We lived in California for more than 30 years and in the early 1960s state income taxes accounted for 20% of the state’s revenues. Now they supply 50% of revenues, plus they still have a sales tax. If you are in the top tax bracket you are paying well over 50% of your income in taxes. A good part of those state income and sales taxes won’t be available in a recession or depression, but politicians do not have foresight. Mr. Schwarzenegger doesn’t seem to understand that unfunded public sector spending is why this country is in the terrible mess it is in. We might add the $500 billion spent in Iraq didn’t do that much to stimulate the economy. That $37 billion, over the 30-year life of the bonds, will cost Californian’s $73 billion, which, without a miracle will thrust the state further hopelessly into debt. This eventually will cause cuts in all state funding. This is what National Socialism is all about. Who cares if the bills are ever paid off? The governor is kicking off what his handlers hope will be copied in all states throughout the nation, creating a state-sponsored WPA program countrywide to stimulate the economy. A sort of reverse FDR program. The feds do not pick up the bill - the states fund the welfare program.
California’s mentality has changed and not for the better. When they rejected Prop 76, The California Live Within our Means Act, and voted no for any new tax hikes, it spoke volumes. They simply want something for nothing and it doesn’t work that way. They are saying let the citizens of the next generation pay for it. Once the economy really heads down California will be in a revenue crunch. The tax base simply isn’t there and this has been going on for almost 15 years. We predict that California is on the road to bankruptcy. The collapse in residential housing will deeply hurt the economy for several years into the future if not for a long term. Construction will fall 5% this year and 25% each year for the next two years. They are going to have millions of construction workers, real estate brokers, and financial industry workers out of work. Then there are workers in little companies and developers that make up 20% of the economy. In 2006, in the first half of the year, withholding tax fell from more than 10% to 5% in the third quarter. The state will again be short revenue in 2006 and 2007 about $5 billion annually, if not more. Over the past four years there was a 35% increase in tax revenue. What do they do when that 35% disappears, which it will? All the surplus revenue that came in over the past five years as usual has been squandered. There will be a very hard landing in California and the social problems will be enormous. In a state where one out of every 50 adults is a real estate agent we see great difficulties. Then to add $43 billion on to an existing $30 billion in bonds shows a state absolutely out of financial control. It is hard to set a timeframe on bankruptcy, but we’ll guess at 2010 to 2012.
We wonder if the Senate confirmation hearings of Robert Gates for Secretary of Defense will include his secret illegal contacts with Iranian leaders from the 1980 election campaign through the Iran-Contra scandal of 1986? They should discuss his supervision of the shipping of weapons to Saddam Hussein’s regime beginning in 1982. The records captured in Iraq should be presented as evidence on his past involvement and that of the Reagan administration. There is already evidence ascertaining that Gates acted as overseer of the Iraq weapons supply operation. Reagan in 6/82 approved the program and CIA Director William Casey and Robert Gates authorized, approved and assisted delivery of cluster bombs and other material to Iraq. The story of secrecy, illegal activity and duplicity goes on and on. As we said before Gates is much disliked in the CIA and elsewhere and has assisted the elitists in every way possible.
Last year who supplied half the weapons to the world? The US, of course. Many of the nations supplied were already in conflict, but America wants to bring democracy to the world. $8.1 billion of those weapons went to developing countries, some 45.8% of the total with Russia far behind at 15% and Britain with 13%. This is all about profit and perpetual war for perpetual peace. It costs us $500 billion a year for defense or should we say offense. Then there is the other $350 billion a year for Iraq and Afghanistan. They are essentially supplying weapons to both sides of every conflict in the world. Who are the companies who profit? They are Lockheed Martin, Boeing, Northrop Grumman, General Dynamics, Raytheon, United Technologies, Halliburton, GE, Science Application and Computer Sciences. These are the main American merchants of death. These companies perfect the technology for the next war.
The neocons are deserting the sinking ship of state but in retreat they are still trying to stop the reversal of the administration’s Middle East policy – their policy. We saw this in recent interviews with Mrs. Adelman and Perle.
George H. W. Bush has had to put out one fire after another in order to save his dingbat son from destroying himself. This rescue has been going on for several years. In fact, several of H.W.’s friends and fellow illuminists personally warned George W. that the Iraq War would lead to civil war and he had best have an exit plan. Needless to say, he and the neocons had no such plan.
As we told you some time ago, James Baker III will bring in the A Team to rescue George and lay the blame for the tragedy that is Iraq and Afghanistan on the neocons. They are the cleaners - the cleanup crew. They have the studious title of the Iraq Study Group and the leader of that group of CFR elites is Mr. Baker. The group has developed a new foreign policy in order to salvage George’s presidency, so he doesn’t go down in history as a compete nincompoop.
The war between George and the neocons began with Richard Perle’s attack on Bush in January’s Vanity Fair and Kenneth Adelman’s comment that, “not only did each of them, individually, have enormous flaws, but together they (the Bush policy makers) were deadly, dysfunctional.”
The whole impetus of the war was to buy the oil rights for a pittance, strategically outflank Russia and China, open a corridor to a block consisting of Georgia, Azerbaijan, Afghanistan, Turkey, Iraq, Syria, Iran, Israel and Lebanon. From there the profits would flow and oil would be guaranteed from the southern Caspian, Iraq and Iran. The main objective though was that the road to Jerusalem led through Baghdad. That invasion and occupation would install an Iraqi democracy that would force the Palestinians to submit to Israel.
That foreign policy is about to be reversed by the Baker Study Group. Now the road to Baghdad leads through Jerusalem. They will declare that security and stability in the region, including Iraq, can only be achieved by re-establishing the Middle East peace process. We pointed this out some weeks ago. No one believed us, but they will shortly. We know how to read these events better than 99% of the pundits. We started in this vein almost six months ago when our competition was slumbering. This change in elitist tactics to save George W. requires the firing of the neocons. We believe Elliot Abrams will be the next to go. Bush will clean house over the next six months and admit that he was lied to and misled by the gang and that he is setting things right.