California lawmakers are trying to make it look like they’re cutting expenses so they can run to Washington for a bailout. However, they’re not touching the biggest expense—state pensions—which tells you all you need to know about the sincerity of their effort. From John Rubino at dollarcollapse.com:
Just a few months ago, California was running surpluses and spreading the wealth around — at least to its affluent voters and public sector employees — as if the good times were here to stay.
Fast forward to the present and it’s all over. Tech stock IPOs – a huge source of capital gains tax revenue for the home of Silicon Valley – have evaporated. Those “unicorn” companies – not yet public but worth over a billion dollars each – are doing “down rounds” that value them as the risky start-ups most of them are. The formerly booming housing market has ground to a halt. And thousands of service industry businesses like restaurants and nightclubs have closed permanently.
But the state government still has to pretend to balance its books, so now comes the tragicomedy of negotiations between the governor and state legislators over where to find the needed $50+ billion. Here’s how the Associated Press covers it in an article bafflingly titled California lawmakers agree to close $54.3 billion budget gap:
