Frank: The Coming Economic Shock in California

As we sit at home, watching re-runs of re-runs, seeing the 1978 World Series for the third time in a week, we dream about the end of this national nightmare.  Today we are worried about our jobs, paying bills, seeing our friends and family.  Sadly, we are not even allowed, today, to go to religious services.  Imagine Easter without an early morning service.  Think about the lack of an egg hunt for the kids at the church that is not going to happen.

Brett Baier on Fox News quoted Winston Churchill, “When you are going through hell, keep going”.   As we used to say in Viet Nam, “and this too shall pass”.

But when this crisis ends, what is the world we are facing?

The Coming Economic shock in California 

Stephen Frank, 4/4/20

I am hopeful and of the belief we will realize what is really important—family and friends.  Like you, except for using Facebook, I have not seen my children or grandchildren in a few weeks.  The Saturday dinners that last three hours with friends are now email exchanges.  Joining with those of Faith, either at services or Bible study is now done via Zoom.  Not the same as prayers standing next to one another in a Holy place.

In a matter of one month, our nation went from the most successful and prosperous in the history of the world to a nation in Depression.  In two weeks ten million people lost their jobs.  Government has suspended April 15 as Tax Day, put a moratorium on most rents and mortgages.  The biggest change—for the long term was the passage of a $2.2 trillion rescue bill—with a total cost of $6 trillion.

During the political debate and public discussion one issue was never made—where does the money come from?  Yet another rescue bill is being promoted, at a cost of about $780 billion, for infrastructure—to create jobs and fix our roads and bridges.  Again, no mention of where the money comes from.

Then you have this from California, “We estimate that California’s total state and local government debt as of June 30, 2017 totaled just over $1.5 trillion. That total includes all outstanding bonds, loans, and other long-term liabilities, along with the officially reported unfunded liability for other post-employment benefits (primarily retiree healthcare), as well as unfunded pension liabilities.

This represents a rise of about $200 billion – or 15% – over our last debt analysis, in January 2017.

Our findings may appear to contradict reports that suggest a state budget surplus of about $9 billion. But the state’s spare cash and rainy day funds pale before the mountain of long-term liabilities that California governments at all levels have accumulated. Moreover, if the stock market drops, personal income tax and capital gains tax revenue will decline precipitously, wiping out these surpluses.”  From the California Policy Center.

Yet Governor Newsom claims the State has a $21 billion reserve.  How do you have a reserve so small and unfunded liabilities so large?  You don’t.

Where does this leave us?  Without much complaint people closed businesses, church services, agree to rationing, loss of Second Amendment, at least ten million lost their jobs, our right to assemble is being denied.

We have agreed not to meet with family or friends, use restaurants and linger over a cup of coffee.

Socially, we have given our lives to government.  With the massive expenditures, we are giving our financial futures to government.  My answer is go back to the basics:  Faith and Family.

Government answers are transitory and self serving.  They are set for the masses, not the individual.  In most part government regulations, taxation policy and social policy is set based on ideology.  For instance, government is trying to end religious services and the sale of guns during this crisis—but consider the sale of marijuana and abortions are essential services.

Returning to normalcy, Faith and Family, is not a national movement.  It is a commitment, one person at a time and spreading.  It is being a role model for others, showing what is really important.  Government can not and will not mandate that we return to “normal”.  It is up to us.  While it may be a few weeks before we can go with friends and family to a diner or to church services, we need to emotional plan now what our normal will be.

This too will pass.  Plan now for your family, your faith, for your future.  Don’t let others create it for you.

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.

Comments

  1. Boris Badenov says

    Gov. Nuisance should be getting a touch worried, unless he thinks that his, what the H ever she is, Nancy is going to bail out Kommieforniastan. Tax revenues are tanking, this state is buried in debt and with any luch, Nuisance’s hopes of becoming President may be tanking with it. Even Nancy’s connections may not help him.

    • Cycleman says

      I don’t think Major Nuisance has anything to worry about as governor of California, but hopefully he’ll never see the White House. What they’ll do when this is over is come up with all kinds of taxes for ‘the children’ for the schools and for our safety, and the dumb California voters will vote yes. It’s funny how 1 million union workers in the state control a population of 40 million.

  2. Really??? says

    Anyone notice the contrite attitude taken by Slick? When have you ever seen him say the Trump Administration doing a good job?

    He has actually stated he has made 2 major mistakes in this emergency.

    Something is up and I think the conservative element of the Democrats has had it with this Slick Newbie.

    He also knows that if the economy of the State does not come back immediately after this is over his job and the Democrats are in huge trouble

    • What I think he sees is💲💲💲💲💲! Once President Trump stops the money flowing to California he’ll be back to his same old BS.

      What do you mean “ the Conservative Element of the Democrat Party”, the seven republicans in the state senate would probably qualify as conservative democrats, but no-one in the democrat party is conservative. They were run out of the party long ago.

      You know when the economy comes back, Slick will tax the heck out of us to replenish the revenue he intentionally shut down.

Speak Your Mind

*