Posted by
rycK on Tuesday, January 15, 2008 7:36:04 PM
The Financial Collapse of California and the Need to Hike Taxes
The notion that California, always the progressive state and the leader of new trends, is going broke is very far from conjecture. Apparently, the current 2008 deficit is projected to be about 14 billion dollars. It is not exactly a secret that the Golden State has tarnished a bit and the luster is mostly lost. It is public knowledge that the health care fiasco has gripped California as in no other place and this project, alone will break the state. Some interesting form of ‘fiscal emergency’ is now or will be in effect soon. The governor has proposed “…[10% or so] cross-the-board cuts to government programs to close that gap.” Apparently they are running about 550,000,000 dollars per month short. With 31 million people this amounts to about $17 per month per person or about $50 a month for the average worker. It is alleged that the ‘rich,’ the nasty old capitalists and entrepreneurs pay about 80% of all taxes. They can pay 90%!
So, what is the problem?? Well, here is the usual rejoinder when spending cuts are proposed:
We have to rehear this old stale bromide from the state Senate President Pro Tem Don Perata: “I think if he went around San Diego right now and said, ‘Would you like me to cut your fire service, or your police service, or any other of the emergency services by 10% – you want 10% fewer inspectors to see if you can go back in your home?’ they'd say, ‘What, are you out of your mind?’"
And we all thought Prop 57[ from 2004] would fix this.
So, we play the political game that works as if nobody wants to cut anything, or the spending is ‘essential’ as in education, police, fire and such, then there will be no cuts and the debt will pile up. Didn’t New York City do this? That was okay. Arnold is thinking about releasing about 18,000 non-violent criminals upon the public to save money from incarceration expenditures. Many or most of these will be drug addicts an drug peddlers. This is a celebratory exercise in the Left Coast as drug consumption is considered a duty as well as a recreation.
Let us suppose they just let the debt ride. What then?
[1] The credit rating of the state will fall to somewhere between beggar and unwashed hobo and they will not be able to barrow anything.
[2] The money has to come from somewhere so if they cannot barrow then they cannot make payrolls and other expenses so government will just stop.
So, what is the problem? Isn’t this the prize for overspending? We should reward these socialists for mismanagement of their economy?
The New York Times and any decent liberal or ultra-progressive would have two snap answers to this problem:
[a] Raise taxes.
[b] Get a bailout from the Feds.
So, what is the problem? Do the good folk in California really think that their 50+ Representatives to Congress will fail to grunt and grab some more federal tax monies to ‘tide them over a while?’ Or, that the Speaker of the House would not get some ‘relief’ bills speedily placed on the docket for a slam-dunk House vote without even showing the bill titles to Republicans? Or do they think this might be another wonderful ‘bipartisan’ issue to ‘save’ the state in an important election year?
So, what is the problem??
How about a budget plan?? Oh! That failed. It seems that as far back as August 2007, they had the problem solved:
“Governor Arnold Schwarzenegger signed California’s state budget today that creates a $4.1 billion reserve fund, fully funds education and public safety and pays down the state’s debt. He also followed through on a commitment to use his veto pen to reduce spending by an additional $700 million. For the fourth year in a row, the budget does not raise taxes.”
No tax hikes?? What kind of economic leprosy is this?
There is no problem. The New York Times would applaud a fat tax hike any where in the world as this would milk the evil capitalists and restore some more socialism to the ’poor.’ The Times would applaud any form of freebee from the Feds as well. Paul Krugman never saw a tax hike he didn’t celebrate, so there is not problem.
Raise the Taxes to the Roof!!