CHESSNOID

California is a huge economy and will affect the entire country as it tries to resolve its budget issues again.  Most people don’t realize the domino effects from this huge state with a big population.

The major problems plaguing California right now are the same problems troubling our nation.  It has extremely high unemployment, increasing foreclosures, and of course the unbalanced budget.  Unlike the federal government  The California legislature did not resolve the issue last time and will revisit a worsening budget deficit.

L.A. Times:

Reporting from Sacramento – Less than four months after California leaders stitched together a patchwork budget, a projected deficit of nearly $21 billion already looms over Sacramento, according to a report to be released today by the chief budget analyst.

The new figure — the nonpartisan analyst’s first projection for the coming budget — threatens to send Sacramento back into budgetary gridlock and force more across-the-board cuts in state programs.

The grim forecast, described by people who were briefed on the report by Legislative Analyst Mac Taylor, comes courtesy of California’s recession-wracked economy, unrealistic budgeting assumptions, spending cuts tied up in the courts and disappearing federal stimulus funds.

“Economic recovery will not take away the very severe budget problems for this year, next year and the year after,” said Steve Levy, director of the Center for Continuing Study of the California Economy.