Two gems from the Wall Street Journal today.
The first piece entitled, How California Became France — Unable to afford a welfare state and unable to reform it by Matthew Kaminski, who writes:
As California goes, says an old cliché, so goes the nation. Oh my.
These days, the Golden State leads the nation on economic and fiscal dysfunction, from the empty homes spread across the Central Valley to the highest state budget shortfall in the nation’s history. Meanwhile, its political class pioneers denial in the face of catastrophe.
The spark for the immediate political crisis was a familiar Californian discovery, a fiscal hole of $41 billion. Gov. Arnold Schwarzenegger declared an “emergency” in November and took legislative leaders behind closed doors to hammer out a compromise. The budget adopted in a marathon session this week splits the baby, closing the deficit with spending cuts (hated by the left) and tax hikes (ditto the right), all the while largely failing to tackle the state’s built-in structural defects.
Some parts of the deal, such as borrowing from future lottery receipts, may yet collapse at the ballot in May, and California could soon be back in line to mark another first — state bankruptcy. In anticipation, Standard & Poor’s this month downgraded its bond rating a notch below Louisiana’s.
Even discounting for the impact of global recession, the most populous state’s ills are unique and self-inflicted — and avoidable. In the last three decades, California expanded the public sector and regulation to Europe-like dimensions. Schools, state employees, health care, even dog kennels, benefited from largesse in flush times. Government workers got 16 official holidays, everyone else six. The state dabbled with universal health care and adopted strict environmental standards. In short, California went where our new president and Nancy Pelosi of San Francisco want America to go.
Read more.
Second piece, by Pete Du Pont, appropriately entitled: Next Stop, France — By comparison with what’s to come, $790 billion is small change.
Last month Barack Obama became the new president of the United States, a president with a different set of beliefs and perspective about how our country should function, change and–hopefully–prosper. The last president with such vision (although from a different perspective) was Ronald Reagan, who according to most scholarly surveys was one of the best presidents in America’s history. So a look at what the Obama presidency is planning will help us understand where America is going.
According to last week’s Newsweek cover story, “We Are All Socialists Now,” the “America of 2009 is moving towards a modern European state”–whether we like it or not. A decade ago our national, state and local government spending was 34.3% of gross domestic product, while next year it will reach 39.9%, and America “will become even more French.” So there will be “more government taxing and spending,” and “more government intrusion in the economy will almost surely limit growth (as it has in Europe, where a big welfare state has caused chronic high unemployment).”
That conclusion should not surprise us, for more government involvement and decision-making in all aspects of our country’s policies, organizations, businesses and local governments is the belief of the Obama presidency. Mr. Obama was the most liberal member of the Senate during his short time there, and, faithful to his beliefs, he has begun establishing the liberal policies he campaigned upon.
Mr. Obama promised to increase federal spending by $303 billion a year, or 10%, but the recessionary emergency spending bill he signed last week will cost a minimum of $790 billion over the next several years. It is the largest annual spending increase since World War II, an enormous deficit-spending bill that, as The Wall Street Journal pointed out, expands “the role of the federal government across the breadth of American business, health care, energy and welfare policy.”
If the spending increases and tax reductions of the bill are extended over 10 years, the Congressional Budget Office estimates they will add $1.7 trillion to the federal deficit. And since there are no sunset provisions to end the spending increases, we can be sure that any “cuts” in federal spending will be vigorously opposed. Simply put, a much bigger American government is on its way, and as a result a balanced budget will not be possible for the foreseeable future.
Read more.
As noted before, “we all know how easy it is to roll-back the waste of government bureaucracy once new budgets are set, this is a glimpse of the future. The debt that will be carried on by our children.”
The writing is on the wall. Mr. and Mrs. Taxpayer, Citizens of America, it’s time for revolt. Let your voices be heard.
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