Showing posts with label ArnoldSchwarzenegger. Show all posts
Showing posts with label ArnoldSchwarzenegger. Show all posts

Wednesday, April 7, 2010

Why California Could Be the Next Greece

California has a $500-billion pension time bomb. Who is writing about this?

David Crane special advisor to Gov. Arnold Schwarzenegger.

Government officials are using the crisis situation to scare the public in an attempt to raise taxes. The size of the problem is so huge, however, that a tax solution would really hurt. In an era of a growing Tea Party movement, it is unlikely that such taxes can be imposed. Further, because the debt bomb is tied in with pensions, they are extremely difficult impossible to cut.

Read the Crane piece, here. Despite his positioning of the story as Arnold Schwarzenegger wanting to do the right thing and the California legislature as not co-operating, the facts are accurate. There is no way out. Like Greece , the politicians can't cut for fear of an uprising, and, thankfully, they can't raise tax for fear of an uprising. Thus,default and bankruptcy, or Federal bailout (with controls) is looming.  

Thursday, November 6, 2008

Schwarzenegger Proposes California Sales Tax Increase to 10.25%

California Governor Arnold "If My Bodyguards Lets Me" Schwarzenegger unveiled a plan today for a steep sales tax increase, new levies on alcoholic drinks and the oil industry, and deep cuts in services to wipe out a budget shortfall that is expected to swell to more than $24 billion by the middle of 2010.

The linchpin of the plan is the sales tax increase of 1 1/2 cents on the dollar, which could raise $10.8 billion through fiscal 2009-10. ...

Tax hikes during a recession, helluva a move, Governor.

Friday, October 3, 2008

Will the Treasury Start Bailing Out States With Funding Problems?

More evidence we may be headed into a period of remarkable inflation.

California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent.

The state of California is the biggest of several governments nationwide that are being locked out of the bond market by the global credit crunch. If the state is unable to access the cash, administration officials say, payments to schools and other government entities could quickly be suspended and state employees could be laid off.

Plans by several state and local governments to borrow in recent days have been upended by the credit freeze. New Mexico was forced to put off a $500-million bond sale, Massachusetts had to pull the plug halfway into a $400-million offering, and Maine is considering canceling road projects that were to be funded with bonds.

"Absent a clear resolution to this financial crisis," California Gov. Schwarzenegger wrote in a letter Thursday evening that was e-mailed to Treasury Secretary Paulson, "California and other states may be unable to obtain the necessary level of financing to maintain government operations and may be forced to turn to the federal treasury for short-term financing."

Will the Fed print money to bailout states with funding problems? Is there even a chance the Fed, Treasury and the Bush Administration have the backbone to just say, "No"? Unlikely. Very unlikely.

-Robert Wenzel

Tuesday, August 5, 2008

The Terminator Is A Wimp When It Comes To Terminating Tax Increases

In fact, he proposes them.

California Gov. Arnold Schwarzenegger proposed during private negotiations over the weekend to close the state's $15.2-billion budget gap with a temporary but immediate one-cent hike in the state sales tax, according to legislative sources, LaTi is reporting.

Schwarzenegger has repeatedly vowed never to raise taxes.

Los Angeles County residents could face a separate half-cent-on-the-dollar sales-tax increase. The Metropolitan Transportation Authority board has proposed such a measure for the November ballot, with the money to fund transportation projects. If both the MTA and the Schwarzenegger proposals were to be implemented, the sales tax in Los Angeles County would jump to 9.75%.

The Terminator isn't very good at terminating spending either. State spending has increased 39% since Schwarzenegger took office in 2003.

Friday, July 25, 2008

Arnold May Slash Wages of Californa State Employees

Governor Arnold Schwarzenegger just announced that he will sign an Executive Order on Monday slashing the wages of over 200,000 state employees to the bare minimum until legislators send him a budget he can sign.

Reportedly not to California's minimum wage of $8 per hour, but to the federal minimum wage of $6.55.

The plan would allow the state to defer paying about $1 billion a month. Workers would be repaid their lost earnings once a budget was in place.

The deadline for passing a 2008-09 budget was July 1, and without one soon, California may be unable to borrow billions of dollars needed to keep the state solvent.

Sunday, July 13, 2008

Schwarzenegger: I'd Be Obama's Energy Czar

California Gov. Arnold "If my body guards let me" Schwarzenegger said on ABC's "This Week" that he would be open to the idea of serving as energy czar in a Barack Obama administration.

Regardless of whether he takes that particular job, Schwarzenegger, a Republican, added that he's now committed to continuing public service even after he leaves Sacramento.

Schwarzenegger endorsed John McCain at the end of January, and McCain has appeared with "the Governator" to praise his efforts to deal with climate change.

Wednesday, April 28, 2004

Watching Arnold Pump Legislation

There is a man who lives in Southern California and who is originally from Austria. His sister also now lives in Southern California and owns a restaurant that specializes in Austrian food. Over the years the Austrian-born Arnold Schwarzenegger would occasionally visit the restaurant. The man and Arnold would generally briefly chat when he visited.

After Arnold announced he was running for governor, he visited the restaurant again. The man, who regularly chatted with Arnold in the past, rushed over to talk to Arnold, like in the old days. Arnold shrugged and indicated he couldn't talk to the man. "The bodyguards, the bodyguards. They won't let me," Arnold said.

Who knows what insight this provides into the man that is now governor of California?

The bodyguards wouldn't let him?

Recently, Arnold declared victory in getting a worker's compensation bill passed. The legislative conference committee that approved the bill did not receive it until a Thursday morning at 3:35 a. m. Three minutes later the six-member panel approved the 77-page bill unanimously, with no analysis presented and no copy of the bill given to anyone but the committee chair.

In reporting on the passage of the bill, The Los Angeles Times stated:

"...even some friendly Republican lawmakers were rattled by the governor's
methods...the workers' compensation revamp 'has not been done in an open and transparent manner...' said Assemblyman Keith Richman (R-Northridge)."


The Times went on to report that "The governor said: 'I always did campaign and say, 'Let the sun shine in and let the people be aware of what's going on.' Here though, 'we had to make decisions quickly.'"

The voters of California will most certainly give Arnold a pass on the way he pushed through this legislation. Indeed, the way he pushed through the legislation is probably not on their radar screen of concerns at all.

It appears that Californians are also ready to give Arnold a pass if he breaks another campaign promise, i.e. the campaign promise of not raising taxes.

A recent poll shows that most Californians would not be upset if taxes were raised and they wouldn't be upset with Arnold for breaking this promise.

You see, most Californians seem to like the "can do" governor, even if what he is doing is the opposite of what he promised.

Interestingly enough, it was the Austrian-born, Nobel Prize winning economist, Friedrich Hayek, in his brilliant book, The Road to Serfdom, who warned about such type politicians. He was writing about leaders of nations and of totalitarian regimes, but you have to wonder if some of what he wrote doesn't apply to Arnold.

In a chapter of the book titled, "How the Worst Get On Top," Hayek wrote:

"We must return for a moment to the position which precedes the suppression of democratic institutions... In this stage it is the general demand for a quick and determined government action that is the dominating element in the situation, dissatisfaction with the slow cumbersome course of democratic procedure which makes action for action's sake the goal. It is then the man or party who seems strong and
resolute enough 'to get things done' who exercises the greatest appeal."


That sure sounds like Arnold. Arnold wants to get things done."We had to make decisions quickly," he says.

What he is getting done with this can do action is the question, though.

He prides himself on being a free market oriented governor. But, it has to be asked if he really understands what free markets are about.

A 77-page workers compensation bill may be many things, but it is certainly not a free market product. In a free market, you don't have workers compensation bills at all. You leave it up to individual businesses to offer workers compensation packages, if they feel "the market" demands that they do.

As far as increased taxes are concerned, that is simply an expansion of government. It is taking it from the general public and passing it on to special interest groups of one sort or another.

In upcoming months, Arnold will have to deal with next year's California budget. As things stand now, a 14 billion dollar deficit exists. Arnold can solve the budget problem by standing firm on his no new taxes pledge and by starting to cut back on the bloated California government expenditures. Or, he can take the easy road, use some of his popularity to give a speech, tell all Californians that they must sacrifice "for the good of the special interests, er ah, the great state of California" and wack it to them by raising taxes in a very complex manner so they all think it is the other guy who will be paying most of the new taxes.

How Arnold deals with this budget deficit is going to be a good litmus test as to what kind of character we have here.

If he fights strongly to lower the budget and not raise taxes, then California may truly have a terminator of big government growth. On the other hand, if he does raise taxes, then California has nothing but another lying politician, who is watching which way the wind is blowing.

The whole country needs to keep an eye on how all this develops. Arnold has charisma and the Republican Party knows this. Utah Senator Orrin Hatch has introduced a resolution to amend the Constitution's ban on non-American-born presidents by allowing people who have been U.S. citizens for at least 20 years to be elected to the White House.

The Salt Lake City Tribune quotes Hatch as saying: "If Arnold Schwarzenegger turns out to be the greatest governor of California, which I hope he will, if he turns out to be a tremendous leader and he proves to everybody in this country that he's totally dedicated to this country as an American . . . we would be wrong not to give him that opportunity."

The greatest governor of California, Orrin? Will see about that. Maybe if his
bodyguards let him.