Sunday, January 11, 2009

California's Dim Future

Looks like Rose and I aren't alone in our pessimistic feeling about the state's future. Sacramento Bee columnist, Dan Walters, doesn't seem to see any light at the end of the tunnel, either.


At 8:03 AM, Blogger Rose said...

The sad thing is, if the legislature didn't spend like drunken sailors, didn't take every upturn as an opportunity to run up higher and higher bills and saddle future generations with more and more entitlements, and if they had instead, planned for future rainy days, we would not be in the condition we are now.

You can't tax people enough to fix this. They are going to have to cut spending, and now it will have to be drastic.

And it is going to have to be the Democrats, the majority, the ones who have blocked every effort at reform.

They won't, though. They'll raise taxes and fees and drive more businesses out of state, thus further cutting the state's revenues... everything happening here was preventable.

All is not lost, however, the Feds will have to amp up the printing presses to fix their own mess, and maybe some of that will 'trickle down' to California.

Sheer speculation.

At 9:11 AM, Blogger Greg said...

Rose, we have a slight disagreement about the degree to which increasing taxes and fees actually do "drive businesses out of the state", but I realize this has been a Republican talking point for several decades. Recent budget debacles make it obvious our elected officials care more about politics than government. Today it is the Republican minority in the leglislature holding up both their own Republican Governor as well as the Democratic majority in the state legislature.

I do agree that federal assistance will be required for state governments, but what else is new? I wish you could stop demonizing Democrats through your crystal ball.

"Everything happening here was preventable": Yep. IF. IF. IF. But we have to deal with today's reality. Personally, I think I will paint the living room.

At 10:10 AM, Blogger Fred Mangels said...

"I do agree that federal assistance will be required for state governments, but what else is new?".

Except for the feds don't have any money, either, and it looks like they'll be printing much, much more of it.

At 1:16 AM, Anonymous Anonymous said...

Yes. Printing more money.

When I asked my Dad, a well-educated world-traveller, what inflation was, he told me, his 10 year old son, it was "too many dollars chasing too few goods."

Then he told me a truly terrifying story, which I later verified as undeniably true. In Germany between the world wars, the German government printed money to such an extent that eventually, German shoppers had to bring massive amounts of nearly-worthless paper money to the grocery store just to buy a loaf of bread.

Later, when I studied modern German history at Humboldt State College, I learned that the inflation destroyed the German middle class, creating such anxiety and longing for anyone who could bring back a measure of economic and political stability that the balance of power shifted to Hitler and his National Socialist Party.

When certain political leaders (whom we are told we must not criticize) unveil plans to spend trillions of dollars that the United States simply does not have, isn't this the beginning of the same kind of ruinous inflation? Can't we be fairly certain that if we duplicate the economic policies of the Weimar Republic that some type of economic disaster will befall us, probably leading to even greater disasters?

Did President-Elect Obama mention the Weimar Republic's economic policies during his recent speech? Does President-Elect Obama know about this historical precedent? And if he doesn't know, would someone please tell him?

At 5:48 AM, Blogger Fred Mangels said...

That's my biggest fear as things fall apart in this country: inflation. Might we end up like Zimbabwe?

At 8:38 AM, Blogger Fred Mangels said...

I love Thomas Elias' column in the Times- Standard this morning. You'll probably need a hard copy of the paper to read it as I can't find it online.

He seems to blame California's woes on illegal immigration and the fact we don't have effective "campaign finance reform". He also claims California's golden days aren't over yet. Let's hope he's right about that, anyway.

What an airhead. I always thought he was one of the more statist and lame commentators.

At 9:24 AM, Blogger Rose said...

I thought Elias' column was interesting, too. Unfortunately, I don't think you can look to history for the answers here. Because in the past we had legislators who cared about that statesmanship and cared about doing right by the state and the people, and not about enriching themselves and keeping themselves in power, and party over what's right.

And, Greg, you can disagree all you want about taxes and fees driving business away, I know that's the Lakoff mindset, (taxes are 'investment' and you should be thrilled to pay more - hey, go ahead and do it, what did you do with your $600 stimulus check? Did you send it back a s a donation?) - but you can't tax enough to fix this mess.

And printing money and giving it to the drunken sailor legislators and regulators isn't going to fix it wither.

At 9:57 AM, Anonymous Anonymous said...

Inflation? Very doubtful, the demand for services and products is plummeting.

Also, you need higher wages to cause inflation, printing a bajillion dollars does nothing if they aren't distributed and spent.

I expect a very long deflation, until such time as wages rise at the lower end of the spectrum. You can't have price inflation without wage inflation OR a true scarcity.

Neither of those are on the horizon for a very long time.

At 10:00 AM, Blogger Fred Mangels said...

"Also, you need higher wages to cause inflation, printing a bajillion dollars does nothing if they aren't distributed and spent.".

Well, that's why they're printing the they can distribute it to people who will spend it. Don't think they'll spend it? I can think of a million things to spend a billion dollars on. I'm sure the people getting all this newly printed money can thing of a million things to do with it as well.

At 10:01 AM, Blogger Fred Mangels said...

...can thinK of a million things to do...

At 2:41 PM, Anonymous Anonymous said...

Anonymous said...
"Inflation? Very doubtful, the demand for services and products is plummeting.

"Also, you need higher wages to cause inflation, printing a bajillion dollars does nothing if they aren't distributed and spent."

Okaaay. Tell me which "higher wages" in Weimar Germany caused the inflation that destroyed the the German middle class. I have been laboring under the belief that unemployment was a serious problem in the middle of the world-wide Depression that gripped Germany and other countries during the Thirties. Higher wages weren't available. Any job that paid wages was a prize in those days.

You seem to be taking comfort in mistaken notions about inflation that did not apply in Weimar Germany and that may not apply to us now that we are preparing to replicate some of the same mistakes in America.

Inflation in ordinary times may conform to your ideas, but ruinous inflation that destroys whole sectors of the economy and the stability of entire nations may have different characteristics. Since we have the German example available to us, I think Americans who love their country and are not complacent about its future should study it to learn what we should not do. I hope our President-elect and Congress understand the dangers of "printing" bazillions of dollars in the pursuit of economic health.

We don't need the nation's leadership to take on the role of a "Dr. Feelgood" who narcotizes the patient into a state of euphoria that ends with the death of the patient.

At 8:01 PM, Blogger Ernie Branscomb said...

“The History of the Decline and Fall of the Roman Empire”, by Edward Gibbons, stated that the Roman society had become so decadent that they borrowed their prosperity from their own government, thus assuring it’s bankruptcy. Sound familiar?

At 8:08 PM, Blogger Joel Mielke said...

"What an airhead."

But Fred, you're referring to the great, exalted author of "The Burzynski Breakthrough."

At 9:27 PM, Anonymous Anonymous said...

Thanks Ernie, If we learned nothing from history, we're
probably doomed to repeat it!?
Our usual answer to most problems
is to throw more money at it!!
I like the saying: A boat is a hole
in the ocean that you throw your
money does our government with our problems!
Has anyone got any vision for
saving our future???


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