Political Animal

MORE CALIFORNIA BUDGET NONSENSE….The rest

MORE CALIFORNIA BUDGET NONSENSE….The rest of you may safely leave the room.

Ann Salisbury reports that assemblyman John Campbell wants a constitutional amendment that would limit spending increases to the rate of inflation plus population growth. Ann says, “I think I like it.” So let’s take a look at how this would have played out over the past two decades:

  • 1980: Budget = $52 billion (in 2002 dollars), population = 23 million. Per capita spending is thus $2,260 per person.

  • 2002: Population is now 35 million, so keeping the same per capita spending, the state budget would be $79 billion.

The actual budget last year was $98 billion, and we are supposedly $24 billion in the red for next year, which means that without tax increases the budget needs to be cut to $74 billion. So even if we had followed Campbell’s proposal, we’d still be in the hole. But at least we’d only be $5 billion in the hole!

(Actually, this gives you an idea of how much trouble California is in. Even if per capita spending had been absolutely flat for the past 20 years, we’d still be deeply in the red.)

On another subject, Ann quotes an LA Times article with this jaw dropping statement:

To begin with, the state does not have to balance its budget. The Constitution merely requires that the governor propose a balanced budget. At the end of its fiscal year the state budget can show a deficit. This also means that any governor can fulfill his constitutional obligation by proposing changes that he knows will never be enacted. So as you read about Gov. Gray Davis’ budget, remember that what counts is not what he asks for but what he can get through the Legislature.

Can this really be true? Hell, my cats could propose a balanced budget. If the legislature doesn’t have to actually pass one, then what’s all the fuss about every year?

Something here has got to be wrong.

DUELING ECONOMIC PLANS….I’ve been pondering

DUELING ECONOMIC PLANS….I’ve been pondering the two economic proposals on offer lately, and speaking from a nonpartisan point of view I have a question: Do we really even need a big economic plan right now?

On the Republican side, we get a big tax cut, but let’s face it: overall tax levels aren’t really very high right now, either historically or in comparison to other developed countries. Unless you simply believe that taxes should always be cut no matter what, it’s hard to see the point. What’s more, the effect of a dividend tax cut is supposed to be a boost to the stock market, but to my eye the stock market looks like it might still be overvalued, and artificially keeping it high doesn’t seem to make much sense. Better to just let it drop to its natural level.

On the Democratic side, we’ve got a bunch of proposals that are supposed to provide a short term stimulus to the economy. It’s true that job growth was poor last year, but even so unemployment is only at about 6% and the economy grew by around 3% in 2002. I don’t have a problem with, say, extending unemployment benefits, but otherwise this is hardly the kind of deep recession that cries out for a Keynesian stimulus.

I can’t help but wonder if the best option is really (c) none of the above.

ISOLATED….Asia Times explains just how

ISOLATED….Asia Times explains just how poor our intelligence on North Korea is:

A couple of years ago Western intelligence discovered in Rome that North Korean intelligence agents were busily buying kitchen utensils and microwave ovens. The Western agents became suspicious and investigated the matter. They found out that some parts of microwaves oven could be used to build triggers for atomic bombs. They thus thought that the North Koreans were about to build an atomic bomb and were purchasing the components of its trigger in the form of innocuous kitchenware. They were about to act and stop the traffic, when they came across another piece of information: The utensils were connected with some Italian chefs hired to go and cook for a period of time in Pyongyang at Kim Jong-il’s court. So the Western agents dropped the matter – apparently Kim was simply fond of Italian food. Perhaps he is fonder of pizza than of atomic bombs.