The First Post in the UK made an interesting point about California’s deep budget crisis. “The 'Governator' (as Arnie is known) …wants even deeper cuts - a 10 per cent reduction in the income of all state employees; cuts to school funding of $5bn; the sacking of firemen and policemen; an end to financial aid for university students; early release of tens of thousands of convicts; elimination of subsistence aid for one million children living in poverty; closure of 80 per cent of the state's parks.”
Now just consider that for a moment… California is the world’s 8th largest economy. It is $24.6 billion in debt and has had to issue IOUs instead of cash payments to its creditors. The US government glibly tapped taxpayers for nice fat $50 billion checks for each of the big banks, (BofA, Citigroup, JP Morgan Chase, Wells Fargo), and then cut $25 billion checks for a host of other prominent banks. This was all paid for by the citizens of this country, but there is no money for California, so now we will go without school funding, student financial aid, food for the hungry, police and firemen and they will shut down 80% of the state’s national parks and put criminals back on the streets instead. Amazing!
This is just insane. Why do the citizens of this country tolerate this appalling misallocation of funds? What did we get for all those billions funneled to the big banks? The credit crisis they designed, built and continue to perpetuate has not changed one bit. All the key statistics that affect the average Joe on the street have simply worsened: unemployment, foreclosures, business failures, and the banks have been tightening the debt saddle straps they have on everyone with their new tough love lending policies and credit destruction. All this talk about job creation, stimulus, getting consumer spending started again is a myth. None of it is happening, nor will it happen again anytime soon. We gave the banks truckloads of money, most of it printed at the whim of the Fed, (which is a another group of private banks), and all we got for the $13.8 trillion so far is lower credit lines and FICO scores and higher interest rates and fees.
