Free Republic

SACRAMENTO — Gov. Arnold Schwarzenegger unveiled a proposed $125.6 billion 2006-07 budget Tuesday that hikes spending 7 percent overall for education, transportation and other programs but trims services for the poor. Schwarzenegger's budget depends on a growing economy and $7 billion in carryover from the current fiscal year to cover increased spending. It will maintain or increase the long-term, multibillion-dollar structural deficit, though the governor said he intends to again seek the authority to make midyear budget changes. "This budget continues California on the path of fiscal responsibility and economic recovery," Schwarzenegger said. The spending plan proposes no tax increases...

Ronald Reagan once said an economist is someone who sees something that works in practice and wonders if it would work in theory. So why is it that when confronted with a concept that works in both practice and theory, so many people refuse to believe it? The Laffer Curve, popularized by economist Arthur Laffer, says the government can maximize tax revenue by setting the tax rate at ... The logic is obvious on the ends of the spectrum: if the tax rate is 0%, the government collects no money. If it is 100%, people have no reason to earn,...

WASHINGTON - Consumers increased spending moderately in November even though the growth in their incomes slowed a bit, raising doubts about how strong the Christmas sales season will be. The Commerce Department said personal spending rose by 0.3 percent last month, slightly below the 0.4 percent gain that Wall Street had been expecting. Incomes rose by 0.3 percent last month, right in line with expectations. The holiday shopping season has turned in a mixed performance so far with the nation's retailers expected to increase discounting in the final days before Christmas in the hopes of making up for slower-than-expected sales...