What is means is that California will have to reduce their spending. And as so often is the case, as California goes, so does the rest of us. Initially, some of the more essential services will be cut, partly because those are the larger and easier to cut expenditures, but also to put a real good hurt on people in hopes of forcing them to pay even more to bring the budgets back in balance. But eventually they will redo the budget and put the money where it really needs to go, and cut out the things that they shouldn't have been paying for in the first place. Eventually, the bureaucracy will shrink and the government will become more efficient.
I got a kick out of the California governor when he said, essentially, "The people of California are in for a rude awakening. They keep demanding all these services, they want it all, but they refuse to pay for it."
That's both a threat and a fallacy. The threat is that the core essential services will be cut. The fallacy is that the majority, or even a large minority, have demanded anything other than the basic core services.
The bulk of the people don't want to foot that bill any longer, the are sick and tired of being the personal ATM of runaway government spending.
In some ways, he's telling the truth, though, as "citizen initiatives" in voting placed warm and fuzzy feel-good propositions before the voters that mandated the government spend money on this or that thing, one of which was a sweeping program for children, but then the citizens who mandated the spending soundly voted down the tax increases to pay for them. The votes for the proposal had significantly fewer total votes than the votes against the taxes to pay for them, incidentally.
The government needs, and will have to, go to a zero-based budget where every budgeted item, line by line, will have to be gone over and a decision made as to whether or not that money is being spent wisely. It's the only way to reduce or eliminate waste, fraud and abuse. Abuse like the soft-landing zone for former politicians and bureaucrats where hundreds of thousands of dollars in annual salaries are given to certain boards and commissions where they work perhaps one or two days a month, where a simple per diem for the actual days worked would be much more fiscally responsible.
But fiscal responsibility in waste, fraud and abuse can only go just so far when the budget deficit far exceeds that of the bureaucracy itself. You could instantly eliminate all of California government, fire everyone, close every office, and there will remain a significant deficit, to the tune of $20 billion. The biggest problem comes from the fact that more and more people are taking advantage of the State's "basic" services at the very time that the cost of those services are rising. Like, the spending for the state's Medi-Cal health insurance for the poor has jumped 40% since Schwarzenegger took office. The spending on state mental health services have tripled in the same period of time. It's a classic illustration of "give a man a fish". They're gonna have to hand out rods and reels instead.
Eventually, this will spill over into the rest of the country, into other states, and possibly, into the federal government, to where our governments, just like us, will have to live within their means.
