The luster is off the Golden State

How much worse can it get in California?  The Left Coast is entering a Greece-style spiral of high unemployment, anemic growth, expanding welfare rolls, high taxes, and declining prospects:

Spending has more than doubled, from $45.4 billion in 1996 to more than $92.5 billion today. Income, sales and car taxes have all been hiked. As a result, California has the most progressive income tax system in the nation, with seven income tax brackets, and the second-highest top marginal rate.
Even with all those tax hikes, California's 2012 budget is still $15.7 billion in the red. So what does Gov. Jerry Brown want to do? Raise taxes again, of course. He has proposed a ballot initiative that would: 1) raise sales taxes on everyone and 2) raise incomes taxes on those making more than $250,000 a year (like Obama has proposed to do nationally). But even this $8.5 billion tax hike would still leave the state $7.5 billion short. Where will California get that money? Who knows?

And now America's largest pension fund - California's CALPERS - announced the fiscal 2012 return on investment was...1%.  Since CALPERS calculates pension obligations based on a 7.5% rate, this means the contribution rate for California public workers will have to go way, way up to cover the shortfall.