California is so beautiful. There was a time when people dreamed of moving there. Now people are trying to get out. At least many of the people in private industry. The Golden State is golden no longer.
The state recently passed a voter approved tax increase of $50 billion over 5 years. It was a huge increase and passed as the “Temporary Taxes to Fund Education” initiative.
But what the initiative is mostly funding are the pensions of California’s army of public employees.
The state made promises it could not keep and now the bill is coming due. And you thought the money was going to the kids. Sucker.
What if a corporation raised $500 million in a securities offering on the premise that the proceeds would go for operating expenses, then disclosed a few months later that $300 million of this amount would instead be used to service a debt that wasn’t disclosed in the offering document?
This would be false advertising, subject to sanction by the Securities and Exchange Commission. Unfortunately, the SEC doesn’t have jurisdiction over state politicians engaging in the same behavior, and, in the case of California, involving sums that are 100 times bigger.