden, etc, etc, where did all the money go? How could they possibly not have enough to even meet payroll? I thought about it for a few seconds and the answer came to me as a voice from somewhere above me. Well, a little above, and to the left and behind me, like, over my shoulder from somewhere in the kitchen, but it was there, I swear it.
It is two-fold. I will expose them Socratically. First, how does California collect so much money? From where does it come? They collect it in the form of one of the most egregious, outrageously anti-capitalistic, anti-liberty and independence tax systems in the history of the world. They are sucking dry the teat that feeds them. Which is for-profit business. The private sector.
The people who work for business are being killed as well, but not to the extent businesses are. The money goes directly into that huge bureaucratic dumpster affectionately called entitlements. Welfare. Social programs. Special Ed, No Child Left Behind (which Congress neglected to fund, leaving it up to the states), Head Start, Lunch Programs, Section 8 Housing, and on and on. Notice that not one of these items I mentioned sounds in any way wrong, or mean-spirited, or unnecessary. But California can’t afford it all. And that is always the problem with well-meaning but hopelessly clueless, emotionally-driven people. (You know—liberals.) They insist on biting off more than the rest of us can chew. They refuse to set limits, preferring to live in a dream world where the money will always come from somewhere. But the money comes from people’s pockets. People who hire millions of other people. And eventually, the ones who believe—erroneously—that taxing profit out of existence is a good thing, manage to do it. Then the business closes, the jobs vanish, the tax revenues dry up, and California finds itself bankrupt. Again.
Which brings us to the second reason. At some point, the people who generate most of the revenue that goes for all the entitlements, decide they’ve had enough. They close their business and move to another state, or country, or go to work as an employee, still paying taxes, but not quite as much. We experienced this a few years ago when thousands of business relocated to Nevada from California, and hundreds of thousands of people moved along with them, which artificially inflated the real estate, which made it necessary for Congress to force the banks to loan money to everybody, which . . . well, you get my point. All that money California thought they had, and would always be there, vanished. I would have told them it would happen for a lousy million. Tax-free obviously.
California literally brought this on themselves. And they have to be bailed out. And it will come out of your (our) pockets . . . as always. And the next time some moron proposes a feel-good government program, we will forget all about not having enough to pay for everything, and do it all again. Oh wait—they just did.