Another Lesson From the Left-Coast

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Another Lesson From the Left-Coast
by Raymond Green, Guest Contributor

December 12, 2002

Raymond Green As I often do, I point to California to be an example for the rest of us in the country - an example, not a role model.

California "is at fiscal brink" according to the New York Times. Governor Davis has governed California into a deficit more than a third of all the other states combined. The budget shortfall could total $25 billion over the next 18 months. They New York Times reports Herb J. Wesson Jr. (Assembly Speaker, Democrat) as saying, "That's a hole so deep and so vast that even if we fired every single person on the state payroll - every park ranger, every college professor and every Highway Patrol officer - we would still be more than $6 billion short."

How does this happen? For one, Davis had to ignore a rising deficit along the way. This didn't occur overnight. You also have to factor in the general economy of the country. But the Times reports, "...the nonpartisan Legislative Analyst's Office projects that revenues are so far short of spending that the state will run deficits of $12 billion to $15 billion for the next five years even if the economy recovers." The deficits are an accumulation of two things: Lavish spending and Unfriendly business policy.

The two run hand in hand. To spend lavishly, revenue needs to be generated. California benefited profusely from the dot-com boom and general technology sector meaning business was good. Since business was doing so well, liberals sought to take advantage of business. Seeking more employee rights, larger government, and more entitlements, on came the unfriendly business policies. Obscene tax hikes and gracious workers benefits, over regulation designed specifically to generate revenue in fines and violations of that very regulation, and state costs to business owners increasing on average over 35% all played key factors in achieving "social justice" - or as the rest of the country calls it, socialism.

With business doing so well, the trade off for business was worth the sacrifice. But as time wore on, socialistic policy took its toll. More people began to depend on government rather than work meaning the government grew faster than business. The obvious problem being that the government relied on business to make the budget.

The trade off was no longer worth the sacrifice. Over regulation had its way with business resulting in declining revenues forcing many businesses out of the state - taking jobs and tax revenue with it. And the cycle begins. Less business means less jobs and even more reliance upon government. But with less business (i.e. less tax revenue), the government couldn't provide what it had promised. But rather than stop the cycle, taxes went up, regulation went up, and business went out.

Now Davis has proposed cutting the lavish spending - as conservatives in California have long been screaming for - and tax hikes. This tax hike may generate more short-term revenue, but does absolutely nothing to alleviate the problem. Higher taxes will put struggling businesses out of business leaving even more people jobless and dependent upon the government. Will taxes go up again? You bet.

An old saying goes: Insanity is the process of doing the same thing over and over and expecting different results. If it didn't work the first, second, or third time, why try it again? Solve that problem by cutting taxes and helping businesses put people back to work. More work -- means more money in workers pockets - means more workers spending - means more profit for business - means more tax revenue (Reaganomics 101).

Thankfully, the rest of the country can learn from California's example. Attacking business has a very negative effect on the economy. More regulation and higher taxes only mean less overall revenue because businesses will leave and take their benefits to a community that appreciates them (overseas if need be). It's no new fact, just one that is popularly ignored. California's current crisis illustrates liberalism at it's best - or should we say at it's worst. ***

Photo of Raymond Green courtesy of staff files

Be sure to visit Raymond's site at http://www.supportnospin.com