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Crisis in California; Canadians Take Note
By
Bob Orrick
For all intent and purpose, the State of California is broke. According to news reports, the "end of the economic boom" has left California more than US$21 billion in the hole. Even in today's inflated prices, that is a heck of a lot of dollars in debt. It is almost as much as some basketball players make. Seriously, it is enough of a financial hole to cause the state's governor, Gray Davis, to declare "the situation a fiscal crisis." He warned that the state's citizens face "sweeping package cuts to education, health and welfare schemes" in the upcoming months "to try to balance the books."
Could that happen in Canada? Could Canadians wake up one morning to find that the federal government is broke? Or, could the residents of a Canadian province find that they are facing sweeping package cuts to education, health and welfare? Have those cuts already taken place in some provinces? Rhetorical questions to be sure but questions that should give rise to concern on behalf of Canadians from the Atlantic to the Pacific to the Arctic.
The speaker of California's assembly is quoted: "It's a hole so deep and so vast that even if we fired every single person on the state payroll -every park ranger, every college professor and every highway patrol officer - we would still be more than $6 billion short."
The state's schools have been advised that their budgets will be cut by $3.1 billion and that more than 35,000 teachers face being fired. Perhaps the cruellest cut of all is in the area of toilet paper. Parents have been told that the school will no longer provide toilet paper to students; parents will have to send rolls of the stuff to school for their children's use during school hours.
The crisis' approach was unseen by many of California's residents. Until the "meltdown" arrived, few had any inkling of the crisis facing the world's fifth largest economy. That comment should send a shudder through all taxpaying Canadians. If it can happen - and it certainly has - in California with a huge economy, it could happen to a Canadian province or even to the country. How did this happen to the 'Golden State?' Perhaps the answer lies in the following report.
"Under its constitution, California is not allowed to run a deficit. Democrats, who control all the state's assemblies, are demanding tax hikes, but Republicans insist the aim should be to attract new businesses not to tax them, and want services cut further." From that, we learn that the Democrats want to tax existing businesses while the Republicans want to bring in new businesses. If that is the case now, it probably was the case previously; hence, the state's $21 billion red ink hole.
It seems to be a classic case of spendthrift socialists versus business-oriented conservatives. The socialists want to spend, spend and spend the country/state/province into the red, while the conservatives want to exercise their entrepreneurial spirit and bring more businesses into the country/state/province's economy. In Canada, this is particularly so; on the one hand, the socialists want to tax more and more to gather the dollars needed to spend more and more on specious programmes while the conservatives want to increase the tax base in order to garner more tax dollars to provide the services the public demands. In California, it seems that the socialists - the Democrats - won the battle and the citizens of the state will now have to pay the socialist piper.
Could it happen in Canada? Most certainly. Look to British Columbia where the socialists taxed and spent, taxed and spent to the point that the province was teetering on the brink of catastrophe when the NDP's luck ran out and the wiser electorate among the province's voters said enough and turfed out the spendthrift socialists from office. The tattered economy has been inherited by a conservative-style Liberal government. The people of BC are daily living the "sweeping package cuts to education and health" as the current government tries to right the wrongs that the NDP foisted on a sleeping electorate.
Look out California, your rough ride is about to begin in earnest.
Bob Orrick is a private tutor of English grammar, literature, poetry and Canadian history to off-shore youngsters. His pupils hail from such places as Taiwan, China, Japan, Hong Kong, Korea and Venezuela. He was previously in international marketing, was a ministerial assistant to a provincial cabinet minister, spent a few years as a reporter then editor of a community newspaper and enjoyed a career in the Royal Canadian Navy.
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