Obama Takes America Down California Road

California's budget crisis has been in the news this week. It would be interesting to see Governor Schwartenegger on his knees begging for cash to bail his state out, but if it happens at all it will be behind closed doors. He's lucky he has a place to go for help. Barack Obama may well be doing the same kind of begging in the near future, but begging from whom? Who will he go to when the American people do what the residents of California did this week when they rejected five of the six ballot propositions that the governor supported? One would have exended a huge tax increase that was set to end. Another borrowed more money for education when the state already spends way more than any other state per student. The others had to do with borrowing money from childrens programs and programs for mental health, and borrowing from state lottery increases that have not happened yet. Obama seems determined to take us down the same kind of road. Borrow money that doesn't exist.

California is trying to blame everybody and everything for it's current budget deficit. The recession, the stock market, tax reciepts, you name it. But in reality, the state is addicted to spending. I know it seems cliche, but when a family spends more than it takes in, it has to find somewhere to cut spending or they find themselves in debt to the credit card company beyond what they are able to pay. It's very common, and most families find a way to cut back and get themselves under control. Not California.

It has always been a rule of thumb in state budgeting that increases should not exceed the rate of growth plus inflation. Republican governor Pete Wilson came closest to this, when the growth rate plus inflation was 3.72%, Wilson allowed the budget to grow 4.88%. But since Wilson, the trend has been to grow the budget considerably faster. In the past 18 years, the budget has grown 5.91% while population plus inflation has only grown 4.38%.

During the '90's, California was riding the "dot com" wave and brought in revenues that produced surpluses as far as he eye could see. But instead of saving for a rainy day, or paying down debt, they spent every cent of it. And then some. That seems to be the Obama Way. But he's spending money we don't have. And alot of it.

California already has high taxes. The sales tax there is an enormous 9.75% and they rank in the top 15 states in total taxes. That's only because voters put a lid on how much property tax the state could charge (remember Prop 15 in 1978?). Otherwise, I believe they would easily be number one. Lots of Democrats in the state Legislature want you to believe that's the reason for the deficit. They can't raise enough money to fund the states basic programs due to their inability to raise taxes. But the problem is not going away even if they do raise taxes. And it's not going away if the federal government bails them out, which is probably going to happen. the problem doesn't go away until the state realizes that it can't spend every dime they take in and then borrow to spend some more.

Some examples of the problem in California are, first, their state employee pension fund. Did you know that the state continues to pay employees 70% of their final pay after they retire? Nice perk! But totally unaffordable, as they are now finding out. Public employee unions across the country held this up as the model for all states, but they were wisely ignored. Another example is one that is glowingly obvious to most, but not all, Californians. It is the fact that they spend around $5 billion a year on illegal aliens, the education of their children and healthcare taking the bulk of that. Interestingly, in this time of budget crisis, the democrats in the legislature just recently decided to oppose a law that would require welfare recipients who fail to complete drug treatment program to be drug tested randomly. You'd think it would be sensible to pare down the rolls when your law states that you have to be clean to receive benefits.

So, President Obama, will you learn from the California experience? As we know, taxing citizens at higher and higher rates doesn't work unless there are spending cuts to go along with them. And BIG cuts are what we are talking about here. Yes, there will be some pain involved, and there isn't much you can do about that. But you and your liberals in congress have decided that we can spend our way out of this mess. You've watched that approach fail time and time again, but you seem determined to make it work now. No detail, of course. Just somehow.

Congress has decided to follow the Obama Way. More spending. More taxing. More takeovers of private enterprise. During the campaign, Obama railed against this very type of governing. He called for fiscal policies that made sense, and would balance the budget. Now, as president, he has decided that it was all wrong to talk like that. Silly him. The truth is, that Obama doesn't want to tell the American people the truth. He doesn't want us to know that he is spending us into a hole that we will never be able to climb out of. He continues to deficit spend throughout the eight years he assumes we will give him by borrowing huge sums from the Chinese and Saudi Arabia. This is destructive to our country. He has set the clock ticking on a time bomb.

California, here we come.