This is what it looks like when politicians and the special interests they serve ignore economic reality and spend a once-flourishing state into the ditch.
Three hundred people are currently living in a tent city in Sacramento, where Michelle Rhee’s fiancé Kevin Johnson is mayor, as the city’s homeless population – now estimated at 2,000 – explodes.
NBC interviewed formerly middle-class Americans who suddenly found themselves living in tents in a state that used to have a thriving economy bigger than many countries, but is now collapsing like a black hole.
California has the third highest state income tax in the nation (9.5 to 10.5 percent), the highest sales tax rate (8.25 percent), the highest gas tax (67 cents per gallon), and some of the highest electricity rates in the nation.
Despite the heavy tax burden, the Golden State’s politicians managed to spend their way into a $19 billion budget deficit. Unfunded pension liabilities for state workers are estimated to be somewhere between $120 and $500 billion.
Budget cuts came too late to avert this snowballing catastrophe.
“California has become a complete and total disaster zone in more ways than one, and an increasing number of Californians are deciding that enough is enough and they are getting out for good,” writes Michael Snyder for Business Insider.
Unemployment climbed to 12.4 percent in September, 15 percent of the state’s population is impoverished, and one business in Sacramento has closed for every six that remain open. It doesn’t look good for the Golden State.
The tragedy, of course, is that California’s slow-motion economic suicide was entirely preventable.