Unlike most politicians who live in denial, Schwartzenegger is willing to admit that California is on the same path as Greece. Unless we change, we know weâ€™re in trouble.
There are two potential answers to Californiaâ€™s budget problems: cut spending or increase revenues.
The problem is that we canâ€™t increase revenues. With unemployment in California is at 13% right now, we simply donâ€™t have the workers to tax. But even if we did, we already have the highest sales tax of any state in America. We also have the highest personal income tax rate of any state for middle-class people (9.55% of everything over $50K!).
If you break down the state budget, it comes down to two choices:
a) cut education
b) cut welfare type programs
Unfortunately, we have to finally decide on one or the other. We can no longer afford both. Which do you want? Cut education further than weâ€™ve already cut it, or cut entitlements? Schwarzenegger knows what he is doing. If you donâ€™t approve of his current plans, you canâ€™t blame him for cutting education.