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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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“Many older workers can’t wait to retire, while many younger workers desperately need work.  My plan enables older workers to take early retirement, thereby freeing up those jobs for younger workers who are currently unemployed.  If just 25% of eligible workers choose to retire early, we can very quickly open one million job opportunities.  These are not temporary jobs, but permanent jobs that already exist in our economy, even under the current recessionary circumstances,” said Kucinich.

To many, this might seem like a sound idea, since more than two-thirds of workers elect to take early retirement based on Social Security (SS) rules offering reduced benefits at age 62.  The Congressman’s plan would reduce the eligibility age to 60 for the first million (25% of those eligible) who are willing to retire, now.  The money would come from the funds already allocated for job stimulus and health insurance would be covered by a different federal spending act.  This is still the taxpayers’ money.  Right? 

The broad concern about such a move is that it does not create new jobs; instead this simply replaces one worker with another.   In essence it takes a productive, experienced worker and replaces them with one that is younger but untrained.  Of course, the argument may be that the newer one will do the job for less money and fewer benefits.  

Public sector employees may welcome early retirement, since they usually receive better benefits after leaving the workforce than do those from the private sector.  Unfortunately, taxpayers are saddle with these retirement benefits (up to a whopping 90% of what they got while on the job) for the rest of the employee’s life.  And if they so choose, the employee is young enough at age 60 to find another job, with the net result to them being more income than before.  This also means taking a job that might have been filled by someone who is already unemployed.  Does this make sense?

Pre-boomers know what its like to plan for retirement and many of us have made the transition.  We know it’s not as easy as those who have yet to go through the process think it is.  The prospects of living another 25 or more years is worrisome when our fixed incomes are affected by the financial market volatility and out-of-control government spending.  On top of this we are faced with a freeze on SS benefit increases and a $500 billion decrease in the Medicare budget. 

The 65+ market is about to experience a population explosion as boomers become New Seniors next year.  Before fixing anything else, well-meaning politicians need to talk to those of us living in retirement before trying to add more people to our roles.