CALIFORNIA, HERE WE DON'T COME - AT 12:15 P.M. ET:  California has often been a bellwether for the rest of the country.  The numbers coming out of the tarnished golden state are grim:

Oct. 9 (Bloomberg) -- California’s revenue collections trailed its forecasts by $1.1 billion during the first three months of the fiscal year, showing new deficits are emerging in the budget Governor Arnold Schwarzenegger signed July 28.

Revenue was 5.3 percent less than was assumed in the $85 billion annual budget during the three months ended Sept. 30. Income tax receipts led the shortfall, as unemployment reached as high as 12.2 percent in August.

“Revenues more than $1 billion under estimates and recent adverse court rulings are dealing a major blow to a budget that is barely 10-weeks old,” Controller John Chiang said in a statement. “While there are encouraging signs that California’s economy is preparing for a comeback, the recession continues to drag state revenues down.”

COMMENT:  I'm always amused when public officials talk about a state that is "preparing" for a comeback.  How do you prepare?  California is in terrible shape.  It is burdened by excessive spending, fleeing industry, and a large number of illegal immigrants. 

And Hollywood, a major industry in the state, is cutting back on budgets.

Soon the matrimonial lawyers might even leave.  Followed by the plastic surgeons.

This does not bode well for other states.  Illinois is also in trouble. 

And how does Washington react?  The Dems are already talking about a second stimulus package.  Boy, I hope it's as effective as the first one.  That really brought jobs back, didn't it?  They're also talking about a value added tax, which will kill purchasing, a sure way to improve the economy.

October 10, 2009