California: Failed State

[j_b]

The current troubles do not account for the budgetary crisis encountered during the Gray Davis era and prior. Yes, a drop in tax revenue could account for both crises but state spending appears to be the greater factor. If spending were restrained and monies set aside for downturns, then perhaps they wouldn't be forced to take draconian measures to balance the budget.

 

You are looking at the problem the wrong way. The cost of social services is high because people can't afford them on their meager and decreasing wages. State spending and individual debt have the same cause: most people haven't seen any of the so-called economic growth over the last 30+ years.

[j_b]

Someone's got to pay-up if California's public employees are going to be insulated from the economic realities that everyone in the private sector has to contend with.

 

Indeed someone has to pay and public employees may have to give up something during this crisis but they are hardly the source of the problem. A crisis manufactured by a widening of inequalities won't be fixed by leveling at the bottom for 99% of the public. Transfer pricing and other tax evasion schemes by corporations should be part of any plan that claims to address the issue.

[JayB]

California budget shortfall is due to the precipitous drop in tax revenue (of which 50% drop in sales tax relative to last year) that occurred as unemployment rose and the housing bubble burst. For much of the past decade, californians like many others, have used their homes as collateral to sustain consumption because real wages declined. The era of make believe wealth is over and it's likely to get worse.

 

Agreed. I suspect that this is without even factoring in the tab for public employee retirement costs.

 

you say this as if public employees aren't entitled to retire.

 

Your post above that, where you lambaste the California legislature and the public employees unions for imposing draconian spending limits

 

 

i did no such thing. You ought to consider remedial reading classes.

 

on the state in pursuit of a Thatcherite dreamworld, is fascinating.

 

fascinating? is that the extent of your thought process on the topic?

 

How does that argument square with the figures below?

 

http://www.statemaster.com/graph/eco_tot_tax_bur-total-tax-burden-per-capita

 

http://www.statemaster.com/graph/eco_tol_tax_bur_pergdp-total-tax-burden-per-gdp

 

http://www.statemaster.com/graph/eco_per_inc_percap-economy-personal-income-per-capita

 

http://www.statemaster.com/graph/eco_wel_cas_tot_rec_percap-caseloads-total-recipients-per-capita

 

 

How well does this data comport with your model/hypothesis?

 

 

do you have anymore strawmen you'd like me to answer? There is nothing in these numbers which contradict what I said. Now if you want to make the effort of constructing an argument, I just may answer it in detail.

 

So the problem down there - per you - wasn't that taxes were too low, and the profits generated in California weren't taxed too lightly to fund the budget?

 

Just one other point of clarification before you go on - when you talk about wages do you mean total income (wages + benefits + transfer payments from the government*), or just money wages? Given the magnitude of benefits and transfer payments - this is an important distinction.

 

Also - is this where you'll reveal how erecting barriers that restrict trade at some arbitrary level (between individuals, neighborhoods, towns, counties, states, or countries) and imposing more stringent price controls on labor will increase real wages (money wages + benefits)? Yes or no answer would be fine here if you don't care to elaborate.

 

*This includes welfare, the EIC, federal subsidies for mortgage interest, etc.

 

 

 

[Jim]

They do have quite a mess down there. They need to change they way they vote on budgets to start, requiring a super majority is stupid. And the initiative process has contributed - putting up artificial barriers to revenue while requiring payment for voter approved programs without a comprehensive governing strategy. Interesting that the Governator now has a larger budget decifict compared to Davis, who Arnold railed against as being ineffective and deficit prone. I wonder if he wishes that he stayed in the sequel business.

[Dechristo]

...the Governator ...Arnold ... I wonder if he wishes that he stayed in the sequel business.

 

He's somnambulistic since the segue from sequels to Nyquils.