EDITORIAL: THE $24 BILLION QUESTION: HOW WILL BUDGET CUTS HELP PROMOTE ECONOMIC GROWTH?
By Robert Cruikshank, Courage Campaign (originally printed at http://www.couragecampaign.org/page/community/post/roberticruickshank/C2t5 with links to sourcing) June 9, 2009 (Sacramento)–It’s a question that I rarely ever see asked, and one that is *never* answered, certainly not in a state where the conventional wisdom is that revenue increases are impossible, even though we’ve never tried to make them happen. Instead the supposed "political reality" of no new taxes is trumping the economic reality that taxes are preferable to spending cuts in a recession. The result is that spending cuts are treated as inevitable even though they are a sure path to Depression. Yesterday’s LA Times had a remarkable editorial calling for no delay or hesitation in making the cuts. But the only time they made mention of the economic impact of the cuts was when they argued against permanent revenue solutions: Be smart about new taxes. Reject, for the current year, broad-based sales and income tax increases as damaging to the recession economy and as politically infeasible, but move forward on carefully targeted temporary taxes, specifically on tobacco, alcohol and snack foods, to prevent cuts in particular health and human services (but not necessarily agencies). And yet this ignores the evidence gathered by Peter Orszag and Joseph Stiglitz which showed that income tax increases were actually *better* for the economy than spending cuts. Had the opinion page editors read George Skelton’s column that ran in the same edition, they might have understood how that abstract point works out in practice: Faced with what he calculates to be a potential $24-billion budget deficit in the fiscal year starting July 1, Gov. Arnold Schwarzenegger has proposed cutting state supplemental payments for the elderly and disabled down to the minimum allowed by federal law. It would be their third cut this year. The Legislature already has approved a $20 monthly cut beginning July 1, lowering the grant for single people to $850. That’s it: No food stamps, and that includes any Social Security. This was the cut Jean had read about. But the governor also is seeking another $20 trim starting in September, reducing the benefit to $830. The rent for her one-bedroom condo is $850. What Jean’s story shows is the ripple effect of safety net spending. I’ve heard it said that Cal-WORKS, for example, is de facto one of the most important rent subsidy programs in the state. When the state cuts aid to the needy, whether it’s a poor family or an AIDS patient or a college student, they have to make up the difference out of their own pocket. That means they have to cut back on other spending, which means more foreclosures, more rental vacancies, less consumer spending, less tax revenue, fewer jobs, and more business failures. Nobody in Sacramento has explained to the people how these cuts will help produce economic recovery. They ought to, and we should demand that we get such an explanation before any legislator votes for a single cut. I want an answer to the $24 billion question. Who in Sacramento will give it? The opinions in this editorial reflect the views of its author and do not necessarily reflect the views of East County Magazine.
EDITORIAL: FIDDLING WHILE ROME BURNS
By Assemblyman Joel Anderson In the year AD 64, Roman emperor Nero fiddled at the top of a tower as a devastating fire swept through the city of Rome. According to many accounts, Nero himself started the fire and then blamed it on Christians. Today, an economic fire is ravaging California. Unemployment has climbed to 11.5%, income tax revenue is down 33.8% from last year and the budget deficit is now $24 billion. Tax increases only fuel the flames of recession that are destroying our economy. The budget passed in February raised the sales tax to help “close the budget gap.” Since then, sales tax revenues have fallen $436 million below projections, further widening the budget gap. While California’s economy burns, Democrat politicians continue to sit atop their Sacramento tower doing nothing. They’re playing the same old tune about raising taxes and spending wildly. Like Nero, the Democrats in Sacramento will blame our economic struggles on outsiders. California’s problems aren’t the result of years of overspending, or the highest state taxes in the nation, or excessive government regulations that cripple business. No, our budget deficit and record unemployment are simply the result of an “international economic crisis.” To be clear, there is a severe global recession. But it does not account for the severity of economic destruction that California is experiencing. Texas, another large state, also had to make budget cuts. They cut $1.6 billion in order to balance their budget — pocket change compared to California’s $24 deficit after already cutting billions. Texas also passed a tax cut for small businesses because they realize that jobs and the economy are essential to the solution. Democrats in Sacramento are demanding tax increases, which will continue to kill job growth and hurt working families. Our unemployment rate is now 11.5%. Unemployment in Texas is 7.1%. In fact, the rest of the country experienced a decrease in new unemployment claims last month. Not so for California. Our jobs continue to disappear into the smoke. Sub-prime mortgages can no longer be blamed for this economic fire. So who is to blame? The emperor. Democrats and their special-interest masters have set ablaze our state’s economy. This is not to say that anyone wanted to send our state’s economy into freefall, but the out-of-control spending, over-taxation and extreme regulation that they enacted are now taking their toll. This year, members of the majority party proposed over $210 billion in new spending, which would nearly triple total state spending. They have no problem holding press conferences about the budget crisis one day, and then proposing billions more the next day. Fiddle on, Democrats, fiddle on. There is a way to stop the destruction. The next budget passed must cut large portions of state government and the majority party must stop spending. The first rule of getting out of holes: stop digging. The Democrats in Sacramento have had their way for long enough and we can now clearly see the effects. They have run out of other people’s money. If Democratic leaders in the legislature need help, they should listen to one of their own— State Treasurer Bill Lockyer. “My suggestion to you is don’t delay the pain,” Lockyer recently told Democrats. “It’s going to be worse if it doesn’t get done.” In the Assembly, it takes 41 votes to make cuts or spend money. Today there are only 29 Republicans and 50 Democrats. Nothing is stopping the Democrats from balancing the state’s books without raising taxes. It’s time for Democrats to trade in the torch and fiddle for a water bucket, which thus far they have been unwilling to do. Republicans deserve the chance to lead. The opinions in this editorial reflect those of its author and do not necessarily reflect views of East County Magazine or its authors.
WHAT’S HOT THIS WEEKEND? PLENTY!
June 26, 2009 (San Diego’s East County)—If you’re looking for a hot time in East County this weekend, you’ll have plenty of events to choose from. Tonight, Santee Lakes has the first of its summer movie showings, starting with Madascar 2 – Escape to Africa. Or groove to the sounds of Theo and the Zydeco Patrol at El Cajon’s free Concerts on the Green. But that’s just the start… On Saturday, savor a Chili Cook-off in La Mesa—but leave room for dessert! Navajo Events is hosting a bake-sale in Del Cerro to help raise $4,000 more needed to fund the Lake Murray Music Fest and Fourth of July fireworks. Also on Saturday, El Cajon hosts a free electronics recycling event plus “Lend a Hand” day for volunteers to help clean up the community. Sunday evening, Poway hosts the Target Summer Concert Series at Lake Poway, featuring the Tanya Tucker band, winner of a KSON music award and Oceanside music idol award. Bring a picnic dinner and blanket for some old-fashioned summer fun! Next week, on Tuesday the League of Women Voters hosts "How Green is My San Diego?" featuring many top speakers on this important issue. Viejas Outlet Center hosts a free concert in the park and farmer’s market in Alpine. Then get revved up for more entertainment at the Cajon Classic Cruises Wednesday — and be sure to check next week for an update on fireworks displays in East County! Find details on these and other events at our calendar.