16 Reasons Why California Is The Next Greece
Gus Lubin - May 11, 2010, 7:56 AM CST
For now Greece isn't the world's top concern, and if the Euro bailout works, then Portugal and Spain have some breathing room.
The world's next big worry should be California.
Like Greece, it's afflicted with a mix of financial and social problems that have sent the state on a downward spiral. And in terms of the state's core structural flaw, it's got one HUGE similarity.
The only big question is: Could Washington come together to bail the state out?
California has a $20 billion budget gap -- despite last year's ravaging cutbacks
Without a federal bailout, Schwarzenegger will TERMINATE at least six major state programs
These programs include Healthy Families, CalWORKS, Adult Day Health Care, In-Home Supportive Services, California Food Assistance Program, and all funding for Transitional Housing Placement for foster kids. Read more here.
23,000 teachers have received provisional pink slips -- notifying them that their jobs are on the chopping block
The $20 billion gap does NOT include nearly $200 billion in loans and other unstated debts
How bad is the problem? Consider that California has a $20.7 billion deficit in the general fund budget over the next 16 months. California owes $8.8 billion in short-term loans that have to be paid off by June, and over $120 billion in outstanding bonds and interest that will be paid over decades. The state’s pension fund, CalPers, has $16.3 billion more in liabilities than assets, plus California also faces a $51.8 billion expense for the health and dental benefits of state retirees and future retirees.
California has the lowest S&P debt rating of any U.S. state: "A-"
Check out: S&P Downgrades California To The Status Of A Third World Country
California has America's fewest -- 7 -- emergency rooms per one million people
A national report card released last month by the American College of Emergency Physicians gave California a failing grade for access to emergency care. The state ranks last in emergency departments per capita, with only seven per 1 million people, compared with the national average of 20. And it ranks 43rd in the country for Medi-Cal reimbursement.
In 23 years, California erected 23 prisons and ONLY ONE university
To get a handle on the damage California’s current approach to incarceration is having on its citizens, consider this: In a recent 23-year period, California erected 23 prisons — one a year, each costing roughly $100 million dollars annually to operate, with both Democratic and Republican governors occupying the statehouse — at the same time that it added just one campus to its vaunted university system, UC Merced.
California has fallen from #1 in per-pupil spending to #48
Since the late 1970s, California has fallen from first in the nation in per-pupil spending, nearly to the bottom at number 48. With California’s annual budget falling from $103 billion three years ago to $80 billion currently during what’s often called the Great Recession, schools — including the world class University of California system — continue to face deep cuts in funding, fewer teaching positions, and a reduced ability to educate students.
CA spends $859 million per year on imprisoned illegal immigrants
There are roughly 19,000 illegal immigrants in state prisons, representing 11% of all inmates. That's costing $970 million during the current fiscal year. The feds kick in a measly $111 million, leaving the state with an $859 million tab.
California spends $500 million each year on wildfire damage and damage control
Get ready for the fourth straight summer of California Drought
Seven of America's most unemployed cities are in California
Including the record breaking El Centro at 27.3% unemployed.
Nearly 70,000 California homes were foreclosed on in Feb. -- the nation's most
The average home in Merced, CA has lost 63% value in four years
2010 home sales are down from last year. Uh-oh...
Mark Hanson AdvisorsSource: Mark Hanson Advisors
THE BIG ONE: California has no central bank and can't print money to stave off debt
This is everything.
The inability of Greece to give itself some monetary flexibility was devastating, and it's the reason the UK is not facing an acute crisis, despite a very high level of debt. Eventually, California will need a bailout from DC, but while European leaders came together for Greece and the PIIGS, could you imagine our fractious Congress saving Europe -- especially if the GOP takes over in November? |
