California 2011

A year from now, you’ll be reading a news story that goes something like this…

California braces for “violent modernization”

California reacted with a mix of resignation and outrage on Monday to a painful new austerity package from the government that newspaper editorials said would force a long-delayed “violent modernization” on the state.

“The time to pay the bill has come, the time of responsibility for all of us tackling this crisis must become the big opportunity to modernize our public life, even if we have to bleed,” said one newspaper.

The governor unveiled the plan to overhaul California’s debt-ridden economy on Sunday after talks with officials from New York Banks.

It foresees a massive fiscal adjustment driven primarily by cuts in the state’s bloated public sector.

A public sector pay freeze was extended until 2014 and treasured benefits will be scrapped for many employees. Pensions will also be cut.

STATEWIDE PROTESTS

“With the consent of the political and social forces we will make the changes that are needed to the political system and the economy that should have been made years ago,” the governor said. “Now is the opportunity to make these changes.”

How the public reacts to the measures will be decisive in determining whether the government is successful in implementing them.

Smaller protests were expected on Monday ahead of statewide strikes by public and private sector workers on Wednesday, which will offer a first glimpse of the extent of the anger with government plans.

There are precedents for the massive fiscal adjustment that California is undertaking, but economists say the state faces a more difficult challenge because of the weak state of the economy and the expectation that it will continue contracting for the next two years.

The above is an actual story, here, today about Greece. I just changed “Greece” to “California,” Greece’s politicians to “the governor” and European financial officials to “New York Banks.”

— John Seiler