Golden State Austerity Cuts - Assignment Example

This subject video is on the explanation of the Austerity measures that are proposed by the governor of California. The state is in debt to the tune of 40 billion dollars. These measures are proposed by the use of various measures. This video touches on various matters that are important to the explanation of these facts through this video. They are;

The History of Austerity in the State

California has suffered from this type of problem before. The video explains that the state relies on various measures to control itself against the market. However it relies majorly on income from the housing market which recently burst leaving property values to fall and the state without income. The state also has suffered through the lack of support from the federal government which is focused on the rescue of Wall Street vis a vis saving the state. California is set to implement austerity to control the various aspects of its budgetary spending and increase the revenue that its budget is set to allow. The analysis of this decision aims to show that austerity measures are not the only factor for the revision of the state budgetary allocations. It opines that the state itself has the ability to increase funding from various measures that will ensure and prevent the strikes that are being experienced by the youth and citizens of the state. The video also explains that these measures are affected by the central government already viewing the state as a historically democratic voter.

The Austerity Measures

The analysis talks about the various austerity measures that the governance of the state intends to introduce to the state. These measures are meant for the increase of revenue to the state to lessen the debt that the state has accrued. These are: These reforms include, cutting of work hours, the regulation of healthcare funding, the slashing of welfare and an increase in tuition in the public education system.

Reasons why the state is failing

The state has lost a lot of its income after the housing market collapsed and left a giant hole in the budgetary allocations of the state. In the explanation of why the state has a lot of debt, one of the reasons that can be attributed is the effect of various forms of taxation. The first is the lower income tax for all persons in the state. The state is the lowest taxer of persons in the entire country. People pay less taxation than other states bringing the amount of income that is collected to a minimum. This is bad and when added to an increase in public spending cripples the government in the long run. The state also has a big discrepancy in the taxation of the wealthy and the poor among its citizens. Currently, both class of citizens are taxed the same in the society. This is viewed as unfair to them as well as in comparison to the other states in the country that practice equitable taxation. This means that the rich get taxed more than the poor.

The recording also shows the difficulty of the state in raising the taxes and the revenue required through the promulgation of proposition 78 and the use of the super majority. Prop 78 is a law that allows for the purchase of cheap medication to those who need it in a move to improve healthcare. However the state government funds these creating a deficit in the budget. These are among the cuts that are suggested by the legislature of the government to increase the revenue preventing the massive protests that are being suggested. These protests are aimed at the rise of the standard of living of Californian citizens. This video also suggests various measures that can encounter the austerity measures that are suggested creating a safer environment for the introduction of new funds. These include the increase of bureaucrats for the service of the people to prevent cuts and revision of tax rates to facilitate income growth.

2.

The Greek protests were a culmination of an anti-austerity movement that fought the various austerity measures that were suggested by the government to remove the country out of the collapse of its economy and huge debt that it had to foreign nations. The protests in California occur due to the left movement in the criticism of President Obama’s policy on the rescuing of the financial market in Wall Street as opposed to the his government rescuing the people through the state. These protestors are angry at the state of things in the state and are unsatisfied by the treatment of the government and a lack of reform process.

The similarity in the two protests is that they are instigated by opposition to the various government authorities in place. The Greek protests are created by the leftist movement in the country like in California as they try to come up with a plan that will change the country’s direction on austerity measures. In Greece and California, the same austerity measures are proposed and put in action. The major similarity in these measures is the adoption of Tax reforms to counteract the loss of funding. In Greece this is done by capturing money lost through tax evasion from cartels and the black market. In California it is done by suggesting the reform of tax gaps between the rich and poor.

The situation in the Greek country led to distrust in the leadership by the people. This led to public strikes and the destruction of property by members of the public through strikes and alteration of the government’s image to the international community. This situation also led to the introduction of stricter measures by the European Union for the bailout program putting the measures on reform into thirteen Austerity packages. This was done in order to maintain an ease of transition into the reformatory process and maintain a lead on protests.

3.

There are several Deep Cuts that are being factored in by the governance of California. These are: slashing workers hours. This measure aims at introducing the cutting of workers time during the day in government jobs and public institutions. When persons go to work in these institutions, they end up working longer hours and accrue additional wages through overtime. The government intends to reduce this reducing the amount of money it has to pay to them; Reduction of Healthcare funding. California subsidizes the healthcare for the poor through public forums. These forums can be attributed to the high poverty rate in the state. The state will cut funding on government hospitals and on various government institutions that create awareness programs for public safety. These measures are meant at lowering spending and transferring funding into the debt; Reduction of Welfare. The elderly are not safe from this menace either. They will suffer through the reduction of welfare by the state. Welfare helps facilitate the survival of the elderly in the society by giving them a sum every month. The slashing of this fund will mean a tougher time on the elderly in their daily lives. Increase of school tuition. The state of California has witnessed an increase of tuition by 100% in the last year with a further increase by 6% this year, the video explains. This has seen a rise in the cost of tuition for those attending universities in the state. This rise is aimed at creating funds like all the above measures but may see a transfer of students into seeking education in other states. This tuition increase is viewed as a burden of students whose already high tuition is set to go higher.

The group that is likely to be most affected by these cuts is the poor, the elderly and the students. The poor have had access to subsidized healthcare in the state. Due to these cuts, the funding on healthcare will disappear leaving the poor to settle with large hospital bills. These bills are crippling without a government subsidy. The elderly will suffer due to a lowering of the social security benefits they get once they attain the retirement age. Lastly are the students whose high tuition fees is seen as a hamper in the educational process.

4.

There are several ways to increase revenue in the state. However, the most prominent is one that encompasses the problem of raising revenue directly this is;

A review of the taxation system in the state

California has the lowest taxation grouping in the whole country; this assertion means that on average the Californian citizen pays less tax to the government than his counterpart in Utah. This needs to change with an increase in taxation to bring the taxes up. This measure will directly influence the level of revenue in the government.

The state taxes each citizen the same amount. Although some can argue that equality is a key measure of democracy, it is equity that brings about the best reforms in a society. The state needs to invest in the equitable taxation between the rich and the poor. This means taxing each group according to their purchasing power leading to more taxes for the rich. This method of taxation is already in use in other states generating more income for the state.

Although observed as a last resort for the state, the federal government should intervene and bail the state out of its financial mess. The government receives a share of the taxes levied from each state and utilizes them in things that encompass the whole state such as the universal healthcare system. A portion of these taxes can be redirected to the state to bail it out. This intervention will also foster good will and stop the protests that are in occurrence in the state.

The state should embrace various changes in its budget to facilitate a change in unnecessary spending. These reforms can include a change to the Super Majority and Proposition 78 that lead to the diversion of funds into the healthcare sector. This increases the wage bill of the entire state leading to the states debt crisis with the help of the taxes levied on persons in the state.