2 Thoughts on California

1) Structural deficits are problematic over the long term, and if California had the ability to run a deficit, that ability would not make the state’s bigger issues go away. But while a crisis is good for creating the will to force change, a crisis is also a pretty rotten time to actually make changes, since there’s no general economic surplus to use as a cushion. And there’s nothing wrong with running deficits in an of themselves. Just as a matter of broader public policy, why not allow states to run deficits, within certain limits — to have a stronger version of the stability and growth pact. If one doesn’t want states to have to make nasty pro-cyclical cuts in recessions, and if one doesn’t want to set up a regular system of federal bail-outs for troubled states, then why not give them a little flexibility (with the proviso that if the ten-year moving average of the deficit isn’t zero, federal money destined for state spending will instead be used to pay state debts)?

2) What’s the right amount of democracy? Progressives have become increasingly incensed at the anti-majoritarian rules of the Senate, which seem specially designed to avert popular, and often sensible, progressive legislation. On the other hand: ballot initiatives.

Comments

[a. palmer jr.:]

California has a simple problem with a simple solution, quit spending more money than they're taking in. It's not popular with the government dependent society to hear they can't have their free health care, food stamps to trade for liquor and tattoos, free housing, etc. but it's something California must do or figure out how to bring more money into the state treasury. Since every state is required to have a balanced budget I guess the Governator may have to join Bernie Madoff in a home for the fiscally impaired.

Jul 15 09:10 AM

[TCK:]

California is the model that Obama is using for his vision for all of America.

Jul 15 09:15 AM

[Gregman2:]

Two points: (1) Constitutional Convention; and (2) State Employee Unions/Pensions. The tax revenues aren't there to support the initative mandated spending. The state is bankrupt yet the state employees/retirees are in denial. Same as with BART employees--there's no moola, folks. Get it?

Jul 15 11:59 AM

[Chancer:]

By that standard, CA should be the "gold standard" of liberal paradise.

Instead, CA is a mess, caused by liberals.

CA to the USA: "just look. The whole country can be just like us."

On Jul 15 09:15 AM TCK wrote:

> California is the model that Obama is using for his vision for all
> of America.

Jul 15 01:14 PM

[Chancer:]

No moola, beacuse it mostly goes for high wages, benefits, and pensions of CA public sector employees, who are paid 45% higher than for similar jobs in the private sector. And number of state employees has grown significantly over past several years.

There is no justification for unions when the employer is the "benevolent all caring (per liberal terms)" government. Further, the union contract negotiators for the employer (state) are basically "no shows" as they just rollover like trained pooches for whatever unions want. No one is representing the interests of taxpayers. That is a prescription for a failed system.

Without Prop. 13 and the 2/3 majority requirement to raise taxes, liberals would have already doubled CA taxes, which would continue upward without limitation.

"Constitutional convention" is code for more monopoly power to the liberals without limitation. Liberals have already hi-jacked that idea before it can begin.

Things have to get so bad in CA, that people rise up and take the state back from the special interests: unions, environmentalists, and other liberals.



On Jul 15 11:59 AM Gregman2 wrote:

> Two points: (1) Constitutional Convention; and (2) State Employee
> Unions/Pensions. The tax revenues aren't there to support the initative
> mandated spending. The state is bankrupt yet the state employees/retirees
> are in denial. Same as with BART employees--there's no moola, folks.
> Get it?

Jul 15 01:25 PM

[TinyTim:]

"And there’s nothing wrong with running deficits in an of themselves. Just as a matter of broader public policy, why not allow states to run deficits, within certain limits ..... then why not give them a little flexibility (with the proviso that if the ten-year moving average..."

This is the most dangerous idea I've heard in years. Politicians at the Fed level are irresponsible. Politicians at the State level are stupid and irresponsible. Want to see how fast we can come up with 20 definitions of a 10 year moving average for whatever gets us out of the current bind? Check CPI changes.

I'm more for going the opposite direction. Let's get a balanced budget amendment while there's still a country left.


The Senate has "anti-majoritarian rules" for the same reason the terms are longer. Theoretically, so Senators can have a different perspective than the House. More long term view and able to stand up to the "tyranny of the majority", as in initiatives.

Jul 15 02:19 PM

[lastboyscout:]

Since we are all theoretical and all, if I was running a state like Pennsylvania. This year my budget would be 80% if expected income. The 20% not budgeted would either be put away or used as a cushion. If everything goes right, no cushion needed and after 5 years, I have 100% of my 6th year budget. Still budgeting 80% of the saved money, the collected revenue of the 6th year would be set asided for year 7 and so on. from then on, If I need a cushion, I have the 20% not budgeted. If I don't need the 20% that year, it goes back to the people. Therefore, after 5 years, the budget is made based on money in hand and not a theoretical income.
Of course, restraint to budget all the money is critical. In my perfect world, that is how I see it. What if's are Fun!!

Jul 15 05:50 PM

[devassocx:]

The entire system is rigged against the taxpayer and for the
government, both in California and at the Federal level.

Something is going to blow at some point and I sense that
the people are getting real tired of their current governments.

Jul 15 07:30 PM

[norom:]

Prop 13 did it. Pure and simple. Also, people are fleeing California in droves. When your most productive citizens leave there's really not a whole lot you can do. Cali let special interests manage the state's affairs with elected leaders scrounging up money to finance the waste. Oh well. Its a good lesson for everyone else. California is a state but has an economy the size of a European nation so, yeah, it could happen elsewhere.

Jul 16 08:00 AM