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Speech on Federal Loan Guarantee for California [McClintock says Calif. loan guarantee a bad idea]
U.S. Rep. Tom McClintock, R-Calif., 4th District ^ | 2009-06-11

Posted on 06/15/2009 8:26:03 PM PDT by rabscuttle385

Tough Love for California.
House Chamber, Washington, D.C.
June 11, 2009

M. Speaker: Gov. Schwarzenegger of my home state of California has called for the federal government to underwrite as much as $15 billion of Revenue Anticipation Notes that the state has to issue to avoid insolvency.

I think that would be a colossal mistake, and that such an act would not only dig the nation deeper into the hole it is in, but would actually make California’s fiscal condition worse.

Today, California faces a paradox: despite record levels of spending and borrowing, it can no longer produce a decent road system, educate its children, or lock up its prisoners.

Those who blame the recession for California’s budget crisis profoundly misunderstand the nature of that crisis. Even before California’s revenue began to shrink, the state government was running a chronic $10 billion deficit and piling up unprecedented debt.

The recession is merely the catalyst; the underlying cause is rampant mismanagement of the state’s resources. California spends $43,000 per year to house a prisoner while many states spend just half that. California spends over $11,000 per pupil, but only a fraction of that ever reaches the classroom. California has one of the most expensive welfare systems in the country and yet one of the worst records of moving people off welfare.

And that’s never seemed to bother California’s governor and legislature.

They are like the shopkeeper who leased out too much space, ordered too much inventory, hired too many people and paid them too much. Every month the shopkeeper covers his shortfalls with borrowing and bookkeeping tricks.

Ultimately, he’ll reach a tipping point where anything he does makes his situation worse. Borrowing costs are eating him alive and he’s running out of credit. Raising prices causes his sales to decline. And there’s only so much discretionary spending he can cut.

That’s California’s predicament in a nutshell. California’s borrowing costs now exceed the budget of the entire University of California and the reason for the loan guarantee is that their credit is exhausted. They have just imposed the biggest tax increase by any state in American history and it has actually reduced their revenues and made their budget gap wider.

Although there are many obsolete, duplicative or low priority programs and expenditures that the state can – and should – abolish, there aren’t enough of them to come anywhere close to closing California’s deficit without directly impacting basic services.

Sadly, California has reached the terminal stage of a bureaucratic state, where government has become so large and so tangled that it can no longer perform even basic functions.

Simply stated, there is now no substitute for a fundamental restructuring of the state’s major service delivery systems and restoring the efficiencies that once produced a far higher level of service at far lower cost that what we see today.

Restoring that efficiency will require the governor and the legislature:

These are changes that cannot be implemented overnight and that will not begin producing results for some time.

This brings us to the fine point of the matter. What Churchill called history’s “terrible, chilling words” are about to be pronounced on California’s failed leadership: “too late.”

A federal loan guarantee or bailout may be the only way to buy time for the restructuring of California’s bureaucracies to take effect, but the discussion remains academic until and unless the state actually adopts the replacement structures, unburdens its shrinking productive sector and presents a credible plan to redeem the state’s crushing debt and looming obligations.

Without these actions, federal intervention will only make California’s problems worse by postponing reform, continuing unsustainable spending and piling up still more debt.

In short, if California won’t help itself, the federal government cannot and should not.


TOPICS: Candidates; Issues
KEYWORDS: calbailout; calbondage; calbudget; california; lping; mcclintock; realconservatives; rlc; schwarzenegger
I feel regret for not learning more about McClintock during the 2008 election.

Oh well, at least there's 2010. :-)

1 posted on 06/15/2009 8:26:04 PM PDT by rabscuttle385
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To: bamahead; djsherin; calcowgirl; Bokababe

ping!


2 posted on 06/15/2009 8:26:24 PM PDT by rabscuttle385 ("If this be treason, then make the most of it!" —Patrick Henry)
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To: rabscuttle385

One of the best in the nation out there, IMHO. During the CA Govenator campaign debate, he was the ONLY one who had ANY ideas. But people go for the flash and idol stardom. And people “don’t like his eyes” (they’re very pale blue). I read his speeches when I can. He is the one of only a literal handful of politicians who actually understands what the common person goes through on a day to day basis, like getting up on time, getting the kids off, pay the bills, get to work, get the laundry done, etc. I haven’t any other politician even talk of such things.


3 posted on 06/15/2009 8:33:15 PM PDT by Clock King
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To: rabscuttle385
Any more money given to the California politicians will either be squandered or stolen. Guaranteeing money for California is the same as flushing the money down the toilet. Until California voters put honest, responsible adults in charge of their spending the should not be given a penny of taxpayer money.
4 posted on 06/15/2009 8:35:15 PM PDT by detective
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To: rabscuttle385

McClintock is the man that should have won instead of Schwarzenkennedy. He would have accomplished one “H” of a lot more in the right direction for Californian’s against the overwhelming odds in the Calif. Legislature than anybody else IMO.

Yes, I am calling the California Legislature a bunch of “odds”.


5 posted on 06/15/2009 8:45:30 PM PDT by rockinqsranch (Dems, Libs, Socialists...Call 'em What you Will, They ALL have Fairies Living In Their Trees.)
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To: rabscuttle385

McClintock was instrumental in recalling Gray Davis. McClintock understood the financial problems of California probably better than anyone who has run for Governor since the days of Ronald Reagan. The GOP hacks were pushing for Arnold, of course. Faux-conservative Hugh Hewitt was one of the hacks pushing for Arnold over Tom McClintock.


6 posted on 06/15/2009 9:07:54 PM PDT by Pelham (California, formerly part of the USA)
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To: rabscuttle385; afnamvet; ALOHA RONNIE; ambrose; antceecee; atomic_dog; AVNevis; B4Ranch; b9; ...

PING!

McClintock Ping List.
Please freepmail me if you want on or off this list


7 posted on 06/15/2009 9:44:37 PM PDT by calcowgirl (RECALL Abel Maldonado!)
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To: rabscuttle385
Oh well, at least there's 2010. :-)

Nope. Not a chance. He's running for reelection to Congress in 2010.

8 posted on 06/15/2009 9:53:01 PM PDT by ElkGroveDan (Get rid of the dirty moderates. Get rid of them,)
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To: rabscuttle385
McClintock is the real deal and he knows California's problems because he spent most of his career in the California legislature. He was only 26 when he was originally elected to the State Assembly, and then moved on to the Senate.

Tom McClintock is universally respected and pulls votes across the spectrum of Republicans, including both the mainstream and the libertarian wing. Tom McClintock would make a great governor and I personally think, a great POTUS.

9 posted on 06/15/2009 10:20:31 PM PDT by Bokababe (Save Christian Kosovo! http://www.savekosovo.org)
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To: Bokababe

I would have no hestitation voting for Tom McClintock for any office, including president.

I’ve been a fan of his since he was in the Assembly.


10 posted on 06/15/2009 10:22:51 PM PDT by B Knotts (Calvin Coolidge Republican)
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To: calcowgirl

Thanks for the ping, Calcowgirl!


11 posted on 06/15/2009 11:57:47 PM PDT by Seadog Bytes (OPM - The Liberal 'solution' to every societal problem. (Other People's Money))
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To: calcowgirl

BTTT


12 posted on 06/16/2009 2:38:33 AM PDT by E.G.C.
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To: rabscuttle385; Abathar; Abcdefg; Abram; Abundy; akatel; albertp; AlexandriaDuke; Alexander Rubin; ..
California’s borrowing costs now exceed the budget of the entire University of California ... They have just imposed the biggest tax increase by any state in American history and it has actually reduced their revenues and made their budget gap wider.



Libertarian ping! Click here to get added or here to be removed or post a message here!
(View past Libertarian pings here)
13 posted on 06/16/2009 9:24:48 AM PDT by bamahead (Few men desire liberty; most men wish only for a just master. -- Sallust)
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To: calcowgirl
Tom nails it, as usual. He's one of the few politicians I would leave in place and continue to support.

As for our own pack of legislative crap weasels here in California? Perhaps a handful are worth keeping--the rest deserve, well, you know what I would like to do to the rest of them...

14 posted on 06/16/2009 11:57:47 AM PDT by Czar ((Still Fed Up to the Teeth with Washington))
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