First, Do No Harm
The ongoing budget crisis certainly highlights the need for the long term reform of our Government. Among those reforms needed are (1) a true budget cap, (2) a two year budget cycle, (3) costs benefit analysis for programs, and (4) zero based funding. Given that the California budget has more than doubled since the early 90s, under Democrat and Republican Governors alike, and grew over 40% over the last 5 years, it should be rather obvious to all involved that institutional reform is required – not just different personnel.
The budget crisis, however, can’t wait for the long term solution. It is so critical that it requires a short term answer as well. Even so, in addressing that situation, the mantra should be: First – Do No Harm. As I wrote about in my article: The California Tax Deal & Why It Won’t Work".
Most politicians believe that by simply passing a law that raises tax rates – that more tax revenue flows automatically. That simply is not the case. If it was, then Churchill would have been wrong when he said: “A nation trying to tax itself into prosperity is like a man standing in a bucket and trying to pull himself up by the handles.”
The California Republican Cult
Forget all the talk about whether one Republican will provide the crucial 27th vote in the state senate to pass the massive budget compromise of tax hikes, spending cuts and borrowing. Whether the compromise passes or not, the majority of Republican lawmakers have made their views clear this weekend.
They would rather California fall into the sea than vote for a tax increase.
No one can say they don’t have the courage of their convictions. Their position certainly must be sincere.
It’s also insane.
What’s Plan B?
If the current budget plan fails to pass, what’s Plan B?
First, a word about the taxes in the current proposal. I believe there will be a backlash against the amount of taxes if this measure passes. It happens every time. After Ronald Reagan signed the tax increase at the beginning of his governorship, he was booed for three minutes when he threw out the opening pitch at the Oakland A’s first game of the team’s first season in California. Reagan commented on the booing: “I can certainly hear that a helluva lot of you paid your taxes.”
The one thing that was done differently this time from the Reagan tax hikes is that these taxes are temporary. However, I believe the taxes will slow the economy and will not bring in the anticipated revenues that have been projected.
OK, So Nobody Read It First
If I see one more legislator or Cable TV Talking Head wave around the foot and a half thick, flopping pile of paper which is this Stimulus Bill, I will throw my own copy through the TV screen. The creative ones flop it on the desk in front of the them, the less creative just wave it around in front of their face and exclaim on its heft. Legendary Mel Belli supposedly made his reputation as a trial lawyer years ago in a case where a man lost both a race and his leg, with a San Francisco Cable car. For the whole trial, Belli kept on the counsel table before him, his client and, most importantly, the jury, a long, butcher-paper wrapped item which looked like it might have a few bloodstains and, oh yes, a severed leg inside.
He never actually opened the package, however, and the jury, of course, showered Belli and his client with money, and we are all left to wonder what he had in the package – his laundry, perhaps? We wonder too what is really inside the Stimulus Bill as, clearly, nary a legislator actually read it before voting “Aye” or “Nay,” in the dozen hours between when it was made available and when it was voted into law, subject to President Obama’s signature; remarkable, if you think about it.