california: Most sources put the California budget deficit at $25bn. What caused the budget deficit in California, and what measures do you think should be undertaken to reduce their budget deficit in order to restore a business friendly, consumer confident state economy?|||1- Deregulation - over regulation, which California is infamous for, creates a burden on companies that have to comply with the State's rules. Compliance is often very costly and only the largest companies can afford to do so. Over regulation hurts small business growth because they don't often have the ability to pay for the cost of compliance or the cost to go to court for non-complaince. Deregulating would increase market demand and therefore increase the revenue gained from taxes. 2- Decrease spending while increasing taxes. Simply put, that is all that needs to be done to reduce the deficit. HOWEVER, with high unemployment, increasing taxes is never a good idea. Increasing taxes reduces demand for economic growth. Californians would continue to leave the state and a faster rate than they already are. Decreasing spending has the same effect. Recipients of the spending would no longer have the purchasing power they once received from the government, and therefore the economy would likewise shrink. California needs to freeze its spending, lower its taxes, and deregulate. This would be the best way to spur economic growth. Once unemployment reaches around 5% and growth returns to around 3% or better, California needs to then begin slowly decreasing spending while increasing taxes. This would hurt the economy, but wouldn't be so bad as if they made drastic changes. You would then see the debt decrease and California would again be the wonderful state that it once used to be.|||Its all to late.!! California - america in general is a 'bankrupt nation' - your local deficit says so - and the countries overall debt of 14 trillion+ $'s says so.!! The action to save 'yourselves' should have been taken 20+yrs ago. The debt (local/nationally) is so out of control - there is/are no 'quick-fix' solutions + the peoples will not accept 'any measures' that will 'destroy 'their comfort zones' until the 'food queues' start forming - that being the only sign (to them) that their 'ignoring attitudes' were wrong. For idea's the US would do well to see the measures being taken by the UK .....brutal-hurtful-painful cost cutting right across the board........no exceptions. The UK past (labour government) doing 'exactly the same' as the US has done....borrow-borrow and spend-spend and now that (disposed) government is denying they did anything wrong. Solution :- cut public services big time - that being the most expensive expenditure for local-national governments - freeze/reduce wages etc - mass unemployment will follow - it can't be avoided.......now you see the amount of 'pain' the US people will be having - and that will be going on for years to come. The alternative ?. Do nothing - and wait for the chinese 'bailiffs' to appear - the holders of all the US loans/bonds - they then 'controlling' the US totally - not possible ? ......just wait and see.!!|||In order to actually deal with the debt, California will have to take stock of any & all hard assets and then issue coinage based on said hard assets, and pay all state obligations in this coinage. The state will have to also outlaw FRACTIONAL RESERVE LENDING. For every $ lent, (by any means... Credit cards included ) There will have to be hard currency to back it up. The system as it presently is, was designed to FAIL and make the entire world debt slaves to the greedy bankers. GREED is ruining AMERICA! Bust the Banker Crooks!|||California is simply reaping what they have sown.|||Deprt the illegals. No more "in-state" tuition for illegal aliens.|||split up so that we can have another republican state|||Tax suntan lotion and pink shorts. Problem solved.|||Cut spending.|||legalize it|||Pretty simple: Quit spending money they don't have.|||California had a surplus and the legislature loves to spend money. Get rid of the legislature we have enough laws on the books to last to the end of the world. With them gone there will be no new taxes and no salaries to pay them and of course cut off welfare except for food no one should go without food 3 times a day, the rest they will have to figure out on their own. People will think its unfair and move to other states, its a win-win situation.