California is in Such Bad Shape

[Miss RDA]

Will California become America's first failed state? | World news | The Observer


Odd time to bring Polanski back. They have had more than enough chances to arrest him. Must be a bad time to be living in California if you are not financially secure.

[Hoosierland King]

It wouldn't surprise me if California failed. A few months ago it just about collapsed when they narrowly passed there new budget.

[Miss RDA]

How did it get this bad? What went wrong?

[skytrekker]

I have seen on several News lines that the Golden State may be the first state to fail.

But the state has always been a pioneer for so many concepts of a 'New Civilization'

We all may learn from its 'failure'.

[doglover]

Unfortunately, I think California will be known soon as the Burned State or the Fire State instead of The Golden State.

[doglover]

Originally Posted by raggy dee ann

Will California become America's first failed state? | World news | The Observer


Odd time to bring Polanski back. They have had more than enough chances to arrest him. Must be a bad time to be living in California if you are not financially secure.

Thank you Raggy for bringing this article to my attention. It really opened my eyes to issues I wasn't aware of living so far away and made me incredibly sad to read about the demise of so many parts of California and the devastation it has caused millions of Californian's. I left the state two years ago and must admit that I have tried not to look back so I could focus on the future here in New England but it is hard to have such a clear and depressing picture of my former home.

[skytrekker]

S

I well know of your dislike of California- and yet many feel it is still paradise at the end of the continent.

[doglover]

The reasons I dislike California are the very reason that caused the collapse of the state......over indulgence, greed, the need to be like the "Jones" and poor money management to name a few. The inflation rate of the cost of buying a home was the worst and one of the biggest problems. Again, greed. A modest home in a good area that cost $274k in 1996 would cost you $750k in 2001. If you bought that house in 2001 you most likely are upside down in your mortgage now and probably would face foreclosure as no one else would by it at that inflated rate.

[Wyoming53]

A big part of the problem out there is simple math.

1990 Young couple buys house for $150k
1999 Prices are up so couple refinances for new value of $400K
2008 House is now valued at $300K

Young couple is pissed cause they are upside down in their morgage/value.

The real deal is, the house has doubled in value. But they don't see it that way so they bail.

Same couple owns the home. They've made payments for 18 years and currently owe more then what they did 18 years ago.

Then, said couple blames in on the economy, the president, the past president, the Iraq war, the illegal aliens, the...

[BayBreeze]

I see it every day. Appraised values are market driven.

[jabm67]

Originally Posted by Wyoming53

A big part of the problem out there is simple math.

1990 Young couple buys house for $150k
1999 Prices are up so couple refinances for new value of $400K
2008 House is now valued at $300K

Young couple is pissed cause they are upside down in their morgage/value.

The real deal is, the house has doubled in value. But they don't see it that way so they bail.

Same couple owns the home. They've made payments for 18 years and currently owe more then what they did 18 years ago.

Then, said couple blames in on the economy, the president, the past president, the Iraq war, the illegal aliens, the...

California really started going down the tank back with Proposition 13 in 1978. There, they capped the property taxes on people who already lived there, and pushed it off onto people who moved later. By itself that's questionably bad, but it set the precedent for unequal tax burdens, with one group of people (the old-timers, in this case) living cheap as others (everyone else) carrying their tax burden. Once you start explicitly allowing such a thing, you are on the road to disaster, because taxation just becomes a power fight to see who has to pay for everyone else, and you start living in a fantasy world of not caring where the money is going to come from, so there's no incentive to live within your means.

Never mind that their Legislature is so out of control they never saw a payout bill they didn't like.

It's easy to blame illegal aliens for problems, but illegals tend not to make enough money to be much of a tax revenue source anyway. And if businesses didn't hire them because they're cheap (since they're illegal, you don't pay payroll taxes on them, let alone any other benefits), they wouldn't be here anyway.

[Wyoming53]

Originally Posted by jabm67

California really started going down the tank back with Proposition 13 in 1978. There, they capped the property taxes on people who already lived there, and pushed it off onto people who moved later. By itself that's questionably bad, but it set the precedent for unequal tax burdens, with one group of people (the old-timers, in this case) living cheap as others (everyone else) carrying their tax burden. Once you start explicitly allowing such a thing, you are on the road to disaster, because taxation just becomes a power fight to see who has to pay for everyone else, and you start living in a fantasy world of not caring where the money is going to come from, so there's no incentive to live within your means.

Never mind that their Legislature is so out of control they never saw a payout bill they didn't like.

It's easy to blame illegal aliens for problems, but illegals tend not to make enough money to be much of a tax revenue source anyway. And if businesses didn't hire them because they're cheap (since they're illegal, you don't pay payroll taxes on them, let alone any other benefits), they wouldn't be here anyway.

So very true. But I remember in the late 70's, early 80's, interest rates were high. Kind of held everything in place. Later, not sure what year exactly cause the years I provided above were just examples, but later, when interest rates dropped out the bottom and everybody went to re-finance to catch the lower rates, I started seeing failure after failure because instead of just refinancing, they refinanced for appraised value instead of what they owed with maybe enough to pick up some new carpet.