California Sinks

This story in the LA Times is grim. California is suspending tax refunds, some welfare payments, and some student loans. The future outlook is even worse – I don’t mean years from now, I mean next month and the month after that. State employees have received what amounts to a 10% pay cut. Thousands of public works projects are being suspended. California officials have already designed a state IOU to use in lieu of real money.

And it may not be enough. California has a serious budget deficit caused by too much spending and too much debt. California looks like a sinking ship.

Does California point the way to the future? With a gigantic budget deficit and plans to balloon the deficit with the “stimulus package”, the Federal Government could be sailing toward the same rocky shoals. It’s not yet time to jump in the lifeboats, but you’d be smart to know exactly where your lifeboat is located!


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