The State of California is now less than 90 days away from a financial collapse that can only be averted by acquiring new sources of loans or dramatically slashing government-funded services in health care, pensions, welfare and education.
The cracks of financial insolvency are starting to show, and Newsom has no plan that doesn’t lead California into anarchy and destitution.
In a desperate effort to delay the financial collapse, Newsom has ordered the state’s EDD to delay unemployment checks for as many months as it takes to preserve the state’s rapidly-dwindling funds. The Mercury News reports that nearly 2 million Californians have yet to receive unemployment checks covering the first three months of the coronavirus lockdowns, which began in mid-March:
The brutal backlog is further evidence of the troubles plaguing the embattled state Employment Development Department, prompting the newly jobless to complain of an overwhelmed phone system and antiquated technology. The first-time claims have gone unfilled even as Gov. Gavin Newsom has promised reforms and increased staffing for the EDD.
“I have done just about everything I know how to do as a public official to make things work, but my colleagues, my staff, my constituents and I are at our wits’ end,” Assemblymember David Chiu, D-San Francisco, said in a tweet.
Gov. Newsom has been skimming billions from California taxpayers to fund a massive network of bribery to stay in power
Sources tell Natural News that Gov. Newsom has been skimming billions of dollars from California taxpayers, laundering it through communist China under the false pretense of purchasing coronavirus masks.
Chinese companies launder the money and then wire funds back to shell companies controlled by Newsom, who is using the funds to pay out hundreds of millions of dollars in straight-up bribes to California officials in order to suppress any investigations into honest financial accounting.
This is why the recent $1 billion mask deal with China has been shrouded in secrecy, as Fox News reports:
California Gov. Gavin Newsom is facing pushback as state lawmakers have begun demanding details of his nearly $1 billion deal to receive 200 million masks per month from a Chinese manufacturer.
“It would be great to get a heads-up directly from the governor’s office rather than watching it on national TV,” Assembly Budget Committee Phil Ting (D-San Francisco) said in an interview Wednesday with the Chronicle.
“We don’t have any information as to how many masks we’re buying, who we’re buying them from, at what price … What are we obligated? For how long are we obligated?”
As a result of the skimming, bribery and fraud taking place right in the middle of a coronavirus lockdown collapse, California has now run out of money. And since the state can’t print its own fiat currency (like the Federal Reserve can), it can only survive by either slashing expenses or acquiring new funds through loans, bonds or raising taxes.
The delays in California’s unemployment checks, we’re told, have nothing to do with a lack of personnel to process the payments. Rather, the checks are being deliberately delayed because the state has no money left to fund the unemployment program.
Similarly, recent cuts that have been announced for police departments are really about slashing cash outflows in order to try to keep the state afloat. Many police departments are funded by a combination of city and state funds, and the Los Angeles City Council recently voted to slash $150 from the LAPD budget, bringing the number of police officers down below 10,000, which will unleash a wave of violent crime across L.A.
A closer look at California’s state budget reveals a shocking picture of financial collapse
California’s state budget is around $208 billion for 2019 – 2020. About $80 billion is spent on radical left-wing indoctrination centers known as “public schools” (although not all of this is state-level spending, some of it is local).
Over $100 billion in revenues are generated by the California state income tax. Another $27 billion comes from from sales taxes, and $13 billion comes from corporate taxes. California’s general fund took in $143.8 billion last year and spent $147.8 billion in 2019 – 2020, showing that the state had been eating into its safety net of funds even before the coronavirus hit. In all, the state had about $19 – $21 billion in reserves before the coronavirus hit.
Now, thanks to Gov. Newsom’s coronavirus lockdowns, California’s revenue sources are getting hammered:
- Lower property taxes at the local level due to businesses and retailers going bankrupt.
- Reduced state income taxes due to fewer people working.
- Lower sales taxes due to reduced consumer sales.
- Lower corporate income taxes due to corporations losing revenues.
- Severe losses in energy-related revenues (taxes) due to the collapse in energy markets.
In addition, the vastly increased payments the state is making for unemployment benefits and other programs is adding to California’s financial woes.
It’s all summed up by this CNBC headline from May 7th, 2020: “California faces a staggering $54 billion budget deficit due to economic devastation from coronavirus.” As the story reports:
California will have a budget shortfall of $54.3 billion because of the economic devastation wrought by the coronavirus, Gov. Gavin Newsom’s administration announced Thursday, a stunning reversal for a state that had a $21 billion surplus a year ago.
The Newsom administration estimates state general fund revenues will decline by $41.2 billion compared to the $222.2 billion spending proposal Newsom revealed in January. Plus, California must pay for an extra $7.1 billion for increased enrollment in some social safety net programs, including Medicaid, the joint state and federal health insurance program for the poor and disabled.
Another $6 billion in anticipated emergency spending on the coronavirus for things like protective gear, hotel rooms for the homeless and cash payments for low-income adults living in the country illegally pushes the projected deficit past $50 billion.
Meanwhile, lawmakers are already being asked to bail out the state’s essential industries. California hospitals say they have lost up to $14 billion by postponing elective surgeries and other procedures to make room for an anticipated surge of coronavirus cases that never happened. On Monday, the California Hospital Association asked lawmakers for more than $1 billion in aid.
California is broke
In other words, California is broke. The state blew through its “rainy day fund” in just a few weeks of the coronavirus lockdowns, and now California is reeling from the financial costs associated with the coronavirus lockdowns that Gov.
Newsom seems determined to continue indefinitely. In other words, the Governor of California won’t let California get back to work, which means the $54 billion in losses is just the beginning of the financial carnage yet to come.
By the time 2020 is over, it’s no exaggeration to say that California may be $100 billion in the hole due to coronavirus lockdowns and bailout costs. On top of that, with the news now reporting that upwards of 28 million Americans may be homeless over the next few months because they can no longer make mortgage or rent payments, California is about to experience a homelessness problem that has never been witnessed before in the history of the nation.
Imagine millions of new homeless flooding the streets of San Francisco, Los Angeles and San Diego, adding to the homelessness problems that already exist in those cities.
It’s becoming abundantly obvious that the only way California can remain economically viable is to start raising taxes on its productive citizens, more of whom are fleeing the state due to insane left-wing policies, outrageous authoritarian regulations and punitive taxes on those who produce.
As Newsom hikes state income taxes, fees and sales taxes, those who earn money (rather than collecting free money) will increasingly leave the state, leaving behind the non-producers who never contribute any funds to state revenues.
The vicious cycle repeats year after year, until California is reduced to a collection of crime-ridden tent cities inhabited by obedient left-wing homeless people whose only role in society is to fill out multiple mail-in ballots and keep the corrupt Democrats in power.
Fiscal sanity is ancient history in California, and the criminality and corruption of Newsom, Pelosi, Feinstein and other power brokers throughout the state is so outrageous that there’s hardly a California senator, mayor or governor who doesn’t belong in prison, charged with treason.
What will happen, exactly, when California runs out of funds in the months ahead? The state can continue to delay payments to entitlement recipients and pensioners, kicking the can farther and farther down the road in the hopes that an economic recovery might bring a new surge of tax revenues into state coffers. Or the state can try to borrow money by selling bonds or winning loans from foreign nations.
Agenda21Radio.com reported in March that California had sought a $1 trillion loan from communist China, but sources tell Natural News that President Trump nixed that loan arrangement, as allowing an enemy nation like China to loan money to an entire state would obviously compromise national security.
But the timing of the request from Newsom — March of this year — shows that Gov. Newsom was fully aware his state would run out of funds very quickly as the coronavirus devastated the California economy (and therefore government tax revenues as well).
Reference: Collapse.news (excerpt)