More Bailouts Coming (?)
We all know how well the auto industry bailout worked. The bailout is estimated to cost taxpayers (that’s us) $25.1 billion. What’s worse is that the estimate keeps rising. President Barack Hussein Obama wants to duplicate that “success” with every industry. The original bailout cost $80 billion, or about $30,000 per job. So, if you use the $80 billion/$25.1 billion ratio, we taxpayers are on the hook for over $9,400 per auto industry job.
With the auto industry bailout “success” as a backdrop, let’s look at two looming crises that will soon need a federal government bailout: the state of California, and the pension program of the state of Illinois.
The state of California has a debt of $617 billion, and it’s not going down. Governor Jerry Brown announced in May 2012, that the California deficit for 2012 is $16 billion. Let’s look at what went on in 2009 and what went on last Tuesday. In June 2009, US Rep. Zoe Lofgren said:
This matters for the U.S., not just for California. I can’t speak for the president, but when you’ve got the 8th biggest economy in the world sitting as one of your 50 states, it’s hard to see how the country recovers if that state does not.
The Obama administration did not rule out helping the state if California’s condition deteriorates significantly. Guess what. Last Tuesday, November 6, 2012, California voters approved Proposition 30 (“temporarily” increasing the state sales tax and income tax on individuals making over $250,000), while rejecting Proposition 31 (allow the governor to cut the budget in fiscal emergencies) and Proposition 32 (prevent unions from making campaign donations via members’ dues). And, via a liberal super-majority, California taxpayers are going to get all the government they ever wanted.
I would suggest that last Tuesday’s results significantly deteriorates California’s financial situation. Can a bailout be far behind? Your call.
The pension program of the state of Illinois currently has unfunded liabilities of over $200 billion, and the situation isn’t getting any better. Illinois’ current debt is $8 billion, and its 2011 deficit was $44 billion. So what was Governor Pat Quinn’s response? Quinn proposed a 2012 budget that sought a federal guarantee of its pension debt. No proposals of austerity, reductions, cutbacks, or means-testing. Let’s just let the federal government bail out Illinois. Illinois public unions are pursuing a version of the auto industry strategy: Never make a concession at the state level, figuring that if things get really bad the federal government will have no political choice but to bail out the pensions, if not the entire state.
Be sure to see this article about how state bailouts will eventually lead to default and bankruptcy.
If California and Illinois do get bailouts, it is we, the taxpayers, who will pay for their bad, selfish choices. It’s no wonder that a state secession movement has begun.
The US continues to suffer economic difficulties stemming from the federal government’s neglect to reform domestic and foreign spending. Given that the state of Texas maintains a balanced budget and is the 15th largest economy in the world, it is practically feasible for Texas to withdraw from the union, and to do so would protect it’s citizens’ standard of living and re-secure their rights and liberties in accordance with the original ideas and beliefs of our founding fathers which are no longer being reflected by the federal government.
And leave it to The Daily Kos to try to cast this movement as racist.
But that’s just my opinion.
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