Anyone living in California knows that it is the aftermath of an earthquake that reveals its true intensity, not the numbers generated by some graph at a university. An earthquake is really measured in dishes broken, windows smashed or, in the worst cases, houses destroyed.
And so it is that in California, the aftermath of a housing fiasco, is now being felt in lost revenue and painful decisions to slash state budgets—something bound to be repeated in other states as the aftershocks from the mortgage/credit crunch continue unabated.
California governor Arnold Schwarzenegger is now asking state departments to come up with plans for drastic spending cuts on the order of 10 percent and maybe more–this because of the housing market which, in California, is not so much a market as it is a cemetery of dead American dreams.
Education, transportation, health care, among the things to be directly impacted, says the Los Angeles Times.
And, reports the Times, economists are warning of more bad news ahead.
“We are among a handful of states that has a lot of exposure to the housing crash,” the Times quotes one former state economist who says that property, income and sales taxes are all off.
California prides itself on being in the vanguard of many movements–sadly, it is in the vanguard once again. But for once, it would probably prefer to be at the back of the pack on this one.