A Dose of Reality for Schwarzenegger (MClintock opposes California bond measure)

LA TImes ^ | Nov. 20, 2003 | Gregg Jones and Evan Halper

[dennisw]

I agree w/ your comments 100%. McClintock has no effective game plan for dealing with the California deficit. He is unelectable to state wide office and an ego driven spoiler. John McCain must be his mentor.

[FirstPrinciple]

Someone just quoted a Socialist economist from one of the UC's in this thread. There should be a basic rule to join the Republican party: You must pass a basic economics course to be an eligible member.

[FirstPrinciple]

The Rip Van Winkle effect...lol!

[mike_9958]

Bonds are not tax increases..... as I understand it. They are loans - thereby banking on future prosperity. I don't think that is stupid thing to do - particularly when your forecasting a economic turnaround.

But as in all cases with loans - they are risk, if you have no way in paying them off. I think bonds and spending cuts are both necessary to dig Ca. out of the hole Gray put them in.

Arnold is a successful business man.... not a politician. I'm thinking he's knows how to do this. Its risky from this perspective.... but makes sense.

[Amerigomag]

We don't need to cut classroom/school spending

Yes we do by about 15%.

A sound solution is to localize the problem. Relegate the state's educational oversight function to perforamnce testing and give the education responsibility and the revenue stream back to the counties (pre 1980's system).

It won't take the counties long to figure out that they can't sustain the education budget until someone regulates immigration. When the rubber meets the road then the inevitable will happen.

[FirstPrinciple]

Don't forget cut in school lunches which will keep children malnourished.

[The Old Hoosier]

Democrats also pointed out that, if Schwarzenegger made good on his promise not to reduce education spending, closing the budget gap would require cutting every other state program by more than 25%.

Wow, Democrats get it, but some FReepers still don't.

[Cinnamon Girl]

McClintock needs to pipe down. He started his attack on Arnold only a day after the inauguration. Leave it to the LA Slimes, Tommy!

[The Old Hoosier]

While I voted for Arnold, I did so without enthusiasm. McClintock is right about bonds. Arnold does not have the courage to make the kind of cuts necessary to solve the structural probelm in the deficit. Why? Because he is NOT a conservative. Arnold is better than Cruz, but Arnold is still pretty bad. Just wait and see. It will be curious to see how far some might go to defend Arnold, no matter what he does.

I can appreciate the position of someone like fourscore, but what's up, Fair, are you on Arnold's payroll or something?

[CheneyChick]

Hey! Good to see you, too!

[Robert_Paulson2]

more like a floater that wont go down even after three flushes...

[Robert_Paulson2]

but still stinks!

[The Old Hoosier]

No one thinks Arnold created the debt in three days. Why are you so worried about the guy's public image already?

Now that he's safely in office, what's the problem with criticizing him for proposing something that is bad?

[FirstPrinciple]

Bonds are tax increases in the sense that you probably will need one to pay it off along with a hefty interest. Let's face the truth of the market for bonds. Very few people on this thread are talking reality.

CA already has one of the lowest bond rating. If they float more issues in the market, the only way they will be able to pay off is by offering a high interest rate. The most insane and saddest thing of this situation is that unlike using a bond issue to build something that may generate revenues, this will only go into the general budget to fund govt agencies. In other words, not a dime will go into economic expansion but to support the present bureaucracy. This is exactly why third world countries never get out of debt.

There will be only two ways to get out of it. The state can default, at which point forget about any future bond issues. Or, CA can start begging the federal govt for debt relief painting the spectre of hungry children running naked on the streets, no cops to protect the innocent, etc etc. At that point, it will be a tax increase for the whole country. The solution is that things are so bad, this is the perfect opportunity to take a sledge hammer and rip the state budget. It will be classic. Arnold - the real-life Terminator.

[marajade]

Who is going to listen to McClintock besides posters on this board anyway? No one.

[FirstPrinciple]

I meant the only the only way they will be able to attract investors is by offering a high interest.

[Amerigomag]

Don't forget cut in school lunches which will keep children malnourished.

Do you mean the free/reduced lunch program which is federal?

[CWOJackson]

Bingo...please pass the Charmin.

[William Tell]

From the governor's office: "The bond would only be sold if the voters approve the state spending limit described above to ensure politicians can never again put current year spending on the state's credit card," the governor's office says.

Publius6961 said: "The California Constitution prohibits deficit spending."

Publius6961 makes it sound like Kalifornia already has a constitutional spending limit. Perhaps it didn't work because liberals will attempt to spend the money anyway. Now Arnold appears to be doing the same thing.

Davis encouraged the legislature to pass some $12 billion in "deficit bonds" to allow state spending to exceed revenue. Now Arnold is proposing to do the same thing.

The courts are about to rule that Davis' "deficit bonds" are illegal because they have not been approved by a vote of the people. Arnold's "deficit bonds" may well be ruled illegal by the courts because they are not intended to finance capital improvements.

I pointed out on another thread that recent calculations of how much deficit funding is needed seem to assume that the part of Davis' deficit bonds which have already been sold can remain in circulation. This may be as much as 3 or 4 billion. When the courts rule that these bonds must be refunded, I expect that Kalifornia will experience an immediate cash crisis and will default on its payments.

[William Tell]

FairOpinion said: "I don't disagree with that. Under Davis CA budget went up 39% in 4 years. Obviously things need to be cut, but it can't be done overnight."

Really? What are we doing today, that we weren't doing four years ago, that cannot be stopped? Tell us what some of these items are and what makes them so special that we must wait until next year to cut them?

Or do you support a $15 billion "deficit bond" issue every year?