California’s Actual Budget Deficit to Exceed their Highly Skilled Bureaucrats’ Projection by 74%

Posted by PITHOCRATES - May 12th, 2012

Week in Review

Since President Obama came out in favor of same-sex marriage he received a boon in campaign donations.  Especially from those connected to Hollywood.  So there is a lot of money in California.  But apparently that Hollywood money isn’t making it to the state’s coffers (see California budget hole deepens to $16 billion: governor by Tiziana Barghini posted 5/12/2012 on Reuters).

California is facing a much deeper budget deficit than expected due to weak tax revenues and slow progress in cutting budgets, Governor Jerry Brown said on Saturday.

Brown said the shortfall for the fiscal year ending on June 30 now stood at $16 billion, up from a previous estimate of $9.2 billion made in January…

The state is still recovering from the 2008-2009 financial crisis that induced the worst recession since the 1930s. In April, California’s tax revenues came in $2.44 billion below the state’s estimate, largely due to weaker-than-expected revenue from personal income taxes…

California is expected to raise $7 billion in new revenue if voters approve a ballot measure in November that would increase the state tax rate on earnings above $250,000 and the state sales tax.

So the deficit will be $16 billion instead of the projected $9.2 billion.  That’s only a mistake of 74% or so.  By government standards that’s pretty good.  It’d get you fired in the private sector.  But not in the government.  Where they treat gross mismanagement and incompetence of government bureaucrats in the usual way.  By raising our taxes.

Interesting.  The solution they want the voters to approve will take more money out of the private sector economy.  Leaving people with less money to spend in the private sector.  Meaning businesses will have to cut back to reduce their output to match this decrease in demand.  And businesses do this by laying off workers.  Which will further decrease the collected tax revenue from personal income taxes.  The very problem they cite for their budget deficit woes.

This logic reminds me of an episode of The Three Stooges.  Where they were in a rowboat.  They accidentally drilled a hole in the bottom of the boat.  Water began to leak into the boat.  To get rid of this water one of them, I think Curly, drilled a second hole in the bottom of the boat.  When asked why he did this he said to let the water drain out.  Of course that didn’t happen.  Instead, water leaked into the boat through two holes.  Sinking it quicker.

I need to tell my mother that I used something I learned from watching The Three Stooges when I wish her a happy Mother’s Day.  To let her know that all that time she said I ‘wasted in front of that television set’ was not time wasted after all.  She’ll be happy to hear that.  And enjoy her Mother’s Day.  Of course it’ll help that she doesn’t live in California.  For no amount of sunshine and perfect weather can make up for the hell of the tax bomb coming in The Golden State.  (Unless you live in Hollywood, of course.)  Which is a microcosm of the tax bomb coming to the United States.  Which will be ugly.  And painful.

Gee.  I’d sure hate to be in our shoes.


Tags: , , , , , , , , , ,

Comments are closed.

Blog Home