Worse than you think

John Seiler:

If you’ve been reading CalWatchDog.com, you’ve seen my pieces warning that the economy might not perform up to the expectations of Gov. Arnold and the leaders in the Legislature. Back on June 21, I warned that a recession well could be coming in 2011, making the budget mess much worse.

And on Aug. 12, I warned that California well could repudiate its debt.

On another site, Chronicles Magazine, I’ve written a new article, this one called, “The Panic of 2011.” Check it out.

Meanwhile, just as I predicted, the bad economic news just keeps rolling in. U.S. economic “growth” estimates were revised downward for the second quarter, to 1.6%. Just released minutes from the Federal Reserve’s Aug. 10 meeting reported, “Real GDP growth was noticeably weaker in the second quarter of 2010 than most” — but not yours truly — “had anticipated, and monthly data suggested that the pace of recovery remained sluggish going into the third quarter”

Home sales crashed by 12% last month.

Our venal governor and state legislators don’t care about any of this. They just want to get through the rest of the year and hand off the Depression to the next governor and legislature.

Next January, the new governor will announce the deficit really is $40 billion. And a new round of spending cuts and tax increases — even under Whitman (especially under Whitman) — will be imposed. The higher taxes will make things even worse.

This should be a time when taxes and government are slashed drastically, the rope around taxpayers’ necks loosened, so we can breathe again to invest and create new jobs and businesses. But California now is hopeless.