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Tuesday, June 30, 2009
The Car....
Monday, June 29, 2009
California faces a $24 billion budget shortfall !!!!
This is a must read bit of information.
SACRAMENTO, Calif. 6/29/2009 (AP) - California faces a $24 billion budget shortfall, an eye-popping amount that dwarfs many states' entire annual spending plans.
Beyond California's borders, why should anyone care that the home of Google and the Walt Disney Co. might stop paying its bills this week? Virtually all states are suffering in the recession, some worse than California. But none has the economic horsepower of the world's eighth-largest economy, home to one in eight Americans. California accounts for 12 percent of the nation's gross domestic product and the largest share of retail sales of any state. It also sends far more in tax revenue to the federal government than it receives - giving a dollar for every 80 cents it gets back - which means Californians are keeping social programs afloat across the country.
While the deficit only affects the state, California's deepening economic malaise could make it harder for the entire nation's economy to recover. When the state stumbles, its sheer size - 38.3 million people - creates fallout for businesses from Texas to Michigan. "California is the key catalyst for U.S. retail sales, and if California falls further you will see the U.S. economy suffer significantly," said retail consultant Burt P. Flickinger, managing director of Strategic Resource Group. He warned of more bankruptcies of national retail chains and brand suppliers.
Even if California lawmakers solve the deficit quickly, there will likely be more government furloughs and layoffs and tens of billions of dollars in spending cuts. That will ripple through the state economy, sowing fear of even more job losses. Californians have already been scaling back for months as the state's unemployment rate has climbed to a record 11.5 percent in May. Increases to the income, sales and vehicle license taxes approved by lawmakers and Gov. Arnold Schwarzenegger in February acted as a further drag on spending. Personal income declined in California in 2008 for the first time since the Great Depression, and income tax revenue fell by 34 percent during the first five months of this year.
The decrease in spending is especially evident in automobiles. California is the nation's largest single auto market, and sales are down 40 percent from last year. Auto dealers see little hope of a quick turnaround, especially after a 1 percentage point increase in the state sales tax and hike of the vehicle license fee. State agencies also canceled contracts for hundreds of new vehicles, retroactive to March, said Brian Maas, director of government affairs for the California New Car Dealers Association.
Because California's $1.7 trillion annual economy is so important, the state's treasurer has asked for federal help - in the form of a guarantee that would allow California and other states to take out short-term loans at lower interest rates. A federal guarantee would cut the interest rate on the state's borrowing by as much as half, saving California taxpayers hundreds of millions of dollars. "It's not that California got itself into trouble and wants the federal government to bail it out," said Rep. Brad Sherman, D-Los Angeles. "California wants the federal government to do for a fee that which Wall Street would do for a fee if Wall Street wasn't broken."
But some members of Congress worry about setting a precedent for bailing out local governments.
"You've got many states throughout this country, you've got many cities that are in tough financial problems, so they will all come for help," explained Rep. Kevin McCarthy, R-Bakersfield. Any extra federal assistance is sure to be a hard sell in Washington and elsewhere because of California's free-spending image. That may have been true before the recession, but the state cut $15 billion in government spending in February and plans to solve most of the $24 billion deficit through even more cuts.
Government workers face the possibility of three-day-a-month furloughs, teachers are being laid off, lower-income college students stand to lose their grants and hundreds of thousands of poor children could go without health care. The recession is behind this fiscal turmoil. Some 1 million jobs are expected to be lost in California in two years and unemployment is estimated to peak at 12.3 percent in early 2010, said Jeff Michael, director of the Business Forecasting Center at the University of the Pacific in Stockton.
Schwarzenegger has repeatedly stressed that he hasn't asked for a bailout and doesn't want any special treatment for California - though he likely wouldn't reject more stimulus funding if it came his way. Economist Stephen Levy, director of the Center for the Continuing Study of the California Economy in Palo Alto, has argued for another nationwide stimulus package to help all states avoid further cuts to social programs intended to help vulnerable people. "If we are the bellwether, I would have Californians reach out to other states and really make a plea for national assistance," Levy said. "The recession is not our fault."
As goes California, so goes the rest of the nation.... That is a sobering thought.
From The Economist....
"A DECADE ago it would have been unthinkable, but on June 12th, Congress passed the toughest anti-tobacco bill in American history. Those who had waged a long fight against “Big Tobacco” rejoiced. Senator Edward Kennedy hailed the bill as proof that “miracles still happen” in Washington, DC.
The Family Smoking Prevention and Tobacco Control Act gives the Food and Drug Administration (FDA) broad power to regulate tobacco products and marketing efforts. Health advocates have long complained that the FDA has oversight over more innocuous products, like lipstick, but not cigarettes, which are responsible for more than 400,000 American deaths a year. The new law will require disclosure of all product ingredients and the placement of more prominent warning labels on packages. The FDA will also have the right to review all new tobacco products before they go to market and to ban companies from advertising any of its products as healthier alternatives by describing them as “lite” or “mild”, for example.
The bill focuses on deterring young people from puffing away. It will outlaw flavoured tobacco (except for menthol), which some claim lures children, and bar tobacco advertisements from appearing near schools. The Congressional Budget Office says the new legislation will reduce the number of young smokers by 11% and adult smokers by 2% by 2019. Some say the legislation will save many more lives. Nine out of ten smokers start before the age of 18, reckons the American Cancer Society’s advocacy affiliate, so hindering tobacco companies’ access to youth could reduce the number of smokers dramatically in the long term.
The new law adds more pain to the tobacco industry, which saw a federal tax on cigarettes nearly triple earlier this year and the imposition of many new state-level bans on smoking in public places. Now the tobacco industry must finance the government’s new regulatory activities by paying fees according to each company’s share of the market. The total cost of the FDA’s tobacco regulations will begin at $85 million a year and rise to over $700 million in ten years. The battle is not over, though. The tobacco companies are expected to go to court, contesting the advertising restrictions as an infringement of the constitutional right to free speech."
The above ran in the Economist on the 18th of June, 2009. The question now is who will gain from all of this? I doubt very much this new government intrusion into the lives of citizens will do much to cure cancer, or prevent heart attacks and whatnot. Congress must have a very short memory. Look what happened when they banned the consumption of alcohol. We had almost everyone breaking the law not to mention a host of colorful characters making bathtub gin and selling it in speakeasies. The word Gangsters comes to mind and I'm not talking about Rap music here.
It's Another Manic Monday....
Sunday, June 28, 2009
Sunday
Saturday, June 27, 2009
Wow...
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Trees rule the World!
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Friday, June 26, 2009
Friday Evening
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A Phenomenological Study it will be.
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Friday ... TGIF
Thursday, June 25, 2009
What a Day!
Michael Jackson
The Vault
Another Day
Wednesday, June 24, 2009
Good News - Bad News
Girrrr. Lousy Day
The Humidor
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Innabi Mediterranean Grill
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Weather and stuff
Coffee
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Wednesday AM
Tuesday, June 23, 2009
More thoughts
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Random Thoughts
Tuesday evening.
Monday, June 22, 2009
10:30 - time for a break
Coffee Fueled writing
According to William James, Truth is a condition that happens to an idea through the course of events as experienced and analyzed by human beings. Truth is not a stagnant property inherent in an idea, apart from the process of its emergence in history and and from its possession by human beings interacting contingently with each other and with the larger natural world.