California seals deal on $26bn deficit


California’s Governor, Arnold Schwarzenegger, has now made a provisional agreement to reduce the State’s soaring budget deficit.

Its main features are a $9bn temporary cut in the education budget, plus multi-$bn cuts in welfare and health programmes.

The only good news is that it clears the way for oil drilling to resume off the Santa Barbara coast. The ban, aimed at preserving California’s beaches, had clearly become an expensive luxury for the US’s most populous state.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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