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January 06, 2006

State of the State (CA)

Michael O'Hare's got the best analysis of Schwarzenegger's State of the State speech. My reaction is simpler: infrastructure good, massive debt bad. Schwarzenegger's allergy to tax increases, even moderate ones, will badly harm the state. Weirder yet, he's not even pretending to justify his opposition on economic grounds, not with his proposed $1 hike in the minimum wage. Now, I like hikes in the minimum wage and welcome the boost, but there's no tangible difference for business between a sales tax and a minimum wage increase, save that the sales tax is more diffuse in its impact. So what's the dividing line for a governor who, just a couple years ago, vetoed a minimum wage increase? So far as I can tell, it's 40 percent in the polls.

Chastened by his defeat in last year's special election, Schwarzenegger's adopted a new script: borrow and spend liberal. And if he's dreaming bigger than almost any progressive in public life, it's because he's courageously declared himself exempt from the laws of economics. Spending is popular, but taxes are not. Schwarzenegger, ever the opportunist but never the governor, has simply sidestepped the contradiction. Unfortunately for me, my sister, my brother and my friends, a tax deferred is not a tax denied, and when the federal and state houses are eventually forced back to fiscal order and all those delayed bills begin coming due, the reckoning is going to be immense.

January 6, 2006 | Permalink

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Comments

Yes, the really hard parts of being Gubernator cannot simply be brushed aside and left for future generations. Unlike the Federal goverment, the state of CA cannot run multi-billion dollar deficits every quarter.

He's going to have to choose: Spend or Don't Spend. You can't Spend and Cut.

Posted by: Andrew | Jan 6, 2006 9:39:46 AM

You can spend and cut if you take out ridiculous government expenditures like subsidies for cotton growers(actually doubly subsidized--they get cheap water from the aqueduct--imagine that, subsidizing water intensive cotton growing in the Central Valley desert!)....but I doubt that kind of housecleaning will occur under Ahnold's schizophrenic watch.

Posted by: Steve Mudge | Jan 6, 2006 9:57:10 AM

My reaction is simpler: infrastructure good, massive debt bad. Schwarzenegger's allergy to tax increases, even moderate ones, will badly harm the state.

Yes, exactly. What makes it so dishonest, though, is that spending money does mean somebody's taxes will be higher--if not now, eventually--and the longer it's put off the higher the taxes will have to be (interest and all).

The only intelligent thing Milton Friedman ever said was that there's no free lunch. Too bad the party that pays lip service to Friedman never got that part of the lesson.

Posted by: Tom Hilton | Jan 6, 2006 1:50:13 PM

People are already moving away from California in droves to get away from the oppressive taxes, and you want them to be increased?!?

Posted by: anon | Jan 6, 2006 5:01:12 PM

People are already moving away from California in droves to get away from the oppressive taxes, and you want them to be increased?!?

Snarky response #1: that would explain why our population has dropped to a mere 37 million.

Snarky response #2: anyone who moves out of California because of the taxes deserves the punishment of living someplace other than California.

Serious response: I'm sorry, that just doesn't merit a serious response.

Posted by: Tom Hilton | Jan 6, 2006 5:29:18 PM

So is that why we gained 2 million people from 2000-2003 and 13.7% from 1990?

And you know what? I've been on an LA freeway -- I'd love for some of those folks to move away.

Posted by: Ezra | Jan 6, 2006 5:38:04 PM

So is that why we gained 2 million people from 2000-2003 and 13.7% from 1990?

Cite please. I'm trying to determine if that includes illegal immigration.

Posted by: Fred Jones | Jan 6, 2006 7:34:23 PM

Cite please. I'm trying to determine if that includes illegal immigration.

Boy, it would be great if it did, since those folks pay taxes on everything they buy, and they don't really get access to all of the services that the rest of us do. And to the extent they use fake SSNs, their payroll deductions go into the various treasuries and they don't get anything back. Those damn illegals are helping to finance Fred's retirement. Of course, they're also keeping the cost of his vegetables low, so he can stay healthy longer and enjoy more of the Social Security wealth transfer from the undocumented aliens to him.

One might also note that gay folks also tend to pay more into the various taxing authorities than they get back, since they have fewer children per capita, so they're not getting one of the main taxpayer benefits -- public schools.

But the illegals and the gay folks, they're the ones tearing the country down. If only we could get rid of them, Fred could rest easy.

Posted by: paperwight | Jan 6, 2006 8:15:43 PM

Boy, it would be great if it did...

Boy, it would be great if you actually answered the stupid, fucking question.

Posted by: Fred Jones | Jan 7, 2006 9:28:11 AM

Sheesh. How hard is it to look up the data at the census 's web page? They report the following figures:

2005: 36,132,147
2000: 33,871,648
1990: 29,760,021

That's a 13.8% increase from 1990-2000, a 6.7% increase from 2000-2005, and a 21.4% increase from 1990-2005.

Posted by: aphrael | Jan 7, 2006 12:58:45 PM

Anon - people may be "moving away from California in droves", and certainly you can find lots of expat Californians in neighboring states. But it isn't usually the high taxes that drive them out; it's the high cost of real estate and the corresponding need to commute 100 miles each direction to be able to afford a large house for a family.

A good part of the Governor's proposal is to add additional freeway miles to make that commute somewhat less painful.

Posted by: aphrael | Jan 7, 2006 1:01:28 PM

Also, not to be nasty here, but it's not terribly reasonable to expect paperweight to answer a question about where ezra got his data. Unless there's mind reading involved. And if there's mind reading involved, I want to be involved in the beta of whatever device is being tested.

Posted by: aphrael | Jan 7, 2006 1:04:12 PM

Yeah kids, census data. Population numbers for the largest state in the union aren't, you know, hidden or anything. And Census data wildly undercounts the number of Californians due to illegal immigration -- that's why states with high immigration want to move towards computerized data services rather than the mail-and-hand-count method, as it offers a more accurate count that doesn't let so many illegals hide.

Posted by: Ezra | Jan 8, 2006 11:07:50 PM

Hmm. You ever get the feeling that government officials will never own up to their budget problems without a good deal of popular coercion?

Posted by: Mastiff | Jan 9, 2006 2:02:23 AM

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Posted by: judy | Sep 29, 2007 11:39:03 AM

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