Cali Feeling the Pens-ion
Updated: May 22
A salesman friend of mine once told me that the easiest time to upsell a customer is when you have already made a sale and the customer still has the checkbook on the table. The government has adopted and mastered this technique. The line is long of palms out at the federal printing press—the almighty chef that has been serving up some healthy serving of pork. Sprinkle a little, no a lot, of fear on that hog makes it easier to ask the king cook for more as well as explain to your guest why you have the largest plate.
After Governor Newsom professed a 54 billion debt, it is safe to say that California holds the largest plate in the bread line. It needs a federal bailout big time. The federal unemployment rate came out today at 14%, worse since The Great Depression. The state forecast there’s to be 18%. Things could get worse, maybe much worse before they get better so he is correct in asking for it now. There are plenty of stressors on the budget--education, health, entitlements, infrastructure..take your pick; however, the greatest and growing cancer to the state budget is its large outlay to pensions, particularly to the educational community. it is projected to be 11 percent of the budget this year. But what really makes you go ask Cuomo for a ventilator is its 96 billion dollars of unfunded liability in the pension fund. Those who called corona the boomer remover or senior deleter have room here for their conspiracy theory.
There is plenty of blame to go around but everybody will be on their own island pointing the finger at someone else. Trump's orange face has not mixed well with the bellicose blue ire of Pelosi, Waters, Feinstein, and all the other donkeys in the state. Trump will say their mismanagement is on them. California was recently bragging of surpluses and healthy reserves. So where did it go? Did it all disappear in the eight weeks so far of corona? Is corona a viable way to ask The Big Comb Over for more money? Never let a crisis got waste--no, just let the money do that. Anyway, this will invite high decibel criticism of the state's fiscal policy and political choices. The media noise will become a migraine and viewers will be requesting the miracles of the hydroxychloroquine and z pack combo. It will be at a fever pitch when you ask for that kind of loot. If Bill Gates can create a vaccine for this he will be a god.
California asking from Trump--this may be like going to your cantankerous old father asking for financial help and you know you are going to get the guilt trip lecture. However, in politics, there is NEVER any contrition on either side, especially the people begging for the money. You watch—-the elephant will look like the ass after they spin this the story--it will look as if Trump should apologize for not giving more, and sooner.
The printing press for money has never been more at work. We just keep
printing fiat bailout money that seems to never reach the end user but does reach the end abuser. Banks get theirs but the people are always left holding an empty bag that smells as rotten as a dirty pig in uncleared pork. Forget about money growing on trees, that would be stable, no money today literally comes out of thin air. We have a fiat currency which means it is backed by nothing. What gives it value is that it is the reserve currency and widely accepted throughout the world. As long as that last statement holds, then we can continue to hold our breath that this new stack of cash will hold the economy together. It is a short term band-aid that will severely add to the debt and postpone an inevitable pain that may come sooner than later. But when will later come? We do not know as long as it is not now--that is thinking of many, and California is on the top of the list of this thinking.
The feds control the printing press pump, but the state does not have this luxury. The states have to rely on taxes or become political panhandlers and to survive they need to use both resources. Raising taxes will be as risky as walking into a coughing fit at a nursing home. Asking people to pony up when they have been bucked off the horse will have them ripping off their mask and begging for a ventilator once more. are good at both. Right now California is one of the highest taxed states in the union. This political drama will become a comedy or tragedy depending on where you sit. Out of staters who have no room for love for these never Trumpers will froth at the mouth as pundits point toward the state's list for sanctuary cities and illegal immigration. You know it is coming...so Cali, the quail is your state bird but you might need to feed on your own Capistrano swallow and eat some crow.