Thursday, July 12, 2012

Simple Illustration of California’s Budget Dilemma

Here’s why California has a hard time getting out of its budget straits: - Loren Kaye/Fox&Hounds

The ratio of private sector workers in California to Medi-Cal recipients and government employees continues to fall. More non-wealth generators are being supported per wealth generator today than in the past. The same trend is evident nationally, but it’s worse in California. We can’t right our fiscal vessel (never mind the economy) without acknowledging and addressing this. We address this by (1) fixing the denominator – fewer welfare recipients and public employees, or (2) the numerator – more private sector workers creating wealth.