Despite Tax Increases, California Budget Deficit Already $2.7 Billion

Even as residents flee the state -- and take their tax dollars with them -- California has continued to engage in deficit spending. This has resulted in the state's budget deficit for the first five months of the fiscal year increasing to $2.7 billion, bringing the state's total debt to nearly $25 billion.

Breitbart News reported that after Californians voted for massive tax increases by approving of Proposition 30 in November, the state's tax revenues declined in November by $806.8 million, or 10.8%. 

State bureaucrats are projected to spend more money than the additional revenues the state is expected to gain from Proposition 30's passage. 

For instance, The Department of Developmental Services and the Department of Health Services in California has already increased its spending "in comparison to its spending last year." 


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The past several months have seen the price of gold slump even as the Fed and other central banks have accelerated their massive expansion of paper money. Gold is off about 20% so far this year with silver down almost 30%. The old adage--“don’t fight the Fed”--particularly comes to mind now because the US equity markets have been setting new highs during this same period. All of these gains are nominal, you understand, but for terrified American policy makers and investors, nominal is just fine.

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