Welcome to the Greatest Depression. You are living in history. Where did all this come from, short sighted policy. An example: California. This editorial from the Los Angeles Times shows how the hole was dug (it’s very, very deep and will take opportunities away from millions for a long time).
“A good place to start is with the slew of revenue reductions that have hit the state since 1978, when Californians passed Proposition 13. The initiative dramatically reduced most property taxes and resulted in a 57% reduction in property tax revenue during its first year, and its effects continue.
Another revenue drop came in 1982, when voters passed an initiative abolishing the state inheritance tax. Before that, California had taken in nearly $1 billion a year in estate taxes.
And there are vehicle license fees. Starting in 1998, the fees were reduced incrementally until Gov. Gray Davis raised them to close a budget gap in 2003. When Arnold Schwarzenegger came into office later that year, he immediately reversed the hike — at a cost to state coffers of about $4 billion each year since then.
Add to that the collapse of the dot.com bubble in 2004 — which resulted in a drop of several billion dollars in state revenues from capital gains taxes — and the current global economic downturn and you start to see how state revenues have suffered.
Next, consider a series of structural complications that hamper the Legislature’s ability to come up with solutions. First among them — again — is Proposition 13, which requires a two-thirds vote of both legislative houses to raise taxes. This has meant that a small minority can keep the majority from enacting tax hikes that would help balance the budget.
Term limits, enacted by voters in 1990, were designed with good intentions. They would, their backers said, allow for more turnover in state government and more opportunity for worthy candidates who wouldn’t have a chance against incumbents. But term limits have also meant that many legislators don’t have deep experience in the state issues facing them. They also don’t have enough time in office to develop collaborative relationships with their fellow legislators.”
How bad is it now? Check this link. It’s bad, isn’t it? Well, that’s the official unemployment.
We are presently at about 16% unemployment. The unemployment rates were cooked by the federal government in the 1980’s, as cited they are generally not accurate.
Unfortunately we are going to experience several more waves related to the economy. The alt-A wave, personal credit collapse wave, and the commercial real estate timebomb.
It amazes me that you can easily find sites on the web where nothing was learned. The neocon/libertarian idea that regulations are the problem and government is “the problem” has placed us where we are. Unfortunately things are in free-fall now with no end in sight.
The DOL cites where we are at as:
“In the week ending July 4, the advance figure for seasonally adjusted initial claims was 565,000, a decrease of 52,000 from the previous week’s revised figure of 617,000. The 4-week moving average was 606,000, a decrease of 10,000 from the previous week’s revised average of 616,000.
The advance number for seasonally adjusted insured unemployment during the week ending June 27 was 6,883,000, an increase of 159,000 from the preceding week’s revised level of 6,724,000.”
The dimension of this is terrible.
“A record 33.8 million people received food stamps in April, up 20 percent from a year earlier, as unemployment surged toward a 26-year high, government figures show. Spending also jumped, as the average benefit rose.
It was the fifth straight month of record participation in the Supplemental Nutrition Assistance Program, according to the U.S. Department of Agriculture, and up 1.8 percent from the prior month. Total spending was $4.5 billion, up 19 percent from the previous all-time high reached in March, the USDA said.
The government is boosting food aid in response to a jobless rate that rose to 9.5 percent in June from 9.4 percent in May. An additional $20 billion over five years was authorized for nutrition assistance in the $787 billion stimulus bill Congress passed in February.”