Manic California – state budget gets worse with projected deficit of $20 billion on the books again. Aging population fastest growing segment in next decade. Disturbing trend of replacing smoking with a double latte.

California has one of the most volatile and wobbly budgets in the nation.  Part of this comes from the inherent structure of the tax system where a large portion of revenues come from fluctuating items like sales tax, corporate tax, and personal income tax that swing wildly like a vine in the wind during recessions.  You also have an intricate system that was built on sunny day projections and that is clearly no longer the case with gaping budget deficits from San Diego up the Pacific Coast to San Francisco.  The State Controller announced this week that last month state revenues were off by a stunning $810 million.  This is hard to fathom even for a state as large as California.  I think it is important to analyze the condition and vital signs of the state to fully understand the future trends of the real estate market.  It is clear that the upcoming years will look nothing like the past.

The volatile nature of the state budget

I’ve been tracking incoming revenues to the state and measuring them against stated projections.  For the first half of the year things did look rosier.  That has changed dramatically in the last few months:

california monthly revenues

Source:  State Controller

“(Bloomberg) California tax collections since the start of the fiscal year have fallen $1.5 billion behind projections, raising concern that the most-populous U.S. state will face automatic spending cuts.

Revenue was $810.5 million less than budgeted in October, bringing the total to 6.2 percent below expectations for July 1 through Oct. 31, according to figures released today by Controller John Chiang. Since the start of the fiscal year, the state has spent $1.7 billion more than it budgeted.”

Needless to say a $1.5 billion lag from already adjusted projections is not good.  Take a look at the chart above and examine how quickly revenues adjusted lower starting in July.  So far the last four months have been brutal on the state budget with the last month blasting a gap to the downside.  The ideal option would be to grow the economy faster and create more revenues but that is clearly not happening.  So you are left with European like solutions to either raise taxes, cut services, or a combination of both.  Both of these seem like negatives for the housing market.

The big lag is coming from corporate and sales taxes:

revenues california 2011

As mentioned the state has now fallen behind by $1.5 billion from recent projections.  Keep in mind this is only the lag in projections.  I’m not sure if people are simply getting bailout fatigue or are psychologically tuning some of this information out but California’s budget situation is still in a precarious situation:

“(State Controller) The State ended last fiscal year with a cash deficit of $8.2 billion. The combined current year cash deficit stands at $20.3 billion.  Those deficits are being covered with $14.9 billion of internal borrowing (temporary loans from special funds) and $5.4 billion of external borrowing.”

In other words gear up for more contentious budget battles ahead for the largest state in the nation.

The demographic trend for California

The nationwide trend of baby boomers entering into retirement does not escape California.  In fact a large segment of growth will come from this cohort:

california population growth

Source:  LAO

This development is likely to have a negative impact on housing because baby boomers if anything will stay put or will look to downsize.  The starter home buying group of 25 to 44 shows relatively low growth in relation to other age groups.  We’ve never had such a large and older population in the state.  How will the market deal with this?  Keep in mind that the first baby boomer was born in 1946 with the last in 1964.  A large part of growth came from this group having strong buying power in an era where the economy was booming hand in hand.  Those favorable demographic trends are no longer present.

Older Americans will need smaller homes as children move out and will demand more healthcare services.  You also have many younger Americans moving back home because of the weak economy.  So it is hard to see how this trend will somehow be a large push on home values upward.  To the contrary this may keep a lid on prices especially with many younger Americans earning less and carrying much larger amounts of student loan debt.

Californians have traded the cigarette for a Starbucks double latte

One good piece of news is that overall there are fewer Californians that now smoke compared to 1989.  In 1989 over 22 percent of Californians smoked (aged 18 and older).  That figure is now solidly below 15 percent.  However, obesity now seems to be an epidemic with 25 percent of those 18 and older being labeled as obese versus 10 percent in 1989:

smoking and obesity

Obviously obesity and smoking are both large health concerns so the money saved from not smoking will probably be canceled out by the other health issues brought on by being overweight.  Part of being productive also comes from being healthy.  You have to wonder what impact this will have on the future of California.

Demand for homes

While the population keeps increasing the demand for lower priced housing options grows.  The need for more expensive homes is largely not in the cards for California:

california housing starts

Housing starts collapsed in 2005 and have not recovered since.  Parts of the previous trends reflect this new market for the state economy:

-Older downsizing population

-Younger less affluent population

-Demand for affordable housing

-State budget will push more cuts, taxes, or combination of both

Add into the mix the large shadow inventory in the state and you can understand why it is hard to be bullish on California real estate.  Show me growing households wages and an employment sector adding good paying jobs and then we can have the debate why high home prices makes economic sense.  The current data is showing us more reasons to cautious when it comes to California real estate.

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70 Responses to “Manic California – state budget gets worse with projected deficit of $20 billion on the books again. Aging population fastest growing segment in next decade. Disturbing trend of replacing smoking with a double latte.”

  • If builders want to sell homes, I think just about the only thing that would appeal right now is multigenerational housing, like this

    http://www.drummondhouseplans.com/multi-generational-and-extended-families.html

    I hope to have a setup like this in the future

  • The message of “empty pockets” is largely ignored. Teachers in Almeda,CA are complaining that the school board wasted a $1,000,000, one time surplus, by buying textbooks with the money, instead of giving teachers bonuses.
    Teachers did get a cost of living raise of 1% to 5% this year . But they do not consider that a raise, because there was not an additional raise on top of that, as in years past.

    • Interesting, so 1-5% is not considered a raise? I’d enjoy that raise for sure! Bust the teachers’ unions–they do no good for students and little for teachers; they only enrich the unions.

      • By enriching themselves you mean they dont provide collective bargaining or fair representation and all that needless stuff. I hope the super commitee dismantles all federal aid to states for education, better that than maybe cut our bloated military machine, heaven forbid we produce high school graduates as smart as eight year olds in China. Ive yet to meet an overpaid teacher.

    • In a few words, the rest of us didn’t get raises. I’m a self employed cpa/appraiser, my pay went down. So I feel no sympathy. I do believe that books are a good investment, as long as someone thoughtfully picked them out.

      This whole battle is over the public secotr sucking hte life out of hte rest of us. Enough is enough, and I’m a progressive independent.

      • Dude teachers are mostly underpaid. They spend their money buying supplies for their classrooms because the school districts don’t give them enough to stock basic stuff like SOAP so the kids can clean their hands and TP so their students can wipe their butt. I know some blowhard will reply with some BS statistics about teachers being overpaid but it’s just not true. Name me one overpaid teacher you personally know. One that isn’t working hard enough for their salary. Adminstrators? Well we can certainly talk of their bloated salaries. But teachers? Don’t believe it for a second.

        But what the hell. I work in the private sector and boo hoo. I still regularly get raises. Hate me instead. Leave the teachers alone.

      • Gael…teachers, at least in LA county, are doing very well especially compared to the rest of us. Median salary is $72,000 grand. Upper tier is close to $100,000 with three months off, retirements, full medical, etc. They are doing well and have no right to complain.

      • Stop it. I know lots of teachers. None of them make anywhere near youR quoted salaries though they should.

      • @ Yoga Gurl:
        Google is your friend and your statements about teachers salaries are false. Please see:
        http://www.glassdoor.com/Salary/Los-Angeles-USD-Teacher-Los-Angeles-Salaries-EJI_IE111599.0,15_KO16,23_IL.24,35_IM508.htm

        which lists the average teacher salary in Los Angeles at 48,000 a year

        or
        http://www.teachinla.com/whyteach/salary.html

        which shows that with ten years experience and a masters degree one can make 69,000 a year. How many do you think fall into that category given the high turnover rate in that profession?

        You either have your figures confused with administrators salaries or are just a lazy misinformed liar.

        Three months off a year? You begrudge teachers three months off a year. I get three months off a year too in my position as a artist. Jealous?

  • 45-64er here!

  • Sounds like we’ve traded lung cancer for diabetes. May be a wash.
    The demographic problem is all over the US. 78M people are 50 or older now.

    Don’t worry, green tech will bring back high paying jobs………………

    • Trading lung cancer for diabetes is not a wash. Lung cancer patients tend to die relatively quickly. Diabetes is a chronic disease that will bleed the taxpayers for decades in stead of years.

  • “Loans from special funds”

    A euphemism for borrowing from CALPERS and just in time for half the population to be retiring! Better raise taxes on that medical marijuana marker fast…ROFL.

    • They can’t borrow from CalPERS. It comes from Special Fund agencies that either got funds from the Fed, or have their own revenue from fees, etc.

  • Reckoning? Consequences? Debt payment? How quaint, how 20th century. We’re in a new era now where there are no consequences and laws are enforced only when convenient. I expect the day will come when this web site and others similar will be replaced with a message “Closed by order of the Departartment of Homeland Security”.

    Welcome to George Orwell’s worst nightmare.

  • Yet they have enough money to provide college educations to illegal immigrants, and want to build a $100 billion train to nowhere.

  • If nothing else, it sounds like the Cali State CONtroller (fomerly the COMPtroller) is singularly INEPT at forecasting revenues for even the nearest term futures, suggesting one or more of the following:

    a) He’s a completely isolated ivory tower type, totally detached from “reality on duh ground”, and dependent on similarly clueless overpaid, over-pensioned underlings feeding him “impressive” and “officious” .xls files up the wazoo; (Guaranteed his staff/dept. could be axed by 50%, and not affect the quality of his “product” in any demonstrable way.)

    b) “Turf” keeps him from even casual contact with The Federal Reserve in SFO… or anywhere else for that matter. The Fed’s online indices are NEVER as far off as this clown Chiang and his crew;

    c) He’s a tool, completely “pwned” by the FI.R.E. Cartel. :wink:

    I’m sorry, what were the TAILwinds for CA housing again? Interest rates, was it? :roll:

    PS: Doc, nice public health sidebar on unwise inhalation v. unwise ingestion… lol.

    • This happens all the time. In “good” times, they ramp up spending. They look at government receipts and extrapolate the upward trend to infinity. And then, the crash happens and we’re stuck with high spending levels with low revenue collection. It’s as if the State’s economists have never heard of the business cycle. The worst is how politicians support certain propositions as part of their re-election campaigns. The props are always filled with misinformation and usually written by interest groups. No matter which way you vote on these, CA always loses.

      • “…………they ramp up spending”

        Yeah, they ramp up spending, because they don’t want to cut tax rates during good times. I can sort of sympathize, since it is so difficult to turn around and raise taxes.

        A sort of compromise would be to hire temporary workers during boom times, with no benefits. Tell the temp workers straight up-this is a TEMPORARY job with no benefits.

        Instead, they hire people with full benefits and they are difficult to fire.

      • What they need to do is set up a monster sized rainy day fund in the good times, and spend it down in the bad times. Unfortunately, because it will be ruled by politicians rather than technocrats, it cannot work. One party will see the fund as proof we tax too much in the good times. The other party will spend the money in good times before it can go into the fund.

        The kids need adult supervision near the cookie jar.

  • This data clearly shows that the second leg of this depression has started. Talk about ugly tax revenue numbers from corporate and sales taxes.

  • Is the cabp1fh chart in 1000s? If it isn’t then Bakersfield by it’s self was half the new construction in 2005 and a quarter in 2010.

  • I left CALI because of the excessive income and sales taxes. I hope they drain CALPERS then file for bankruptcy. The public employee unions are as the center of all their spending problems.

    • The State of California cannot touch CALPERS by law. Gov. Wilson raided CALPERS to balance the budget. He paid it back quickly. A ballot measure was passed making it illegal for the California government to touch CALPERS.

      An independent audit shows CALPERS will run out of money in CALPERS will run out of money in 2031.

      Many agencies are going to a reduced retirement benefit for new hires. CALPERS simply raises the rates paid by cities and counties as they look into the future.

      CALPERS is not connected in any way to the state burget. It is independent.

    • Total expenditure of the retirement amounts to 3.6% of the state budget, try the Fox Repugnantcan fear mongering on another angle. It is a race to the bottom for the working class, and with the numbnuts who vote out there, it will be over quick. Take EVERYONE’S pensions and only allow the rich to retire, as they are the only ones who deserve it …right? The only people who they won’t take pensions from are….drum roll please, the people who are ARMED, the police and the military. (See folks, the 2nd Amendment *IS* important)

      Personally, I can’t wait till things start burning and people start dying, THEN, and only then, will the majority of numbskulls stop voting against their own interest (that is if martial law isn’t invoked, and it will be). The majority of americans BELIEVE the media. Look around folks, use your critical thinking. On second thought, don’t think, just find someone to blame, someone you dislike or hate, yea that’s the ticket.

  • It seems perfectly reasonable that the State’s take varies with the fortunes of the people.

    Why should the governments take remain the same (actually increase of course) no matter how much the States policies impoverish the people?

    • The problem is at they yoyo more then the income of the average citizen. The state doesn’t get to tax the basis cost of the investment, so their income is really based on the first derivative of the stock market. It is as if the state retroactively takes out an option to buy stock at whatever you paid for it and exercises that option when you sell. When the overall market is down this component of the tax revenue drops like a stone. Because the state can’t accurately forecast its own income, it must bear additional costs to secure financing, in tough times.

      The article just points out that the real effect of prop 13 was not to lower taxes – we have higher income and sales taxes to compensate – just merely to make tax revenues less predictable. The state isn’t capable of buffering the business cycle with extra spending when things go down, because it’s finances go south at the same time.

      If more of state revenue was raised with property taxes, the state would be helping the economy now rather an being a further drag on it.

  • I just returned from a trip visiting my parents in Sarasota Florida… The foreclosure “crisis” has the vacancy rate at an all time high in SW Florida, but the builders are starting up with new subdivisions. They seem to believe that the boomers will follow their parents footsteps and buy a new house for retirement. No mention of how those boomers may be upside down on their current house in OH, MI, NY, IN, IL or the glut of empty houses sitting ready from the last boom. Add in, the continuous churn of decent houses when the current elderly pass this mortal coil and we have the makings of an Epic housing glut. South Florida is going to be a disaster that will rival California’s inland empire.

    • A relative made up their mind to move to the Tampa Bay area of Florida a few years ago. They shopped around for a year, and were amazed at how soft prices for condos were, and eventually bought. Now, a year and a half after purchase, they are even more surprised at how soft prices are, as they have fallen significantly more.

  • “baby boomers stay put” will keep prices up, supply/demand. Old folks can be stubborn and just stay put if the price is not right. In Burbank, half of the listings expire with the old folk not lowering the price.
    On the state budget. The biggest demand for services are people with children. Education is very expensive, even if we fund it as well as a poor Dixie state. Old people are not fond of paying taxes to school somebody else’s children from Mexico or etc.
    Don’t worry about the revenue deficit. It is only 6.5% or a few billion. California’s GDP is close to $2trillion(8th largest in die Welt), so a few billion is insignificant. If we would tax the underground economy in California, that would take care of the deficit. “What is largely fueling the underground economy, experts say, is the nation’s swelling ranks of low-wage illegal immigrants. The best guess as to the size of the output of this shadow economy is nearly 9% that of the real economy. It has passed $1 trillion nationwide. “”We have had an 85% taxpayer compliance rate,” says Nina Olson, the IRS’s taxpayer advocate. “I expect the number to decline,” because the portion of employees subject to withholding is on the wane. Such employees are 99% compliant with tax laws, she says, but in the 21st-century economy, “More and more people are being treated as independent contractors. We are losing people from the withholding environment.”

    http://www.asustainableusa.org/must_read/mctague010305.html

    • What about the grim reaper? Are these boomers so stubborn that they won’t show up for their own funeral?

      • I saw my neighbor with the “toe tag” in the coroner’s station wagon. Old folks are stubborn. The house was sold to a foreigner(Oklahoma person) who paid($527k) way too much for the place. The kids were happy, they were living in North Dakota. The Okie gutted the house and put $200k into it. I don’t understand these Okies. I sure it makes sense to them. The neighbor(in his 80′s) on my other side took his last ride on the paramedics red truck(we all waved good by to him), his wife remains. Some people live into their 90′s. Don’t try to wait them out. You will be old by then.

      • Silly me, I completly forgot about the Rich Okies…. I will pass that one on to BOB MAX….

    • I do believe that the Prison budget is about the same size as the Education budget now. Thanks to all those who clamoured for the spectacularly unsuccessful get-tough-on-crime laws.

      And that’s a sorry statement about our future and where we are headed.

      • Well said…not to mention the less we educate the young, immigrant or not, the more we will see crime rise in the future and the more we will spend on prisons. If you look at ANY unstable country the common problem is an uneducated populace. I know some are against educating immigrants and for paying when they don’t have kids but everyone needs to realize the best thing we can possibly do for the future is educate the young.

      • Yes, I prefer to be robbed by an educated person way over a high school drop out! Now, a college grad taking my money, that is almost legal (i.e. Lloyd Blankfein)…

      • Questor, it’s more about the prision union more than anything. Because of them it takes close to three times the amount of money to incarcerate someone than in other states. They are the reason it’s become so expensive.

      • @Yogi: I agree that the Prison Union is a very significant force. But it’s more than that. It’s the politicians waving a bogey man in order to get re-elected. And funded not only by the Unions, but the Corporate Corrections industry as well. All pigs feeding at the trough of the taxpayer. With the taxpayer willing to fund and elect this nonsense, and even cheer it without thinking.

        The theme here is the common one of the Boomer generation (of which I am sadly one). Namely, the hell with our children and their future; as long as I get and keep mine now.

        How you can look your kids or grandkids in the eye with any sort of honesty, while stealing their future just to maintain your lifestyle, is beyond me. And yes, I’m talking about those who rag on the Education field; never, ever do I hear a peep of protest from such idiots about the Prison industry.

        Perhaps the next step such people are willing to stand up for is Fascism in order to fund their lifestyle. It’s certainly your next logical choice, since more people getting poorer.

        If you don’t like it, then stand up against the bogus get-tough-on-crime industry, and work on building a better place for your kids, instead of taking it away from them. Perhaps then you can look them in the eye as a guardian, instead of as a predator.

      • It’s also simply wrong. The stats on crime are quite plain: taking criminals off the streets reduces crime. There is no avoiding that. The fact is, the chances of being a victim of violent crime in this state has decreased in direct proportion tot he growth of the prison population.

        A considerable portion of that population are not supposed to be in their country at all. So which is more costly? Effective border control or having lots of prisoners? We can try to prevent our children from becoming future inmates but there isn’t much we can do about the failed nation next door and the influx of criminals from there.

    • “we are losing people from the withholding environment”

      Lol — obviously a sign of a sustained economic recovery.

      “Don’t worry about the revenue deficit, it’s only…”

      Lol again — are you really a CPA? Not worrying about deficits is largely what got us to this point of tragedy. Pretending that a problem doesn’t exist is not a rational solution.

      • Jon, I am glad that you have a sense of humor. That is one thing that they can not take away from us. As a Hispanic CA Democratic state senator said, she has to explain to her voters that government benefits cost money and have to be paid for with higher taxes. The voters like the “free” benefits but they do not want to pay for them(they want you to pay for them). If they have to pay for them, they are unhappy. They state can play accounting games only so long until they run out of actual cash to pay the bills.
        The Governor will let the automatic cuts kick in, in January. If the people don’t like the cuts, they can clamour for higher taxes.
        The first tier of cuts, if the shortfall is $1 billion, would trim University of California and California State University budgets by $100 million each, increase community-college fees by $10 per unit and cut in-home services for the elderly and disabled who claim to need help.
        If the gap widens to $2 billion, it would mean a seven-day reduction in the school year to save $1.54 billion and an end to $248 million in home-to-school busing subsidies.

        The trigger determinations will be made in December by the Department of Finance based on economic forecasts for the entire fiscal year (not solely on the revenues received to that point). If necessary, the first-tier cuts would go into effect as of January 1, 2012, and the second-tier cuts would start February 1.
        Brown’s finance department said almost half of September’s decline was a timing issue, because $120 million was transferred to the Public Transportation Account for sales taxes on diesel fuel on Sept. 30 instead of in October, when the move had been forecast.
        http://www.bloomberg.com/news/2011-10-11/california-tax-revenue-decline-inches-state-toward-trigger-cuts.html

    • John CPA said, “Don’t worry about the revenue deficit. It is only 6.5% or a few billion. California’s GDP is close to $2trillion(8th largest in die Welt), so a few billion is insignificant.”

      Accepting your $2 trillion figure, how much of that is federal government spending, direct or indirect? A third, or a half? It is a big chunk, whatever the exact percent. And it is not sustainable, at least not in constant dollars. Like CA and most of the other 49 states, the Federal Government is broke. They can cut back on spending or inflate their way out of debt with debt monetization via the printing press, but the outcome will be the same: much less purchasing power for CA (and the other 49).

      For the last four years, including the current fiscal year (2012), 40% the federal Govt.’s spending is borrowed. This is not sustainable. It will eventually revert to a mean level of something like 10% or 15%. So of the federal govt’s share of that $2 trillion you mentioned, whether it is $500 billion or a trillion, it will drop considerably over the next decade, to about 3/4 of the current size, in the ‘cut spending’ scenario, which would be a drop of 1/8 to 1/4 of a trillion dollars.

      Of course ‘print the problem away’ is the more likely scenario. In that case, CA receives the same, or even modestly more, dollars from Uncle Sam, but the purchasing power of all available dollars drops by 25% to 50%.

      If I were in Sacramento, I would be rethinking the role of state government.

      • Jason, first, GDP means: Gross domestic product refers to the market value of all final goods and services produced within a state in a given period. Federal government transfer payments to SS, SSI, and Medicaid, and etc. does not factor in. The five largest sectors are financial services, followed by trade, transportation, and utilities; education and health services; government; and manufacturing. California’s economy is very dependent on trade and international related commerce accounts for approximately one-quarter of the state’s economy. Agriculture is an important sector in California’s economy. Farming-related sales more than quadrupled over the past three decades, from $7.3 billion in 1974 to nearly $31 billion in 2004.In 2008, California’s 81,500 farms and ranches generated $36.2 billion products revenue. Recently, the San Joaquin Valley was characterized as one of the most economically depressed regions in the U.S., on par with the region of Appalachia. Many coastal cities (the bubble cities)include some of the wealthiest per-capita areas in the U.S. In 2010, there were more than 663,000 millionaires in the state, more than any other state in the nation.(courtesy of Wikepia)

      • John CPA, I know about the state’s agricultural progress. But these tend to be low paying jobs, at least on the production end. No home buyers there, except the ‘mobile’ variety, if you get my drift.

        But back to GDP. The GDP of the entire USA is $15 trillion. Almost 10%, about $1.4 trillion, is deficit spending on the part of the federal government. And that is the official line. According to John Williams, of shadowstats.com, if the federal government used GAAP accounting (your favorite kind, I presume) the annual deficit would actually be $5 to $7 TRILLION at the federal level. That would be 33% to 45% of our nation’s GDP!!!!

        The bozos don’t count off budget, black box military spending, they are underfunding federal pensions, and play other accounting games. This is not sustainable. Think, for example, how dependent CA is on military spending. Sooner or later it will drop significantly, either by budget cutting or by inflation eating away at the buying power of our money. There won’t be any significant recovery for decades. Look at Japan, 22 years and counting………..

  • Went to the big box home improvement retailer (the one with orange signs).
    Something new happened- in the parking lot, I was stopped by two people, who offered to install carpet, cabinets, etc. saying they could beat the prices of this retail store by using supplies and items that are NOT bought from there.
    Why would any retail store would allow people to roam their parking lots, taking their customers before they could enter the store, is beyond me. Is this some new kind of reverse marketing.??

    • That’s how close to the bone Evil Orange has cut their staffing. Did you have to round up your own cart from the parking lot? You could sell PORN in their parking lot, and it would be a customer calling 911 that finally shuts you down, not any clue by in-store mgt. Finding ANYONE in the aisles who KNOWS ANYTHING, beyond which shelf something is on, seems worse than ever. Is it because all the GenCons are getting juicy unemployment bennies?

      First pass, I patronize my Mom & Pop H/W when at all possible… still, when “stuck” @ 8pm Sunday night, I will slink into Duh Big Boxes… ;’)

      Not sure why the hard-hustling day-laborers were pointing out they did NOT buy their consumables from E. Orange… was it to brag they had wholesale/jobber status, or…? Do tell us the details.

  • That smoking vs. obesity chart just proves that you’ll put on a few if you quit.

  • The problem with cpytocracies and the the thieves we elect, is that they just can’t keep their mitts of the money when times are good. It’s an old ploy, “I’ll give away to you what isn’t mine so you’ll re-elect me” and so it goes.

    I think it gets down to we can support our elderly who paid into the system or the illegals who broke the law, swarmed across the border from thier failed states and are now wrecking ours, including overloading the system by breeding like there is no tomarrow.

    So, what’s it going to be, we can’t afford both.

    • The illegals will take care of our elderly….

    • ZING! Needed to be said.

      What’s really tragicomic is the clueless peeps who leave CA because of these failed feel-good policies, move next door to Conservative AZ, and start voting for the same non-sustainable crap there!

    • Awwww, illegals got you down? Funny no one seems to want to step in and do their job in Alabama. I’m sure all the farmers in CA hope the state takes your advice. It’s not like they lured them here or anything with promises of a job that pays so little that citizens wouldn’t dream of doing it. Oh and just so you know. If they have a kid here that kid is a citizen and that is the law. Deal with it racist.

      • TheNumbersNeverLie

        Racist? You gael, are the racist.

      • …and the irony is, within another generation or less, the place to which the parents have come and bred is going to be as shitty as the one they left.

        Wherever you go, there you are, enjoy your conquest.

      • Gael, Im a mexican dual citizen (Born here but applied and was granted), My mom was a national met my dad at the University in Mexico city in the 50′s. I would say im much closer to the issue than most and of course am not a race hater. However the truth of the situation as it is now, is that the march north is much more a calculated march, in Mexico all the tricks and gimics are discused and fully operational starting from childhood. It is felt there that this administration will give an amnesty and a tightening of the border as concession.
        Without a doubt it is really expensive to educate, medicate and incarcerate people, a lot of people that dont produce anything near what they suck out of our systems.
        Im all for a guest worker program that grants dignity and a path in for those that earn it, meaning they show themselves to be decent and law abiding for a few years. But if we blow the doors open, you will find that most of your fellow man from down south are going to show up with their hands out and with that entitlement attitude in a huge way.

    • Apolitical Scientist

      While I suspect you meant “kleptocracy” I rather like the idea of a cryptocracy and suspect we are living in one more and more every day.

  • Come to Baja the weather, housing, and cost of living is wonderful down here. You see mexicans live by a very simple motto: You are what you own not what you owe.

    • luis, it only works one way. Mexicans come here. Mexico does not allow foreigners to come to their country that easy. To get a FMM The income requirement is — a monthly income from outside México equal to 250 times the basic minimum wage in México City, there are other requirements as well as the bribes. Not that any Gringo would want to even visit Mexico with the drug gangs running the towns and beheading the teachers. What a basket case. It is coming to SoCal.

      gael, yes,you know about the racket of Pregnant Mexican women coming to SoCal illegally to drop one that is paid for by Medi-Cal(taxpayers) and then be an anchor baby for all the taxpayer benefits. What a fraud. We are on to you. Ice will come a knocking.

      I don’t know about Alabama. But the “Bloods” are not happy about the illegal taking their jobs, legal and illegal. My good friend Tyrone says, “with national unemployment hovering around 10 percent and black male unemployment at a staggering 17.6 percent, it’s just not true that undocumented workers are doing the jobs that we won’t do.” Audrey Singer is a senior fellow specializing in race and immigration at the Brookings Institution. She agrees that blacks are disproportionately hindered by illegal immigration. http://www.theroot.com/views/how-illegal-immigration-hurts-black-america

  • California should just raise the sales and income taxes again.

    But go BIG this time – bump both up to 15%!!! Budget problems solved solved for at LEAST the next two years. Then, when the Teachers and Prison Guards manage to soak up all of that windfall, we can repeal Prop 13 and raise the annual house tax up to, say, 3% anually, to rise by at least 5% per year regardless of whether the market value of the property increases or decrease.

    In this scenario, everyone would win – all the government workers are happy. Anyone who is not can just leave the state (by the millions). Housing on the Westside of LA will finally start to plummet in earnest.

    And the best part: far less surfers crowding up the popular spots. Just be set to live in that van down by the water. Until they start hiking the Vehicle License Fee of course.

    Seriously folks, how else are we supposed to

    • This proposal has merit. For the few of us left in the state, we will be left with inexpensive housing, ready jobs, and finally an end to crowding in this the most beautiful of the lower 48 states.

    • i think you just described France’s model. They have but one good surfspot, which is rarely crowded.

  • As an Indian reader of this blog, I found this article in our local newspaper amusing. The hunt for suckers is on:

    http://timesofindia.indiatimes.com/nri/us-canada-news/US-real-estate-Smart-diversification-option-for-HNIs/articleshow/10729649.cms

    • The article makes me want to invest in california real estate, actually. I wish they would right practical, common sense articles like that here in the United States. You never see anything here with that level of detail about how to go about hunting for a property and executing the appropriate legal structures, etc.

  • Indians must get a kick out of hearing whites complain about illegal immigration.

    • Hi Tom. I believe Anon is Indian from india. Some of the Caribbean Islands are called the West Indies. Christopher Columbus landed there in 1492. He believed that he had reached the west of the continent of India.

      It’s been no end of confusion for myself as well.

      I hope this helps. Thank you.

    • Depends how realistic they were about it. There was massive resources on these two continents and thousands of years of opportunity to advance. But it was disease that made the real difference. If not for the massive population drop it would have been impossible for Europeans to become the dominant group. (Disease was also a big driving factor in the importation of African slaves.) Check out a book called 1493 by Charles Mann. It’s becomes very clear that humans had far less control of the circumstances than they’d like to believe. At best, they reacted to problems utterly beyond their control. If there had been vaccination in the 15th Century, world history would be radically different.

  • I think many people are going to take advantage of this scheme if the bill passes. $500000 isn’t much. I think we are looking at a huge grp of buyers from China, India,Australia n Japan…

  • This is one of your better ones, DHB! Thank you!

  • i’m republican. me, jesus and wall street will save you just like that GMO crap everyone is eating

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