1. As I told Dan at “International Liberty”:

    Dan, you failed to note that the people who have come closest to a balanced budget, and coincidentally, have done the most to promote free enterprise in California, are Democrats, “liberals” by your definition, including the current Gov. Jerry Brown.

    California’s problems do not stem from too much taxes, too much government, and too much spending, but from something quite the opposite. Years ago, probably before you were born, California voters got suckered into passing a Proposition 13, which limited spending dramatically and made it difficult to raise taxes. Consequently, to keep giving handouts to the wealthy in the form of reduced taxes, California had to cut spending on children, especially in education. When Prop 13 passed, California had free tuition at two series of great state university systems, arguably the two best university systems in the U.S.; public schools offered a lot of electives in artistic fields, and up to five different languages in middle schools and high school. California kids scored at or near the the top of many interstate comparison tests. Roads were great, which led to a flood of industrial locations in California, where raw materials could easily come in and finished goods could easily be transported to national and international markets. Bright, young entrepreneurs flooded into the state and created huge pockets of new industrial development and product development, enticed by a great systems of public parks and aggressive environmental protection which improved the health of citizens and provided fantastic recreational opportunities, in the oceans, deserts and mountains.

    After four decades of failing to keep up those systems, now at last California is in trouble.

    But the trouble comes because so-called conservatives (wastrels, really) cut spending and cut taxes so the golden-egg-laying goose would die, “the better to get to the gold inside.”

    Even today Californians have better health than Texas. California leads Texas in business development. Texas basks in the glow of California-born companies that put outposts in Texas — Apple, and Hewlett-Packard, and Lockheed-Martin, among others.

    Texas is rushing to screw up what it had right, following California’s example. Your comparisons should note where Texas is on the Prop 13 Failure Curve (“Laffer curve?” Laffer never could put numbers to that idea; is there any serious economic work that supports the claims you make for Laffer’s now-defunct idea?). Texas is slashing spending on education, health care, agricultural support, and roads. Texas is losing traditional industries it had by dint of being in the right place — beef has been cut by 50% in the last two years; cotton farming is near failure because of Texas’s failure to protect, preserve and recharge water resources.

    Prince Georges County, Maryland, was the first American municipality to follow California’s Prop 13 madness. By 1983, PG County schools were disasters, and so were the roads. Marylanders saw the light and repealed the TRIM Amendment, and Prince Georges County is booming today.

    If you won’t pay attention to the economics and failed theories there, won’t you at least pay attention to the actual history?

    1. Not sure that dog will hunt. Massive revenue growth and more massive spending including on “education” and lavish pensions surely occurred during the period post Prop 13. See for example: http://reason.org/files/a2ec7caccc5d660e870c4a21526ef5f8.pdf, Anyway, one ought not excuse spendthrifts who have failed to live within their means or the means of their taxpayers. I don’t think “balanced budget” means what you suggest it means. Rolling over non-amortizing term debt at lower interest rates and identifying lower projected interest liabilities does not result in “savings.”

      California’s problems have been long in the making.

      1. Interesting study. A potentially major flaw: The study starts AFTER the administration of Gov. Wilson (some charts go back to Deukmejian), and therefore assumes the Prop 13-hobbled budgets, and assumes that the damage done to the California government, especially schools, by Prop 13 was not done.

        One ought not excuse thieves who failed to pay their fair share of support for their government and failed all definitions of communitarian duties.

        Prop 13 was directed to protect the very rich, and aimed at crippling the poor and working class people trying to make a go of it. It was a dramatic, incredibly regressive tax cut for the rich, and an astonishingly damaging shot at education, the great defense of our democratic republic. One ought not excuse terrorists who try to bring down America, especially not with the excuse, “they are rich and wave flags.”

        The destruction of California’s education system, the distortion of its tax system, all to protect the wealthy from shouldering their fair share, is a Shakespearian tragedy — or maybe a tragedy of Genesis-Exodus proportions.

        Take a look at the benefits, and the harms, of Prop 13; ignoring the gutting of the school system before starting a “balanced budget” accounting is absurd, and misleading at best, if not an outright lie.

        4.3 Negative effects

        4.3.1 On the housing market Sales disincentives, less individual mobility, higher housing costs Minorities affected more Effects on commercial property owners
        4.3.2 On the state tax structure Unequal assessments based on purchase date result in regressive taxation
        4.3.3 On sales and other taxes Other taxes created or increased
        4.3.4 On cities and localities Greater effect on coastal metropolitan areas than on rest of California Loss of local government power to state government Resultant planning changes, loss or degradation of services, new fees
        4.3.5 On education and public services Effect on public schools Loss of funding for libraries, city services

        Reminds me of a study of individual health costs I got on a guy our company covered. The conclusion was that he was costing way, way too much; two years before he had contracted an infectious disease that the company had recommended we stop paying to be vaccinated against. The vaccination would have cost us $50 if the gold-plated needle was used. His hospitalization was zooming northward of $500,000.

        It costs a lot more to restore a human, or human institutions, once they’ve been brutally assaulted. Of course, that makes it more difficult to “balance the budget.”

        But unless that catch-up spending is done, the U.S. spirals down into third-world status.

        Whose side are you on?

  2. Sorry – I can only see the spending go up, up, up, faster than inflation and population growth. Spendthrifts usually first complain when sugar daddy stops the cashflow.

    By the way, a guy ought to save and pay the $50 bucks needed to protect himself from catastrophe and not count on others to do that for him.

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