Austin Hill

The U.S. Federal Government is on a collision course of debt and deficits.

And California may be the best example yet of “the feds on steroids.”

As state governments continue to feel the recession’s impact and are staring-down daunting fiscal challenges, the wisdom of the American people has been prevailing in some of the most unlikely places. In states as diverse as Wisconsin, Idaho, New Jersey, and Ohio, Governors and legislatures have stood-up to the ever-expanding demands of government employee unions, reigned-in employee compensation growth, and have cut state spending. Even in liberal Massachusetts the Democrat-led House of Representatives voted last week to limit the powers of their state government employees’ unions.

But the wisdom hasn’t yet made it all the way out to the Left Coast. With a budget deficit of somewhere between $10 and $15 billion – a deficit that is expected to swell to about $25 billion by the middle of 2012- California politicians have continued their self-serving spending sprees of the past many years, while at the same time legislating itself further and further away from any semblance of being “business friendly.”

Like it or not, California is both a global economic epicenter, and a spectacular place in the world. It is home to the highest mountain in the contiguous forty-eight states (Mount Whitney), the lowest valley (Death Valley), Facebook, “Surf City, U.S.A.”(Huntington Beach), Apple Computers, The World Champion San Francisco Giants, eBay, Legoland, Cisco Systems, “Hollywood,” three U.S. Presidents (Richard Nixon by birth, and Herbert Hoover and Ronald Reagan by “adoption”), and Mitsubishi Motors of North America.

This is to say that California can be and should be a place of robust economic opportunity across multiple sectors. But politicians have a stranglehold on the state, and consequently, businesses and capital are leaving, while productivity is slumping.

After Governor Jerry Brown took office in January, he noted that California had a history of “kickin’ the can down the road” with its budget woes, and that Californians had been treated with “evasions,” “accounting gimmicks,” and “smoke and mirror” tricks on state finances. At his first State of the State address, he announced that his plan to solve California’s dreadful fiscal problems would involve both cuts in government spending, and – if California voters approved – tax increases.

Austin Hill

Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.