Wednesday :: Dec 3, 2008

Borrow and Spend Forever, Baby

by paradox

His Tricepness, Governor Arnold Schwarzenegger, just waved a magic Sacramento scepter of fiscal crisis and called a special session of the legislature to solve California’s 2009 budget calamity. Arnie and the legislature had locked horns and squabbled endlessly over the entire summer to finally produce a budget that left everyone woeful and disgusted, but with new numbers from an economy gone to hell Arnie has the power to call a Super Special Solution Session. All this year’s budget work done before? Never mind!

California does not have the luxury of deficit spending, an allegedly balanced budget must be passed and signed every year, another never mind effortlessly danced around deficits by calling them bonds. Anyway, this year’s endless budget farce and every ridiculous annual fight that preceded it always ends in failure for the simple reason California cannot raise adequate revenue, the Republicans still have enough power to scream higher taxes rob the American Experience of any meaning (I know, I know) and with implacable obdurateness will not allow taxes to be raised.

After enough years of stupid abuse from children who cannot accept even the most basic tenets of logic, maturity and sacrifice California’s fiscal system is truly out of control, the latest number hurled about is a $28 billion annual shortfall with at least $10 billion more in mandated spending, the freaking judicial system is forcing budgetary spending for more prisons. So now we get the Super Special Solution Session, greeted by seasoned Sacramento watchers with a remarkable sneering condescension of boos, catcalls and cascading contemptuous flatulence, not one California soul thinks a real long-term budget answer will arrive here.

Because raising taxes requires a super-majority and no matter how much political dog shit it delivers to them Republicans still desperately hurl about the infantile stupidity cutting taxes raises revenue, that somehow losing 5% of disposable income at $200,000 a year means wailing destitution. It’s difficult to tell which facet of the tactic is more amazing, that they would still cling to it after everything has gone to hell or that they could actually get away with it.

Because if Republicans are masters of obdurate immaturity their Democratic brothers and sisters are the aristocracy of wilting political lilies, Stand for Nothing didn’t arrive as our national and state brand from nowhere, it was richly earned. It really doesn’t matter how or why, the fact remains the Democratic Party or any official has made the crystal clear case that government services require taxation, right now taxes must be raised to sustain Californian society, not bring it down.

Arnie has seen the light, in his dim regressive view, and has tried to jack up the notorious car tax and sales tax to keep everything from falling apart. These are the worst ways to get more revenue, and until we get Democrats who passionately fight with the correctly reality of defending good government we Californians are going to get the budget failure we deserve. Would have been nice if the Republicans were rational responsible adults in our time with the country, but it’s not the world we live in, deal with it or watch the state blow up.

Gazing out from this woeful Pacific wallow wistful minds swing toward the heavenly eastern DC shores of endless borrowing if need be, the bonds really are called deficits there and Treasury spits out an awesome scope of them, gigabazillions are totally available for any scenario into the future, reeking Republican hypocrisy, saintly Keynesian common sense and economy gone to utter hell completely demand it.

There seems to be a blessed consensus, this time at least, that this is the correct necessary thing to do, but there’s still a little problem here: some day, in some way, all this borrowing will have to be paid for. If we’re essentially borrowing from ourselves, as Krugman says, why do the Chinese expect to be paid back for the mountain of US Treasury notes they have? If in fact government services require revenue why is President-elect Obama going to cut taxes in a time of great borrowing? Aren’t Democrats supposed to be different?

Concerned citizens wondering how this basic calamity of demanding government work without adequate fair taxation should be watching how the 2009 California budget imbroglio works out, push has really come to shove here, and it will be interesting to see what choices are really finally made, will government be defended by Democrats or allowed to be smashed in a fit of screaming stupidity?

Some day, in some year, the precise same fiscal forces in play will be duplicated at the federal level, there really will be no other choices but to either raise taxes or smash the place to ruins. The Democratic Party has so far show no willingness to step up for that, but some day we will have to.

paradox :: 5:35 AM :: Comments (28) :: Digg It!