| | May 22, 2009
WSJ.com
You live, you learn. Right?
Well, not in America. Here we live, screw up and then go back to doing the same stupid things we did before.
Apparently, it's just too hard for us to make the tough necessary choices.
Look at the sorry state of our sorriest state, California. It may be the sixth or eighth largest economy in the world but it's not just broke, it's broken.
And who broke it? The voters will blame the Governor. And the Democrats will blame the Republicans and vice versa. But the real culprits, of course, are the people of California themselves. By defeating the five propositions designed to close its $21.3 billion budget deficit, the citizens of California have richly earned their state's abysmal credit rating, the worst of any state in the union.
There's no doubt that California's awkward political system hasn't helped matters. Special ballot votes are a tough way to govern any state. Especially one that requires a two-thirds vote in the state legislature to pass a budget.
So when Governor Schwarzenegger said yesterday that '...I respect the will of the people who are frustrated with the dysfunction in our budget system' he was right in noting that the system is messed up.
But he was wrong to just the fault the system. It's really the fault of the 'people' of California who live beyond their means - and the laws of economics.
You cannot pay police officers $190,000 a year in salary and benefits or pay your school employees 35% more than the national average and keep your state solvent.
You cannot provide three million illegal immigrants with social services - spending 70% more per capita on social services than the national average - and keep your state solvent.
And you cannot tax your state into solvency with the highest personal income tax rates in the country.
That's why the state's deficit ballooned by 42% from $15 billion to $21 billion in just a few months - and why it will continue higher.
And here's the kicker. The Californians may not have learned the lessons of the past few years, but neither has the rest of America. New York State is busy playing catch-up. Giving unions 3% raises and adding a new millionaire's tax. Still, New York's budget will be about $6 billion underwater.
As for the Federal government, well, it doesn't even have to pretend to balance a budget. So why should it stop itself from repeating past mistakes?
The Department of Housing and Urban Development last week set up a program to give first-time home buyers a tax credit of up to $8,000 for a downpayment. Using that cash, a would-be homeowner would need only a few thousand dollars to buy a $150,000 house.
It's all there - the American dream of owning a home, very little up-front-money, an eager lender. Just like five years ago.
You live, you learn?
Apparently, not in California, nor the rest of this nation.
Evan Newmark |
| | Posted 5/24/2009 3:30 AM - 24 Views
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