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California is ranked 7th worldwide in terms of GDP (Gross Domestic Product), placing the state above nations such as Spain and Canada.  There was a 50 percent increase in the number of new residents from 1980 to 2000, today there are 37 million people living in California, which represents 8.5 percent of the US population. 

But the population mix is changing.  Since the millennium, businesses have moved or closed at an alarming rate, causing the state to lose corporate taxes and the revenues skilled workers represent.  Even the work for unskilled labor has been diminished with draconian environmental laws for manufacturers and farmers losing vital irrigation sources in order to protect an endangered minnow at the expense of growing crops to feed the nation and the world. 

At the same time, pension funds for public sector employees has increased 2,000 percent in the last decade while revenues are up only 24 percent.  The state deficit for this year will be in excess of $20 billion.  What happened to the money from the state lottery?  Native American casinos?  Increased gas taxes?  Higher sin taxes ( cigarettes and alcohol)?  The recent hikes in sales taxes at the state and local levels?  Are Californians destined to depend on the legalization of marijuana and the taxes gained from it to tide the state over until the next financial crunch?

Too many special interest groups resulting in too many petitions that end up as ballot propositions have taken much of the budget responsibility away from the elected representatives.  This experiment in direct democracy may be popular with residents, but it hampers budget control – assuming the free-spenders in Sacramento would actually be concerned about finances as opposed to pushing their own agendas.

The cycle of higher taxes imposed in order to pay for immigration services, education, health care, an aging infrastructure and increasing government costs are hangovers from the glory days of the Golden State.  This is not 1960 or 1985.  It is 2010 and the countdown to self-destruction is a reality. 

Change is not an option; it is an imperative.  The voters of California must send a loud and clear message to politicians to stop the madness.  If they don’t listen, perhaps the state can declare bankruptcy (not actually do it, just take it to the brink before the federal government steps in), get out from under the commitments that shackle reform and start anew.  If California gets a fresh start other states might follow.  Think it could work?

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And, with the anticipated $500 billion plus reduction in Medicare benefits pre-boomers, and others on fixed incomes, will end up with fewer dollars to cover higher out-of-pocket expenses. Especially cruel is the proposed taxation of the so-called “Cadillac” health insurance plans. Many retirees were willing to take lower salaries in order to have premium coverage in their later years, so a tax on this benefit would be a double-whammy – less money during their income producing years and less money now.

The health care options coming out of Washington seem to ignore those of us born between 1930 and 1945. We are, quite possibly, the last generation who saved for the future, because we believed it was our responsibility to do so. This is something we learned from our parents who weathered the back-to-back storms of the Great Depression and World War II. As careful as we may have been, our investments were significantly reduced when the current recession hit.

Many of us had to sell off investments in order to survive. This money is gone and there is no way to replace it in the years ahead. Others held on as the market lost half its value. While the market has returned to the level where it was a year ago, it must increase by 50 percent to be where it was when the slide began. Along the way, we may have made our portfolio safer by switching from stocks to mutual funds or to non-taxable bonds. Therefore, the opportunity for appreciation and a livable return is greatly reduced. In addition, we couldn’t down-size and sell our homes at the price we needed to help us through the retirement years. So we are stuck. The only ones who may be worse off are those who did not save for the future. They have to depend on the government.

Whatever your financial situation may be; don’t be seduced by the $250 in “hush money” from Uncle Sam. Earlier we received $250 as part of the stimulus package. Can you remember what you bought with it? Inflation is lurking around the corner, so how can the government decide there will be no raises in Social Security for the next two years? Call your representative and let them know something must be changed prior to the 2010 election or you and other pre-boomer won’t be sending him or her back to Washington.

At the same time, let this politician know that you, and others like you, won’t accept Medicare being raped in order to finance insurance for people who can’t or won’t pay their own way. If you’re willing to accept what the government doles out, then you have to live with it. The problem is you may not be living the quality of life you worked so hard to secure, and you may not live as long as you thought you would a year or so ago. It’s your choice: fight for what you believe is right or let others decide your fate.