Jim

Next round: OLYMPIA – The gap between Washington’s projected state revenues and current expenses grew to about $5.1 billion for the coming biennium, prompting a call from Gov. Chris Gregoire for the Legislature to focus on painful cuts rather than budget “trims.” The Legislature will use this forecast to craft a budget of about $31.9 billion for the two-year budgeting cycle that begins July 1. If lawmakers can’t do that before April 24, the scheduled end of the current legislative session, they’ll need a special session. “We cannot trim our way out of it,” Gregoire said two hours after the forecast was announced. “Cuts will be felt everywhere around the state.”

"The stone age didn't end for lack of stones." If you allow prices to coordinate supply and demand, then increasing scarcity drives increasing efficiency, conservation, and substitution. If oil does start to get extremely scarce relative to effective demand, we'll switch to something else to fuel transport before we come anywhere close to exhausting every last oil-field. I'm hoping for so much - least for my kid and her cohorts.

No, no, a generic "you". I'm with you. I always thougt that after reiterment the way to go was move out of the city and find some elbow room. Makes less sense as I get older. Plus there's likely more Bingo games in town anyway!

...and why would you want to live in the 'burbs and have a long commute? Hmmm. Startups in simple bicycle production?

Talk about going long! The energy card is the one different item now, however. Don't know when that one will come to play.

I'm on the phone on hold to my broker right now. Betting the farm that treasury bill interest rates will rise. Yes, you should do the reverse and go long on T-bills with every nickel you have. Whew....rolling the dice here. Risky business..... Oh man - not sure I'd jump on either wagon big time.

Don't think we'll see the second coming of Weimar-style inflation but negative real rates and quantitative easing = consistent inflationary pressures on most commodities. Had this discussion with a good friend the other day. Tough to hedge as a little guy without trading costs eating up any gains. Pretty much all you can do is minimize debt and stay liquid. Lots of scary downside risks in just about anything you can hedge in. People with local knowledge of which neighborhoods have upside potential and lots of cash could find a haven in busted real estate markets that are waaaay into the cash-flow positive zone. Good friggin' question! I guess it depends on how old you are and what your comfort level is regarding our crawl towards energy crunch time. 15 yrs? 30 yrs? Stuffing it in the mattress seems premature but the alternative.....?

Are you a pentagon advisor in your spare time?

but it's a sunk cost -- we already paid for them. i think the boys will feel nekkid now that they're gone though, and it's not like anyone in charge is gonna tell them no when they ask for a restock, right? i hope this thing works, but the fact that i don't even know what "works" means in this situation isn't a good sign - is there some sorta libyan jeffersonian over there ready to jump up and regulate soon as the big-Q is scragged? You're again asking too many logical questions.

That would be a Lagamorph actually.

Wages fine. Unfunded pensions with auto increases despite the economy. No. So another 6% from the WA budget. Where's should it come from in your opinion? certainly not from austerity measures as it will compound the problem Tighter budgets when the economy is not good - it's temporary and helps reduce the pressure on the budget. When the economy improves, the "austerity" is relaxed. Damn, you're dense. What a concept. "Unlike the federal government, states are not able to issue debt routinely. Issues of general obligation debt require at least the approval of the legislature and in many states, voter approval. The issue of revenue bonds requires legislation to create an agency to issue bonds and the creation of a revenue stream to repay the debt. These practices mean that the issuance of debt is fully in the public view. It is extremely rare for a state government to borrow long-term funds to cover operating expenses, although. Louisiana did in 1988 and Connecticut did in 1991. There do not appear to be any other examples of this practice from recent years."

You seem to throw bombs at anyone's opinion but have no solution of your own. How convenient.

Private companies do it all the time. And w/r/t retirement... so do individual employees at private companies. Sometimes you have to cut 401k from 10% to say 6% when times are not so good. Sometimes you even have to cut below the amount where you get matching funds. That's life, j_b. Some kind of variable bonus compensation that's indexed to economic growth over and above a particular floor would do wonders for aligning the incentives of the public and private sector workers, and would serve as an automatic belt tightening mechanism during recessions. Seems like a reasonable idea that actually tries to address, for instance, reality.

Wages fine. Unfunded pensions with auto increases despite the economy. No. So another 6% from the WA budget. Where's should it come from in your opinion?

"Idealism is fine, but as it approaches reality, the costs become prohibitive"

Here we go. More of the same. http://www.komonews.com/news/local/103063499.html

Private companies do it all the time. And w/r/t retirement... so do individual employees at private companies. Sometimes you have to cut 401k from 10% to say 6% when times are not so good. Sometimes you even have to cut below the amount where you get matching funds. That's life, j_b. Radical!

as I already told you many times, to everyone his role. Mine isn't to be a sycophant for bashing the character and worth of public employees while pretending that is going to solve the fiscal crisis. Your position is no different than Obama's when he caves in getting nothing in return. Translation: My ideals are not well enough defined to offer any practical solutions

Well, let's look at WA's situation that you quote. The public rejected every tax measure in the past two years. The exception is school levies, which generally pass than not. So the pie in the sky rhetoric is great - it's not helpful. So what exactly are you proposing? While I disagree with some folks on their solutions, I'll entertain any that appear thoughtful, practical, and use real math. Ideology is a wonderful thing, until you actually have to make public policy. Much of the arm waving I hear from the left includes no practical solutions to folks having to deal with the real world of public policy.

I figured another non-answer was in store. Cheers

Still waiting for some practical advice. Or is it to low on the scale to actually get dirty trying to work out public policy?

Nice dodge. If you want to be taken seriously then stop avoiding a straight-forward question. If you were the major of San Jose what would you propose now that services are bone bare? keep pretending that not paying people their fair share is going to address the root of our fiscal problems like exploding healh care costs, no taxation of those who can be taxed, cratering wages and benefits, mass unemployemnt, etc... All local issues as one can readily see. One last try at a logical discussion (I know, I know). You, JB, are a key advisor to the Mayor of San Jose. You have cut services to the bone to keep a balanced budget over the past 5 years or so. Further cuts to services are quite impossible without affecting safety and welfare of your residents. You have a month to implement something. Go!

Nice dodge. If you want to be taken seriously then stop avoiding a straight-forward question. If you were the major of San Jose what would you propose now that services are bone bare?

Come on. Jim's suggesting some very reasonable (and likely unavoidable) solutions. Everything isn't an 'us' versus 'them' thing. FACT: most states MUST balance their budgets by law. Constitution and all that. FACT: They can't right now OPINION: Bringing retirement contributions in line with private sector norms is one of the least painful ways to do this. Recognizing a real problem and trying to solve it in a real and fair way is what 'our side' is supposed to do. Science based reality and all that. You seem to object to any proposed solution save 'grow the economy'...which is precisely the kind of 'wish your way out' proposal the 'other side' typically pursues. I think tweaks like this, in the long run, will aid public service workers and sustain vulnerable programs. There is nothing wrong with being fiscally conservative while pushing a progressive agenda. It just makes sense in the long run.

Well then give me a practical solution that say, the mayor of San Jose or Gov Gregoire can implement in the next month to balance the books. Honestly - something, anything but abstractions. The pension thing is something else - that will change, one way or another over time. We just don't - have - the - money.