California: A Fiscal Lesson the Democrats Refuse to Learn

Image Courtesy of Mako Snark

(I know, quite a few Republicans have been almost as bad as the Democrats. But they’re not in power right now, and if we elect the right candidates there’s hope for the GOP.)

All one has to do is look to California for proof that liberal policies are a disaster.

San Jose Mercury News: With even well-managed counties, cities and schools finding themselves in the same budget hole that has swallowed state government, California now confronts a financial crisis that may be unrivaled — though it is also maddeningly difficult to quantify.

In fact, the problem is so expansive that several experts contacted by the Mercury News wouldn’t even hazard a guess. So just how broke is California?

A quick, unscientific look around the Golden State suggests that California’s collective deficit may be double the state government’s $20 billion budget gap. San Francisco must trim $522 million from its budget. San Jose’s upcoming balance sheet is $116.2 million in the red. The Los Angeles Unified School District is staring at a $640 million shortfall. Even tiny Dorris, a few miles from the Oregon border (and home to the tallest flagpole this side of the Mississippi!) is contemplating cuts.

Now consider that California has 58 counties, 480 or so cities and nearly 1,000 school districts — plus dozens more special districts, like transit agencies and water boards. Amid California’s harshest slump since the Great Depression, officials from one end of the state to another are preparing to close parks, fire teachers and police officers, and heave Hail Mary plans for tax hikes.

But the liberals still think they can solve the problem by raising taxes. Amazing. (Via Newsalert, via Instapundit) And this sort of thing certainly doesn’t help matters. Unfortunately, my state, New York, is following in California’s foot steps.

Nobody in the federal government seems to get it, either. They just keep expanding the government and spending more money, even though it’s obvious that the spending isn’t doing a darned bit of good for the economy.

Steve Forbes: Government is simply incapable of investing as astutely and flexibly as private investors. Take, for example, railways, which President Obama highlighted the other day when he took a trip to Tampa, Fla. The federal government has poured tens of billions of dollars into these kinds of projects around the country, and most all have been wasteful, financial disasters that have attracted only a fraction of their anticipated ridership.

One of the biggest economic myths since the Great Depression is that governments can ameliorate or counteract the ebbs and flows of free markets. Government spending has never worked as a trigger for sustained and vibrant economic growth. Ever. Scholarship has demonstrated that the New Deal perpetuated the Depression rather than cured it. On the eve of the Depression the U.S. had the lowest unemployment rate among developed nations. But a decade later, despite six years of FDR’s New Deal, our unemployment rate was one of the highest among developed economies. Japan’s serial stimulus programs over the past two decades have repeatedly underscored this truth.

The more the government takes as a proportion of the economy, the worse equity markets do and the higher the unemployment rate. The less the government takes from the real economy, the better equities perform and the lower the unemployment rate.

The best stimulus would be to implement personal and business tax rate cuts, a strong and stable dollar and a government nonaggression pact with the private sector–that is, no more attempts at nationalizing health care, gratuitously increasing energy taxes and forcing businesses to unionize. (Via Instapundit)

I’ll just never get how these people think. If liberal policies were so great, states like New York and California would be booming – models for the other forty-eight states. But they’re billions of dollars in the red. They’re liberal experiments that have failed miserably. Rather than running from those policies, the liberals in Washington are nationalizing them. Pure insanity!

At least the American people are starting to get it. I just don’t know if November can come soon enough to contain the damage of Obama, Pelosi and Reid.

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