Thursday, October 27, 2016

California to be outed as the condominium of states.

I've never owned a condo but I always considered condo fees as a form of rent since they are not optional.  Also, some developer generally has control of the "services" that those living in a condo must purchase as well as the price that they must be purchased at.  Much of it is designed to make the condo "owners" maintain property that does not belong to them.  So it was with some shock that I learned how all of this worked during the 2008 economic collapse wherein many condo owners saw their monthly payments skyrocket simply because their neighbors were walking away from their properties and no longer paying that monthly condo association fee.

I would have thought that this would be the problem of those administering the condos, not the individual condo owners.  I would have thought that the monthly payment was fixed.  But indeed, it was not.  So those who were the last to leave many of the condos in the hardest hit areas of Florida saw their finances wither as the tax, which is essentially what a condo fee is, increased due to others bailing on the condo Ponzi.

Well, something for nothing states like California are going to be in the same boat IMO and the evidence is mounting that it has already begun.  You see, corrupt California government made hundreds of billions of dollars worth of Pension Ponzi Promises to state workers in order to make big government bigger.  But now the bill is coming due and it is getting difficult to float more bonds in order to kick the can down the road.  So the cities there are now ratcheting up the taxes in order to make up the shortfall.

The people are being told that the increases are needed to cover budget deficits.  The government makes it sound like a one and done.  But that is never the case.  Each year there will be a new one and done.  The reasons are threefold.  First, the boomers are retiring at an exponential rate and many boomers were in useless but well paid government jobs.  This is why all of a sudden we are hearing about the need to fund pensions.  The need has been there all along but simply ignored because the system could still keep up with the retirement rate.  But now the retirement rate is going to swamp the system.  The retirements not only kick off the new expense of pension payments and that is bad enough.  But the retirements also mean less income tax revenue for the state.  So less money coming in is used to address rising payouts.  Not good folks.  This is not good at all. 

But there is another force that I also think is significant and that is that people are taking State Farm's advice to "Get to a better state".  Yes, the smart people see the writing on the wall.  They know that Cally is going to become a tax Hell and they are getting out while the getting is good.  This is why the Austin metro area is seeing an influx of 150+ people per day.  The great herd migration has just begun.   And for every person that leaves Cally, they also leave their "share" of the Ponzi payment for whoever is left, just like Fl condo owners did in 2008.

It's a shame about Cally.  I grew up there with Reagan as gov. and it was a nice place to live.  It was diversified but NOT the liberal Hellhole that it has since become.  Perhaps after the liberals ruin it and all of their crap collapses then we conservatives can retake the state.  Until then I have to agree with State Farm: get to a better state while the getting is good.  The cost of living in Cally is about to skyrocket.  All these new taxes will eventually show up as higher prices for everything.

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