California budget mess may spell doom for Obama spending plans
By
Wing Chun Geologist
on July 6, 2009 at 05:57 am
Despite some of the highest taxes in the country, California is broke. The progressive-socialists in the legislature have spent the state into oblivion. RINO Arnold could have brought some fiscal discipline to Sacramento, but instead acted like a rubber stamp governor, approving every spending and tax increase the Democrat legislature approved.
The silver lining, according to Kevin Hassett of Bloomberg, is that moderate Democrats in the U.S. Senate might be looking at California as a failed state who’s spending stands as an example of what not to do.
Actually the state, which is already has at least the 3rd highest taxes has had the largest tax increase in California history imposed on it last spring. The massive tax increases didn’t close the buget gap because spending levels were set according to revenues at the peak of the reat estate bubble.
If there’s a silver lining to the mess, that silver lining is in Hollywood on the Potomic not in Sacramento.
As bad as things are here in California, at least we can provide an example to the rest of the country of what not to do.
California has made itself into a cash cow for public sector unions, a generous haven for illegal aliens, and an equally generous haven for those not inclined to work. Make no mistake, excessive spending is what broke California. We can expect Obama's far more massive spending to break the United States. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTKrn1jUJwdE
The silver lining, according to Kevin Hassett of Bloomberg, is that moderate Democrats in the U.S. Senate might be looking at California as a failed state who’s spending stands as an example of what not to do.
Last week, we discovered that the state of California will gladly pay you Tuesday for a hamburger today.
With California mired in a budget crisis, largely the result of a political impasse that makes spending cuts and tax increases impossible, Controller John Chiang said the state planned to issue $3.3 billion in IOU’s in July alone. Instead of cash, those who do business with California will get slips of paper.
Actually the state, which is already has at least the 3rd highest taxes has had the largest tax increase in California history imposed on it last spring. The massive tax increases didn’t close the buget gap because spending levels were set according to revenues at the peak of the reat estate bubble.
The California morass has Democrats in Washington trembling. The reason is simple. If Obama’s health-care plan passes, then we may well end up paying for it with federal slips of paper worth less than California’s. Obama has bet everything on passing health care this year. The publicity surrounding the California debt fiasco almost assures his resounding defeat.
It takes years and years to make a mess as terrible as the California debacle, but the recipe is simple. All that you need is two political parties that are always willing to offer easy government solutions for every need of the voters, but never willing to make the tough decisions necessary to finance the government largess that results. Voters will occasionally change their allegiance from one party to the other, but the bacchanal will continue regardless of the names on the office doors.
California has engaged in an orgy of spending, but, compared with our federal government, its legislators should feel chaste. The California deficit this year is now north of $26 billion. The U.S. federal deficit will be, according to the latest numbers, almost 70 times larger.
If there’s a silver lining to the mess, that silver lining is in Hollywood on the Potomic not in Sacramento.
As bad as the California legislature has been over the years, it has never entered a fiscal crisis like the one that we face today and then doubled down with a massive spending increase. In the end, when times got tough, patriotic and sensible Californians of both parties stood up and began acting like adults.
Maybe the same thing is starting to happen in our nation’s capital. The key players in Washington are Senator Evan Bayh and 15 Senate Democrats who joined him this year in forming a coalition of moderates. One thing that has distinguished moderate Democrats from the garden variety of the species is heightened concern about fiscal responsibility.
Off a Cliff
With the price tag of Obama-care likely to exceed $1 trillion, moderate Democrats face a simple choice. They can jump off the cliff with the president, or they can stay true to the principles that they have espoused throughout their careers.
There are reassuring signs that principle is winning. One of the most expensive components of the Obama plan is the so- called public-insurance option, which opponents fear would result in massive government subsidies. Senator Mary Landrieu said that she is “not open” to a public option that will compete with private insurance.
Many other Democratic Senators, including Ben Nelson, Blanche Lincoln, and Tom Carper, also oppose the public option. As the cost estimates increase and support wanes, the Senate Finance Committee is even going as far as to pursue its own health-care plan, meaning that the health-care end game is now in sight.
Tax Bite
Moderates might support Obama’s health-care objectives if the bill also included tax increases to cover the spending increases. But those tax increases would likely be unpopular, making it almost impossible to pass a bill.
Given the increasing public concern about deficits that heightened significantly last week because of the California crisis, there are only two possibilities left. Either the Obama plan will come crashing down or Senate Democrats will concoct some bill that has health in the title but costs almost nothing and does even less. With Al Franken arriving in the Senate and providing Democrats with a crucial 60th vote, the latter seems most likely.
As bad as things are here in California, at least we can provide an example to the rest of the country of what not to do.
California has made itself into a cash cow for public sector unions, a generous haven for illegal aliens, and an equally generous haven for those not inclined to work. Make no mistake, excessive spending is what broke California. We can expect Obama's far more massive spending to break the United States. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTKrn1jUJwdE
