California’s Fiscal Toilets Overflow -AGAIN

California’s Fiscal Toilets Overflow -AGAIN

One party government inevitably leads to a disastrous fork in the road like this one.

Without checks and balances, politics always deteriorates into interest group incest, clueless elites screwing up without meaningful electoral consequences and – especially when liberals lack adult supervision – an ugly fiscal mess.

California’s mess is one of those plumber’s nightmares that makes an Animal House post-party cleanup look like morning after at Starbucks by contrast. Unlike the US government that gets to finance fiscal irresponsibility by borrowing from China and pumping up the money supply via monetary legerdemain, states actually have to go to real lenders to fund deficits. California’s deficit is 42 billion and growing. Yesterday, voters refused to bail out the politicians.

As one analyst put it,

“California’s budget problems are structural,” said Adrian Moore, vice president of research at Reason Foundation. “For years, the state has been spending more than it takes in. When the real estate market is thriving or dot-com companies are booming politicians spend that money like addicts. Then when leaner times inevitably arrive, politicians claim there’s nothing they can do and they have to raise taxes. Gov. Schwarzenegger has talked about cutting up the credit cards. It is time to actually do that.”

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The Golden State’s legislature has been ruled by Club Democrat from 1970 (noting the minor exception that proves the rule in which the republicans briefly controlled the state senate for one year, 1995-6). This record of one-party dominance of 39 years is worthy of the antebellum South. Given the demographic spread and the migration-driven population turnover, most living Californians cannot remember a time when Club Democrat didn’t run the legislative, i.e., the spending branch of government.

The one occasional political check on the California legislature has been a republican governor assisted by a strong republican minority: The recent republican governors were Reagan 69-75, Deukmejian 83-91, Wilson 91-99, and Schwarzenegger 2003. But at present, republicans are a tiny group and the “governator” was politically wounded when he took on the unions in an ill advised special election in 2005 and all four of his proposed ballot initiatives were defeated.

The California Assembly has 80 total members, the Senate 40. With just 29 members in the Assembly and 15 in the Senate, the California GOP is borderline irrelevant.

There are two remaining checks on a runaway one party government in California: the ballot initiative process, which is a blunt instrument at best, and realistic lenders. California Treasurer, Bill Lockyer (a rational democrat whom I’ve known for years) must now troll credit markets for willing lenders who are willing to gamble on California’s future. Would you?


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