Calofornia is DOOMED!

[lsa420]

Re: Calofornia is DOOMED!

GDP of Greece: Approx $340B

http://en.wikipedia.org/wiki/Economy_of_Greece

GDP of California: Approx $1.9T

http://en.wikipedia.org/wiki/Economy_of_California

[lsa420]

Re: Calofornia is DOOMED!

Glass 1/2 full or glass 1/2 empty. I agree California will the first to drop and hence the first to lead the country back to prosperity.

New Jersey is also a major economic state that is in the running for the first to crash and re-build, in my opinion.

The current system cannot be fixed by keeping the current system.

Change actually requires change.

Change actually requires the government (local and federal) to pass / change legislation.

Single payer health care would save $300 billion a year: overhead, underwriting, billing, sales, marketing department, huge profits, exorbitant executive pay, doctor and hospital administrative staff.

$300 billion = enough to cover everyone.

The numbers easily work, even with new government overhead built in, unless you are too lazy to do some actual research into the facts.

The only losers are health insurance firms and the politicians that they have bought.

It is actually a no brainer - unless of course you have no brain.

Perhaps a government run healthcare system could work. But it's impossible while engaged in 2 wars, policing the world and running our foreign empire.

How much money would ending all that BS save? Close to $1T.

If you want healthcare, then the no brainer is ending the military empire. I wish liberals would push for that instead of spending more borrowed money.

[flintlock]

Re: Calofornia is DOOMED!

Perhaps a government run healthcare system could work. But it's impossible while engaged in 2 wars, policing the world and running our foreign empire.

How much money would ending all that BS save? Close to $1T.

If you want healthcare, then the no brainer is ending the military empire. I wish liberals would push for that instead of spending more borrowed money.

Yes, where are all the war protests now that Obama is in control?:confused:

[sunskyfan]

Re: Calofornia is DOOMED!

Well, the don't stick that money under a mattress while they hold on to it before it gets spent to do work. Besides taxes and 401K contributions where is a bigger pool of money? And, it is funneled into just a few companies. When the crisis happened 18 months ago the biggest "non-financial" failure wasn't GM it was an insurance company AIG.

[vanvaley1]

Re: Calofornia is DOOMED!

Perhaps a government run healthcare system could work. But it's impossible while engaged in 2 wars, policing the world and running our foreign empire.

How much money would ending all that BS save? Close to $1T.

If you want healthcare, then the no brainer is ending the military empire. I wish liberals would push for that instead of spending more borrowed money.

Bit of irony goin' on out here in California: they're closing down schools, reducing pay, cutting jobs, etc. while the military sits on bases it admits it wants to close down cuz there's no need for them now. But keepin' base jobs means contentin' political base.

'Liberals' and 'Conservatives' both have and are participating in the 'sin' of borrowing money they don't 'have' to spend on their favorite programs that they think will meet their primary objective...stayin' in office cuz it's nasty 'out there'. And cutting 'sweetness' ain't a good diet presciption for staying in office...lest ya use BLS number theory where ya can reduce your weight without havin' to change your clothes size.

Need a new set of priorities. Need some leadership that don't out right lie or lie by obfuscation that will tackle problems rather than 'push them down the road' cuz it keeps the politicians in office and the plunderers pockets packed. Question be, "What happens when the road ends?" http://www.zerohedge.com/ has an interesting article today that addresses that scenario "It's Going to Implode: Buy physical gold NOW"

[Serge_Tomiko]

Re: Calofornia is DOOMED!

1. The largest wealth creation engine on planet earth. A magnitude larger than anywhere else. Do not EVER discount the power of technological advance and we are living in the middle of massive technological advances that are close to making it to market. A true technology bubble is different then a pure financial bubble because when the dust clears there are new corporations left standing that build actual products and services.

I think that you are discounting the reality that technology has, for the most part, done little to improve the standard of living of the typical American.

What on earth could the next technology bubble give us?

Many people with families would move back to California for the security of single-payer health care and would not mind the extra taxes for the added security plus the added freedom to control their own careers and choose employers on their own terms.

People did not leave California for healthcare. They left due to the tremendous demographic shifts that have occurred there over the past 30 years. There is only one meaningful predictor of relocation behavior of Californians: race and ethnicity.

I sympathize with your hope, I really do, but it's not going to happen.

[jimmygu3]

Re: California is DOOMED!

Don't know much about Mr. Smith but his insight and reasoning appears quite sound, at least to me.

I have relatives in Orange County and Los Angeles who discussed this with me back in the Mid-1990s.
We all thought it was crazy back then.:eek:



*of two minds* *charles hugh smith*

Why California Is Doomed (March 9, 2010)


California is doomed for two simple but profound reasons: the cost structure is too high for most businesses to survive, and a boom-dependent economy.

The dysfunctions crippling California would easily fill a volume: a dysfunctional Legislature that has been gerrymandered to protect virtually every seat; a dysfunctional proposition system which enables special interests to craft Protected Fiefdoms via the ballot box; recalcitrant public unions who don't see anything wrong with public servants getting 90% of top-pay in pensions while still earning big bucks as "contract employees," an enormous population of undocumented workers who pay only sales taxes, and whose employers pay no payroll taxes, either-- and that just scratches the surface.

I want to highlight two systemic, structural causes for California's impending bankruptcy as a state and as an "economy": a crushingly high costs structure and an economy entirely dependent on the next boom.
I know this sounds too simplistic to be meaningful, but I think there is much truth in this statement: Costs are too high because the guy before you paid too much.
In other words, you can't afford the $500,000 mortgage on the $625,000 house you bought in 2008 because the guy before you paid $550,000 for a house which sold for $140,000 in 1997.
These numbers are drawn from reality: our friends bought a small home in a desirable suburb in the San Francisco Bay Area for $140,000 in 1997. Yes, it was a fixer-upper and yes, our friends completely remodeled it. The fair value of the house after renovation was probably in the $175,000 to $190,000 range, tops.
They sold the house in 2005 for $550,000, and that buyer unloaded the house in 2008 for $625,000.
This represents approximately $235,000 of actual value (the $175,000 adjusted for inflation from 1997 to 2010 as per the BLS inflation calculator) and $390,000 of "credit-bubble" excess.
Yet that "bubble valuation" is an actual cost now that somebody borrowed money to pay that grossly inflated price. This mechanism is absolutely key to understanding the California economy's fundamental insolvency: the apartment rent is high because the landlord overpaid, the office rent is high because the landlord overpaid, the house is too high because the previous owner overpaid and his/her lender ponied up the mortgage based on bubble valuations. You can see the bubble in this chart of median home prices in Califonia: ...

http://www.oftwominds.com/blogmar10/...omed03-10.html

I agree that Cali is in big trouble, but Smith's housing data is cherry-picked and the interpretation of it is distorted.

In the chart above (from the article), you can see that 1997, his 'arbitrary' baseline, was actually the bottom of a decade-long bust. Why does Smith not go back to the beginning of the chart, where median home prices were ~$195k in 1990? Using the BLS inflation calculator as Smith does, that $195k house should now go for $323k.

But oh, crap! That would mean that prices are now below historical norms. So Smith figured it's better to start at the 1997 low and ignore the other data. Then he put some nifty red lines on the chart as if he expects a non-inflation-adjusted return to the 20-year nominal low as some sort of equilibrium point. So is he an idiot or a liar?

-Jimmy

[btattoo]

Re: Calofornia is DOOMED!

Jimmy, Good point. The below seems to suggest today's prices might be inline with a 30 year trend (i.e. not in a bubble). However, perhaps that trend is on FIRE?

[Starving Steve]

Re: Calofornia is DOOMED!

The "cost" of that California bubble home has now been spread across all American taxpayers via the banks dumping all these bad mortgages on the federal government via TARP type programs. Lower home prices does impact local government tax receipts, but that is a plus as they will eventually be forced to cut public salaries and pensions.

I agree California could go under but you always need to look on the other side in a unbiased way. 2 major positives California has:

1. The largest wealth creation engine on planet earth. A magnitude larger than anywhere else. Do not EVER discount the power of technological advance and we are living in the middle of massive technological advances that are close to making it to market. A true technology bubble is different then a pure financial bubble because when the dust clears there are new corporations left standing that build actual products and services.

2. If California passes single-payer health care regardless of congress then that will drastically change the "cost structure" you mention.

http://californiaonecare.org/

Employers if freed from health insurance monopoly will result in a massive small business boom in California and hence a jobs boom, leading the nation in job creation hands down.

I personally would consider moving my small business to California if they pass single-payer. My costs would drastically decrease and I could hire top-notch talent away from my big corporate competitors that have a huge (massive, huge) competitive health insurance cost advantage to retain top talent.

Many people with families would move back to California for the security of single-payer health care and would not mind the extra taxes for the added security plus the added freedom to control their own careers and choose employers on their own terms.

Are you tuning-in, Raz? Socialized-medicine (single-payer medicare i.e, California state-funded medicare for EVERYONE, regardless of age or pre-existing condition or employment status or national origin or citizenship or green card or employment history, or whatever language is spoken) would LIBERATE small-business of the cost of providing health insurance for their employees. This would create a small-business renaissance in California. This is the freedom we speak of--- the real economic freedom that counts.

California to Alabama and Raz: Are we connecting here?

[jpatter666]

Re: Calofornia is DOOMED!

Are you tuning-in, Raz? Socialized-medicine (single-payer medicare i.e, California state-funded medicare for EVERYONE, regardless of age or pre-existing condition or employment status or national origin or citizenship or green card or employment history, or whatever language is spoken) would LIBERATE small-business of the cost of providing health insurance for their employees. This would create a small-business renaissance in California. This is the freedom we speak of--- the real economic freedom that counts.

California to Alabama and Raz: Are we connecting here?

Maybe. For awhile -- just like the flood of money printing lifts the economy.

Then, the reality.

How would California pay for such a plan? They are already so far down the hole they can't see the opening anymore. If taxes were raised to pay for it, that would start a bigger flood of companies leaving. Who pays those taxes? Often the small businesses you speak of.

As has been mentioned earlier -- yeah, some companies might move to California (why? Because it's good for *them*. No altruism there.). And as soon as taxes are necessarily raised and they think they can get a better deal elsewhere, they're gone. Summer soldiers (entrepreneurs) of health-care reform? :rolleyes:

What would stop every seriously ill person in the country from trying to move to CA to get "free" healthcare?

Weirdly enough, I've come to the conclusion that state plans will not and cannot work -- it's going to have to be a national plan or fundamental reform of the existing system (and the privacy guys are going to have to give some as well for that to really work)

I'm not convinced single-payer is the solution, but I am convinced that the present system is unsustainable.

[c1ue]

Re: Calofornia is DOOMED!

Still waiting for the Mula Man renaissance engine in California.

Meanwhile:

http://www.nbcbayarea.com/news/polit...-86264737.html

On Friday, 15,000 of San Francisco's 24,000 city employees will be receiving pink slips from San Francisco Mayor Gavin Newsom.
It's part of his controversial plan to then rehire many of them back, but for only 37.5 hours a week. Rehired employees would keep existing benefits such as vacation time and health insurance.
An unknown number of employees will be offered part-time work, or laid off entirely.
The city is facing another year of budget deficits. The plan is expected to save up to $100 million of a projected $522 million in defects, while costing rehired employees approximately nearly seven percent of their paycheck.
The 37.5-hour plan is reminiscent of France's failed experiment with a shorter work week earlier in this decade.
"Over half of our City budget is used for Employee salaries and benefits. While I take no pleasure in the fact, I cannot deliver a balanced budget without reorganizing the City workforce," read a letter sent to city employees from the mayor's office and signed by Newsom.
Public safety and Muni operators won't be affected by the layoffs. And, naturally, unions representing city employees are not pleased. An SEIU representative told the San Francisco Chronicle "cutting down the time doesn't eliminate the work," but Newsom was unsympathetic to those concerns.
While the Board of Supervisors likely would vote against the measure, they can't, though unions and employees could challenge them in court.

Best case - 6.25% pay reduction. Worst case - not rehired (i.e. permanently fired).

[ThePythonicCow]

Re: Calofornia is DOOMED!

They left due to the tremendous demographic shifts that have occurred there over the past 30 years.

I left California because of the taxes, the out of control government and the leftist politics. Universal health care would have been one more nail in that coffin.

[ThePythonicCow]

Re: Calofornia is DOOMED!

I'm not convinced single-payer is the solution, but I am convinced that the present system is unsustainable.

We have lost track of what's healthy.

Our food, medical and pharmaceutical infrastructure has become maximized for profits of large corporations rather than for health of individuals. Significant portions of our media, press, regulatory, legal, insurance, education bureaucratic and political systems have become accessories to the crime.

For example, the universal health care bill before Congress is (amongst other travesties) a government enforced expansion of the customer base of the health insurance industry.

[Starving Steve]

Re: Calofornia is DOOMED!

I left California because of the taxes, the out of control government and the leftist politics. Universal health care would have been one more nail in that coffin.

Medical insurance thru private for-profit health insurance companies in America now costs $600 per month, plus co-payments, plus deductibles. And that is if you can even get the insurance and you are not excluded because of pre-existing health conditions.

Here in Canada, I pay ZERO. My only costs are slightly higher income taxes.

I have the same coverage in medical insurance through Canada's Medicare Programme as I had with Kaiser Permanente in California, but my out-of-pocket cost for healthcare insurance in Canada is ZERO.

Yes, I pay a few dollars extra per month--- like about $50 extra per month--- for ridiculous taxes such as their stupid carbon tax, the GST, the Victoria Airport departure tax, the BC provincial sales tax, the speed traps, and some other crap from governments like the outrageous ferry fee to get on and off of Vancouver Island, but I get my healthcare FREE. I pay NOTHING.

Not only this, Canada is running a surplus, and BC I think is running a surplus too..... So, you had better think long and hard about your for-profit private health insurance lobby in the U.S.---- the bunch that pay bribes to the U.S. Congress to keep their monopoly going in health insurance. Wouldn't a change to a Canadian-style socialized-health insurance plan be the best move that America could make?

My healthcare here in Victoria, BC is quite comparable to that in California with the best private health insurance plan: Kaiser Permanente. I just spent 40 minutes with a doctor doing a scan of my leg to check on my blood clot. He was absolutely excellent and thorough. Anyone who tells you that socialized medicine doesn't work well is a liar, pure and simple.

You need to think about changing your position about taxation and about socialized medicine.

I admire the independence of Texans and their life-style and their ranches. But I do not admire their rigid conservatism. The Texans just might be wrong about socialized medicine.

[ThePythonicCow]

Re: Calofornia is DOOMED!

http://www.zerohedge.com/ has an interesting article today that addresses that scenario "It's Going to Implode: Buy physical gold NOW"

jtabeb posted a link to this same article in the thread It's going to implode buy physical gold now (Jtabeb signs off)

Yes, it is an interesting article.