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California Taxing and Regulating Itself into Bankruptcy

Posted by Steve Markowitz on October 26, 2015

Victor Davis Hanson published a piece in the nationalreview.com titled “Can California be Saved?”.  This article offers a clear indication that California is a canary in the mine for the social and economic decay in America.  Hanson shares the following facts for the State:

  • Los Angeles’s violent crime is up nearly 21% for the first half of 2015 with an 11% increase in property crimes. One cause is California’s Proposition 47 passed in 2014 that released thousands of prisoners.  Proposition 47 was an attempt by California to its costs for the prison system.  Costs may be down, but crime is skyrocketing.
  • California is in the fifth year of a significant drought. This could be alleviated had the State followed through with a new reservoir system approved under California Water Project.  Lack of funding caused projects to be unfinished.
  • California’s traffic accidents have increased by 13% during in last three years. A significant cause is deteriorating roads that are not properly maintained.  It is hard to imagine why a state that includes some of the highest taxes in the country cannot repair its own roads.
  • California is awash with natural resources, yet its gasoline and electricity costs are amongst the highest in the country. Progressive policies inflicted by wealthy liberals who can bear these expenses are the cause.  However, these high costs devastate lower income brackets, a typical unintended consequence of Progressive policies.
  • Approximately 33% of America’s welfare recipients reside in California with nearly 25% of the State’s residents falling below the poverty line. This is unconscionable considering where that state was economically just a few decades ago.

Who is responsible for this sad state of California’s economics?  It is politically expedient to blame the wealthy or nasty conservatives.  However, given that many of the wealthy in California are liberals and all major government offices in the State are controlled by Democrats, this dog just doesn’t hunt.

California can be considered one of the great experiments for American Progressives.  Liberal politicians promised to fix societal ills with all sorts of interventions.  The fact that these ills are larger today than when the liberals started their experimentation and have spent trillions implementing the policies is proof they failed.  In addition, a significant portion of these poorly spent funds were but a form of crony capitalism, benefiting the social services, education and other industries

Adding insult to injury, Progressive policies distorted the economic diversity of the State.  Those considering starting businesses are likely to leave California in search of more business friendly environments.  Those wanting to build wealth for their families moved to states with less aggressive tax policies.  In addition, immigrants found California’s easy to obtain social benefits and naturally matriculated to this environment.  The result; California is top-heavy with those who being pulled in the cart then those pulling it.  The cart is now being bogged down in a quagmire.

California needs to change its political and economic ways if it is to remain solvent.  Before a plan can be created to implement change, it is necessary that the State become introspective and ask why and how California has deteriorated so much over the past five decades.  The answer will be painful for many.

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