SACRAMENTO, CA- The American Rescue Plan was touted as a way to provide COVID relief to cash-strapped Americans, businesses and states.
What has happened instead, as many on the right predicted, is that blue states were relieved of their billions of dollars of debt due to public union pension obligations and now flush with cash, are blowing it in the same ways that got them in trouble in the first place.
A prime example is California, where the Democrat-controlled legislature is proposing a plan where the state would purchase up to 45 percent of a home in order to make them more affordable only to black residents, part of a so-called “reparations” package.
In other words, a plan that would discriminate against whites and Asians, to name a few.
This scheme is one of a number of such plans being looked at by a nine-member reparations committee, BizPacReview reported.
That committee was formed last year when California’s feckless governor Gavin Newsom signed the bill passed by the legislature. They met for the first time this week, Cal Matters reported.
“The nine-member task force will draft an apology to black Californians and recommend ways the state might make up for discriminatory policies which could include issuing direct payments to the descendants of enslaved people or passing laws to close racial disparities,” they reported. They did not elaborate on what exactly comprised the so-called “discriminatory policies.”
“It might mean free college at our CSU and our UC systems to African Americans,” said state Sen. Steven Bradford (D). “It might be zero down payment for first-time African American homeowners. We know they have the biggest challenge in homeownership not only in California but across the nation.”
Haven’t we been down this road before? Sub-prime mortgages? Crash of 2008?
Homeownership seems to be the primary focus that tax and spend Democrats in California are homing in on, looking at it as a primary way to “close the wealth gap between black and white Californians,” Cal Matters reported.
They added that Democrats and Newsom are looking to seed the program with $200 million of taxpayer money.
California Democrats also want to spend an additional $115 million a year on “community-based health equity and racial justice efforts” and add “$63 million into the California Reducing Disparities Project,” the outlet added.
The joint ownership program has gotten the attention of most, drawing a ton of skepticism and criticism on social media.
For example, one critic said that such a program would lead to a huge increase in housing costs (California is already among the highest in the nation), huge tax increases and more nanny-state government intervention for builders and owners of such homes.
The end result of this over a decade or two? A massive increase in the cost of homes, an enormous tax increase, and eventually all sorts of intrusive government demands for builders and owners of government-funded homes. https://t.co/OxgdYCxtss
— John Hawkins (@johnhawkinsrwn) June 3, 2021
And what of corruption?
“What a giant bucket of graft and fraud from which to rake off kickbacks and reward left-wing cronies,” one user wrote.
What a giant bucket of graft and fraud from which to rake off kickbacks and reward left-wing cronies.
— BattleSwarm (@BattleSwarmBlog) June 3, 2021
Still others compared such a program to government getting into the student loan business, which has driven the cost of college through the roof, and which has no pushed student loan debt into the trillions of dollars.
This worked so well with college funding.
— Christine Price (@PstafarianPrice) June 2, 2021
“How is that building wealth when the STATE owns half your asset. What happens if you fall behind on the mortgage, does the state get ALL of the house?”
How is that building wealth, when the STATE owns half of your asset. What happens if you fall behind on the mortgage, does the state get ALL of the house?
— Jellenne 🇺🇸🌵🌞 (@jellen805) June 3, 2021
And another, “Someone missed Econ 101. This does not cut the purchase price in half. This causes housing prices to increase. The solution is simply to allow housing construction,” another user wrote.
Someone missed Econ 101. This does not cut the purchase price in half. This causes housing prices to increase. The solution is simply to allow housing construction.
— Austin Nissly (@atnissly) June 3, 2021
This is an excellent idea. It worked super well for student loans, health insurance, pharmaceuticals, and pre-2008 mortgages. There is no way this could possibly have unintended negative consequences!
— Julian Frost (@julianmfrost) June 2, 2021
“cut the purchase price nearly in half”
lolololololololololololol
‘when the govt pays for part of things, they gets cheaper!”
this time it will work, we swears pic.twitter.com/Lr4h9YI5Aa
— Children’s Knife-Fighting Association (CKFA)⚔️🚸⚔️ (@Bugs_Meany) June 2, 2021
When you think of government operations, think the US Post Office and AMTRAK. What could possibly go wrong?
Law Enforcement Today recently reported on Newsom trying to buy California residents off due to his pending recall by throwing money all over the state. For more on that report, we invite you to:
DIG DEEPER
This editorial is brought to you by a former police chief and current staff writer for Law Enforcement Today.
SACRAMENTO, CA- Funny how when a government official is looking at getting his butt kicked out of office they suddenly change their tune and become generous.
Such is the case of useless California Gov. Gavin Newsom, who took time off from dining at expensive French restaurants to use the part of Biden’s multi-trillion dollar “coronavirus stimulus” stolen from the other 49 states to give money back to California residents.
What a fraud.
NPR reports that California, now faced with a massive surplus after getting bailed out by American taxpayers in the name of “COVID,” is poised to give residents of that state a payoff, thanks to Uncle Gavin.
NEW: CA will be expanding the Golden State Stimulus to middle class families — creating the biggest state tax rebate in US history.
2 out of every 3 Californians will now benefit from a stimulus check of at least $600. And families with kids will now get an additional $500.
— Gavin Newsom (@GavinNewsom) May 10, 2021
In an interview Monday with All Things Considered, Newsom, who is subject to a recall effort after millions of California residents signed a petition to do just that gushed, saying:
“It’s a remarkable, remarkable turnaround.”
Well, yeah of course it is, since the rest of the country’s children and grandchildren had their future mortgaged by Biden and the Democrats.
Newsom said the Golden State is poised to have about a $75.7 billion…yes, that’s billion with a “B” surplus, and in the most transparent attempt in history to buy some goodwill with voters, promised to share that with state residents.
According to The Epoch Times, under Newsom’s scheme, and if passed by the state legislature, households earning under $75,000 would receive $600 rebate checks, with families having children getting an additional $500. Not to leave out people who shouldn’t even be here, the plan also provides $500 to illegal alien families.
“California’s recovery is well under way, but we can’t be satisfied with simply going back to the way things were,” Newsom said in a statement.
He continued noting that the plan would “triple the state’s investment—for a total of nearly $12 billion—in the Golden State Stimulus by expanding the stimulus to middle-class families,” the statement said, while adding the plan will benefit two out of three state residents.
According to H.D. Palmer, a spokesman for the California Department of Finance, the cost will amount to approximately $8.1 billion.
State officials “claim” the surplus is due mostly to tax revenues gained from wealthy state residents. Forbes magazine reported that California had the highest estimated debt out of all 50 states, around $363 billion.
In addition to the cash payoff to buy votes, the plan also has the “largest renter assistance package of any state in America, with billions of dollars to help low-income Californians pay back 100 percent of their back rent, their rent for months to come and overdue water and utility bills,” Newsom’s office said.
Newsom’s scheme however has some people questioning the timing, given that he is in the midst of the aforementioned recall effort. Newsom’s critics say that California’s financial situation was caused due to Newsom’s draconian coronavirus lockdown orders, which were among the most tyrannical in the nation.
“Gavin Newsom is making one-time payments to Californians to avoid being recalled—and only because the law requires him to,” said John Cox, one of a number of Republicans running against Newsom on Twitter. “But Californians can’t be bought.”
Instead of making beastly, structural changes and slashing taxes permanently, pretty boy @GavinNewsom is using our tax dollars to avoid being recalled. #CAgov #RecallNewsom https://t.co/t3D7opVoe2
— John Cox (@BeastJohnCox) May 10, 2021
According to a California law passed in the 1970s, the state is required to return money to taxpayers if the surplus hits a certain limit. California currently finds itself about $16 billion over that number.
Kevin Faulconer, who is also running against Newsom as a Republican plans to roll out his own tax cut proposal later this week.
“One time payments for just one year isn’t enough, not nearly enough,” said Faulconer, the former mayor of San Diego. “We need permanent, lasting tax relief for middle-class families.”
I’m announcing my plan for the largest middle-class tax cut in California history.
As governor, I’ll champion this plan on day one.
If California isn’t affordable, it isn’t livable.
We’re going to help you get a break, get ahead, and afford to stay in our great state. pic.twitter.com/a3cf7CdjSQ
— Kevin Faulconer (@Kevin_Faulconer) May 12, 2021
Aside from Newsom ruling like a Venezuelan dictator during the pandemic, he also was playing fast and loose with Payroll Protection Plan (PPP) funds. For more on that, here is a story we did back in December:
SAN FRANCISCO, CA- Just remember—two sets of rules. In an explosive report from ABC-7 in San Francisco, it has come forth that at least eight companies owned or partially owned by California Gov. Gavin Newsom received millions of dollars between them from the Paycheck Protection Program, according to an analysis by the station.
Data released by the Small Business Administration earlier this summer indicated the PlumpJack Group had received $350,000 worth of PPP loans.
However, newly released data showed that a group of PlumpJack businesses under that umbrella had received more than eight times that amount, or around $3 million combined. Those businesses include wineries, bars and restaurants.
Two years ago, Newsom put his ownership interests in the PlumpJack group into a blind trust. That allegedly means that he wouldn’t have knowledge of or a role in the company’s business decisions made during his time in office, the outlet reported.
According to the Daily Wire, ABC7’s 9’s investigative unit, the I-Team said that it “discovered discrepancies” which “appear to raise questions” about how much money had found its way into Newsom’s business interests. PlumpJack Group was founded by Newsom in 1992.
Despite the blind trust, Newsom’s sister, Hillary currently serves as the group’s president.
The I-Team reported:
“While data released by the Small Business Administration earlier this year showed the PlumpJack Group received up to $350,000 worth of PPP loans, newly-released data by the SBA indicated PlumpJack businesses—including wineries, bars and restaurants—received more than eight times that amount at nearly $3 million altogether…ABC7’s analysis found at least nine companies affiliated with the PlumpJack Group received PPP loans.
One of the companies on the lists is Villa Encinal Partners Limited Partnership. State records indicate the name is traced back to the PlumpJack winery in Napa. San Francisco billionaire Gordon Getty is an investor.
According to SBA data, the company received a loan for $918,720 on April 14, 2020.”
According to data uncovered by ABC7, Villa Encinal Partners LP retained 14 employees with those funds. Upon crunching the numbers, the outlet found:
“Hypothetically, if divided equally, each of them would’ve received around $40,000 to cover their payroll over a period of three months—that would amount to an annual salary of around $160,000 per employee.”
According to the requirements of the PPP program, recipients of PPP loans are able to receive forgiveness if at least 60% of the funding is used to keep workers on the payroll.
ABC7 noted that if the PlumpJack Group decides to pursue loan forgiveness, they would have between two to five years to apply. Short of that, the group would be required to repay the loan at a fixed 1% annual percentage rate.
Miryam Barajas, SBA Region 9 Communications Director said however in order for a company to seek loan forgiveness, “they have to certify when they apply that they retained their employees.”
She continued:
“That’s going to include payroll records, documentation filings, there’s a lot of proof that these businesses have to show proving they paid their employees.”
The station presented their findings to Seth Moulton, who is a senior policy analyst with the Project on Government Oversight (POGO), and organization that tracks PPP loans.
“It’s unexpected for a 14-employee organization to get nearly $1 million,” Moulton told ABC7. “The purpose behind this program was to save entry-level jobs, people going in and working on that paycheck. That was what we put this out there for, to stop unemployment.”
ABC7 further reported:
“The average small business loan for California companies retaining 14 employees was roughly $128,000. Yet the PlumpJack entity Villa Encinal Partners LP—that according to SBA data also retained 14 employees—received more than seven times that amount at $981,720.
ABC7’s analysis found the only other California winery that received close to the same loan amount as Villa Encinal Partners LP is Oak Knoll Farming Corp, which retained 79 employees—more than five times as many as Villa. The average number of employees retained for every California winery that received ore than $900,000 worth of PPP funding is 148.”
ABC7 cited the Millbrae Pancake House, which received a $431,400 loan, while retaining 53 employees. They noted for comparison purposes, that’s less than half the amount of money PlumpJack received while retaining nearly four times the number of employees.
The owner of the restaurant told ABC7:
“That seems unfair because there are small family businesses like ours that need that money,” said Erin Burke.
She was forced to close the business on Nov. 29 after 60 years of operation.
“We’re just trying to do the best that we can and survive,” she said. “That money wasn’t enough.”
This situation becomes even more disturbing when you see that a number of small businesses desperate for financial support had a difficult time obtaining the PPP loans, with some being unable to do so. According to the Los Angeles Times, the program ceased accepting applications in August after some $68.6 billion had been directed to 623,000 California companies.
The San Francisco Chamber of Commerce said that a majority of small businesses that were unable to get the PPP loans said the loan size wasn’t enough, or the owner misunderstood the application process.
“I think it’s heartbreaking,” said Jay Cheng, the organization’s public policy director.
“We see huge discrepancies between small business and the kind of loans they go and their ability to get loans and larger companies that are well-resourced and well-staffed and had strong relationships with their banks.”
Yet another company affiliated with Newsom’s business interest is Balboa Café Partners LP, which received a $506,799 loan on April 29, 2020. It was estimated in June that the company employed seven individuals, however SBA filings from the loan application stated they retained 55 employees.
The outlet said they reached out to PlumpJack for clarification on how the funds were spent. They issued the following statement:
“Like many other companies facing extreme financial duress during the pandemic, we used loan monies to protect our workers and keep them employed Our staff members and their loved ones depended on these programs for their livelihoods. Gavin Newsom is not affiliated with the operation of the companies in any way. Any suggestion otherwise is unequivocally false,” said Jeff Nead, spokesperson for the PlumpJack Management Group.
Newsom’s 2019 Statement of Economic Interest said, however that Newsom has an ownership interest in eight companies that are affiliated with PlumpJack which received PPP funding.
According to CalMatters, Newsom’s 2018 tax returns showed he and his wife made $1.2 million from wages and investments—a majority of which came from the wine and hospitality ventures. The outlet reached out a second time to PlumpJack in an effort to obtain payroll record to determine how each of 14 employees of Villa Encinal Partners was paid.
They received the following statement:
“Plumpjack Management Group is operating within the federal guidelines created for COVID-19 SBA loan recipients. These funds have been critical in keeping our staff employed and continuing our operations. Any implication that we have done anything outside of the guidelines (or that we have filed for forgiveness on the loan) is irresponsible,” said Nead once again.
ABC 7 said they reached out to Newsom for comment but did not hear back.
Color us shocked.
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