The California Urn
The State of California is approaching financial calamity as lawmakers there are unable to agree on a budget that closes a $41 billion deficit. California’s absurd budgeting laws that make tax increases virtually impossible, and require dozens of referendum-approved budget mandates, have rendered the state powerless to move on. Governor Schwarzenegger announced plans to lay off 20,000 state workers today, including the shutting down of major public works projects. With ideological Republicans refusing to raise taxes – even with massive spending cuts across the board – the state cannot make ends meet. The state clearly needs to scrap its state constitution and create a new one if it ever plans to climb out of this perennial hole. But that’s down the road. For now, the California Dream, driven in recent years by the subprime mortgage boom, has been turned upside down.
Nothing symbolizes the death of the California dream better than this video of a foreclosure “trash out team” in the Inland Empire near San Bernardino. For the meaning of “California Urn,” see especially the 2:56 mark of this video.
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13 Responses to “The California Urn”
This is exactly why the Republicans of today need to get a reality check. There was a $41 bn shortfall for the budget and $14 of that is to come from tax increases…. The Republicans refuse to compromise. When highways collapse or need repair it will be the GOP who needs to answer. I don't like to pay taxes any more than anyone else, but I am willing to pay my fair share for infrastructure, schools, healthcare and other social programs. And it keeps people in jobs. Too bad the Republicans don't want to pay their fair share in society. They want things their way and not for the greater good if it doesn't benefit them directly.
As I understand it. The California assembly consists of 51 democrats and 28 republicans. Now Im finding it odd to understand how in this climate it can be the GOP's fault on anything. Even 60 percent to pass something still leaves the Democrats 4 votes to spare.
So please explain to us who do not know how the process works out there. How is it the democrats who enjoy a rather large majority are stiffled by the minority party for their spending habits?
Greenschemes,
According to the California constitution, a budget that includes tax increases requires 67% of the legislature to pass. There is literally one GOP Senator (Cox?) who is wavering in the Senate.
The Republicans oppose the budget on ideological grounds- they do not want to raise any taxes. While the Dems have given in to many Republican demands, the Republicans are as rigid as a rock.
I don't know where the Republicans expect money to come from to pay for government services…. but I suppose they feel that money grows on trees. After all when Bush took office they lowered taxes and increased spending, taking us to a $10 trillion+ deficit. It must really be nice to live in the Republican world where you can get something (government services, infrastructure building, schools, etc.) for nothing.
So California wants to raise taxes by 41 billion dollars just to balance the budget?
What will they do next year?
No, California wants to raise taxes by $14 billion, not $41 billion. The remaining $27 billion will be made with spending cuts and borrowing.
But still Elrod My point is what about next year?
I had planned to post on this myself but since my friend Elrod has done so I will comment here.
I do agree that the GOP is wrong here in not recognizing that to balance a deficit this large you need to have both spending cuts and tax hikes to work it out. Indeed I have previously posted on the California Budget and said just that.
I do suspect that Elrod is a bit more enthusiastic about the tax hikes than I am but that is just a matter of ideology.
However it is worth pointing out that one GOP State Senator (Abel Maldonado) is not opposing the budget because of the tax hikes, he's willing to swallow those reluctantly. His issue is that he has been calling for the budget to also include reforms to try and prevent this from happening in the future.
His reforms would include things like cutting off pay to legislators if they don't pass a budget, reviewing the issue of mandates, etc. The Democrats (and for that matter his fellow GOPers) don't really want to consider those reforms.
As GS said, what about next year.
So while the GOP deserves the bigger share of the blame here, both sides have problems.
I wonder if the gop deserves the bigger share of the blame here.
California is a democratic state. It is that by a rather large majority. As such they are in charge and have been for years. Why is it always the minorities fault when the majority does not know how to govern?
“Why arent we screaming to balance the budget in the US Congress?”
It's politically incorrect. Note who's in power in Congress now. Besides, there's a slump, so we have to hurry and spend all we can, now!
Note that with California (I grew up there and am familiar with the Dems' big-spending ways in that state) and the rest of the states: When they get aid from the federal government, will they use it wisely while reforming their own budget process, or just using it as the crutch of the moment and even coming to rely on and even expect it, and simply count on more bailout money coming in the later months of this year?
States are facing a great fiscal crisis. At least 46 states faced or are facing shortfalls in their budgets for this and/or next year, and severe fiscal problems are highly likely to continue into the following year as well. Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion.
See our state governments cant save for a rainy day. Our Federal government cant save for a rainy day and yet here we are telling our people to spend like theirs no tomorrow and by the gods dont save a damn dime.
What a mess we have gotten ourselves into and it is precisely this that leads us to deficit spending as a way of life until their is no more money to lend.
What about next year??
“The fundamental madness about taxes is that neither side have a clue how to use taxes appropriately.”
They don't know what good tax policy is. The Dems' idea of tax policy is to couple the combination of greed and envy with social engineering and silly dreams, while the GOP often acts as if it knows nothing at all other than to reduce what the Dems largely if not wholly have created.
Then comes the problem we're going to see once again with this badly crafted “stimulus” legislation, namely the latest example of the worst, largest problem that has existed in Washington for decades in addition to excessive interventionism: Washington's spending.
The bill is being signed and while the “challenged” suckers can get all bubbly and even expect instant salvation, the rest of us are warier.
Case in point — the big D and the big M that's the theoretical antidote and powerful last resort if performed to the utmost:
http://www.stlouisfed.org/news/speeches/2009/02…
“States are facing a great fiscal crisis.”
1. These times are special, but they also serve to expose the ongoing long-standing problems with many of the states — I am quite familiar with California, and was amused for a year or two in New York as well. In California's case, spending went out of control during the bubble years. There was no discipline. Never mind any concept like a rainy-day fund. (Does anyone with experience in life believe governments would not refrain from laying their paws on the money in such funds without it being a proverbial rainy day? Doesn't “general fund” or “general revenue” experience say all that need be said?)
2. The behavior by states is separate from, but is a “softer” version of, something recognizable in city governments, and most notably in the case of the centroid of liberalism in the nation then and now, New York City, which though years of liberal policies BANKRUPTED ITSELF BY THE MID-1970s, the stellar example of the fruits of the same kind of behavior we see too often in states — over-spending, thinking of all new ways to expand the public sector at ever-growing costs, not only not saying “no” to public sector unions and other interests, but stupidly saying “more” instead. This has, you recognize immediately, been the same problem the federal government has exhibited since the 1930s and in particular since the 1960s, almost never arrested or reversed. The trend remains obvious. The only constraints and grounds for reform have been circumstantial and often just compelled by balanced-budget laws.
3. Will the states actually seize these times to press more than ever for reform — as with individuals, who will take a pay reduction rather than a job loss, will governments face reality and even reduce their demands and expectations, perhaps even truly reform them? Or will they simply behave in little more than a stupid or a psychopathological manner and simply take whatever relief Washington sends to them and not change, and even rely on or expect more relief in the future?
“State of the states”
http://www.cnn.com/2009/POLITICS/02/17/budget.s…