Idea doesn't ring no bell (Solution to California's fiscal problems lies in simple bookkeeping)

Worldnetdaily ^ | 6/15/2009 | Michael Ackley

[SeekAndFind]

The seeds of California's current crisis were planted more than 30 years ago, when voters overwhelmingly passed Proposition 13. ... Property tax rates were capped, and homeowners were shielded from increases in their tax assessments even as the value of their homes rose.

– Paul Krugman, New York Times columnist

Well, the attribution should say, "Paul Krugman, New York Times columnist and recipient of the Nobel Prize for economics."

The latter distinction should qualify him to hold forth on California politics and economics, even from his chambers in Princeton University's distant, ivy-covered halls.

This is true, even though he is talking through his MIT doctoral tam, or more likely, out of the nether regions of his academic regalia. For Plato said, in essence, that any idiot can talk about politics, which is the province of every man.

And, as politics and economics are inseparable, Dr. Krugman may be said to have double the right of the average idiot.

Consider Dr. Krugman's assertion last month about "the seeds of California's current crisis." To the quote above he added, "The result was a tax system that is both inequitable and unstable. … Even more important, however, Proposition 13 made it extremely hard to raise taxes, even in emergencies: No state tax rate may be increased without a two-thirds majority in both houses of the State Legislature. And this provision has interacted disastrously with state political trends." (He finds this undemocratic, even though the two-thirds rule was democratically imposed.)

"As the political tide has turned against California Republicans, the party's remaining members have become ever more extreme, ever less interested in the actual business of governing.

[SeekAndFind]

Let's take a non-Nobel look at California's general fund budget. Five years ago, it was about $79 billion. The proposed 2009-10 budget now stands at about $95 billion, or an increase of 20 percent. But note: Last year, the general fund budget was over $103 billion, a four-year jump of more than 30 percent – far, far above inflation. It jumped 15 percent in one year, from 2004-05 to 2005-06, and 11 percent the next year. State government has been overusing its credit card, and the bill has come due. However, dropping to a budget total only slightly below that of three years ago is an agonizing exercise for a Legislature habituated to massive, year-to-year increases.

The solution doesn't lie in economic science . It isn't in politics. It doesn't take a Nobel Prize winner to recognize that it's simple bookkeeping.

[BenLurkin]

“The seeds of California’s current crisis were planted more than 30 years ago, when voters overwhelmingly passed Proposition 13. “

I stopped reading right there.

[jiggyboy]

The statement is correct. That’s when the crisis started — but because CA didn’t get the hint hat it had to stop ovespending.

[DB]

Boy Paul Krugman is a genius...

All those capped taxes led the state to ruin...

Hmmm....

Why is it California has virtually the highest taxes in the country... Real successful capping of taxes...

The simple truth is the idiots in Sacramento went on a ten year spending spree and refuse to give it up.

[troy McClure]

Time to get an Initiative passed to require a 2/3 majority vote passed by the voters, to increase all taxes,Fees and all rest rest of the gibberish that they use to get money.

Or Just deport all the Illegals that would solve the problem in a heart beat.

[SeekAndFind]

Boy Paul Krugman is a genius...

Well, he won the Nobel Prize for economics recently didn't he ? And he's an Ivy League professor isn't he ? I guess that makes him a genius.

[Thommas]

Kick the old ladies out of those 1200 sq.ft. mansions and give them to the Chapter 8 illegals who REALLY need that housing. Gramma can sit on the curb and give testimony as to how the State needs more taxes to provide homes for the likes of her, Yeah, bring back the insidious rising taxes on property while STILL imposing a 10% sales tax and onerous income tax.

While you're pontificating, Paul Krugman, tell us just where the $97 billion in taxes and the $8 billion in debt goes every year. Its this economist's East Coast politics and welfare socialism that has put this and other states in fiscal and social crisis.

[3niner]

Yep, it’s all the fault of Proposition 13, because we all know it’s simply impossible for politicians to restrict spending.

[Guyin4Os]

Prop 13 produced an $8 billion surplus, which Gray Davis squandered in a single summer, giving it to Enron.

To paraphrase Reagan, we don’t have a deficit in California because Californians aren’t taxed enough; we have a deficit in California because our representatives in Sacramento spend too much.

[ArmstedFragg]

You know, every time people claim Prop 13 froze tax revenues, they completely ignore that it provides for annual increases and it provides for property to be re-appraised (and a new tax amount set) each time it sells.

Some freeze.

[ridesthemiles]

Without Prop 13, there would be no places for the elderly to live.
They stay in their homes and move less often, thereby freezing their taxes at the 1977 level plus 2% each year.

IF you want to move often—do it. Then you get to pay the tax on the new purchases price of the house.
IF your grandparents are living on meager social security and whatever the kids will contribute to their survival, then Prop 13 does exactly what H9oward Jarvis intended it to do. Up to that time, people were literally getting assessed out of their homes.