California Audit Confirms The Worst About The Golden State

A recent audit of California’s financials has confirmed the worst—the state is completely broke.

In fact, this is actually an understatement. A broke person has a balance of $0 in their bank account or perhaps a net worth of $0. While this is bad, it represents a balanced budget.

If someone has $0 in assets, but also $0 in liabilities, they are broke but balanced—they have no debt. California isn’t broke—it’s deeply indebted, which is far worse than broke.

The age of credit and consumer spending has caused many Americans to forget this. A person with no money, yet no debt, is actually in a far better position than someone who has money but also debt obligations that outpace their money.

Money comes and goes, anyone can make more money, but it is incredibly difficult to get out of debt—especially unsecured debt.

This may not be the most popular thing to say, but if I were given the option of being a California—someone with lots of money but liabilities that outpace that money, or someone with $0 and $0 liabilities, who lived a simple life, I would choose the latter.

The latter is in much better shape than the former, despite seeming appearances. Again, this is very unpopular to say and does not resonate with most people. This is because most people have absolutely no idea about money or finance.

California has a whopping $55 billion in excess liabilities. They already have the highest taxes and cost of living in the nation. They can’t raise taxes any more, and even if they did, it wouldn’t help.

There is an inverse correlation between raising taxes and raising revenue. People have feet, they can move. If taxes are raised to unsustainable levels, people find ways around paying the taxes, or they simply leave for greener pastures.

Costs also go up over time, how is California going to cover this $55 billion, and growing, deficit? It can’t—that’s the simple answer and the one no one wants to hear.

California is screwed going into the future and will have to experience a complete collapse before spending is cut to bear essentials and things get better. Here’s more on the failing state:

The California State Controller released the audit of California’s financial statements, and it’s not looking good.

With a $222 billion hole, California now has the largest unrestricted net deficit in the nation.https://t.co/R7IZ3EAJNK

— Epoch Times Print Edition (@EpochTimesPrint) March 20, 2024

California is BROKE💰

The audit paperwork filed LATE shows $55 BILLION owed and there was even a deficit last year in a supposed good economic year. Things are NOT getting better and DEMOCRATS have SQUANDERED everyones money💰https://t.co/YcUkHEEIEc pic.twitter.com/Qakxh7xTdQ

— 🇺🇸 ʟᴇғᴛ ᴄᴏᴀˢᴛ ᴠᴀɢʀᴀɴᴛ 🇺🇸 (@Baklava_USA) March 20, 2024

The Epoch Times explained:

With a $222 billion hole, California now has the largest unrestricted net deficit in the nation.

Of the 50 states, only three states saw their balance sheets worsen: Alaska, South Carolina, and California.

Local lawmaker Bill Essayli grilled his colleagues on immigration policies that are impacting California’s unbalanced budget and fueling budget deficits:

Here are the audit findings I referenced during the hearing:

“When people who are permanent legal residents of California, but not citizens, go to the DMV to complete transactions for a driver’s license, state ID card or change of address, the California New Motor Voter system…

— Bill Essayli (@billessayli) March 21, 2024

Been telling you for weeks #California is broke

California audit finds state is broke: $55 billion more owed than available https://t.co/HFLqjP0DLb

— Chris Shouse 🙏🦅 (@ChrisShouse) March 21, 2024

Just The News went into greater depth about California’s dire financial situation:

With massive stock market gains and unprecedented job growth in the high-earning tech field amid a post-pandemic recovery, 2022 was a year of great economic prosperity for California.

However, for FY 2021-2022 the state nonetheless adopted a budget with $234 billion in spending from the general fund compared to $220 billion in revenue.