Free Republic

A NEW study names Australia and New Zealand the leaders in "fiscal responsibility" among top industrial nations, while the United States plumbs the lower rankings at number 28. The Sovereign Fiscal Responsibility Index, developed at Stanford University, said mounting indebtedness and budget deficits put the United States in a class with troubled economies like Ireland (number 29) and Italy (27). But Australia and New Zealand, followed closely by Estonia, Sweden, and China, stand at the top for their capacity to maintain strong fiscal balances decades into the future. "There is great potential for a fiscal crisis in many countries, including...

The most important thing about the stalemate was that it failed to accomplish the one thing it should have done, which was to force the governor and legislators of both parties to own up to the state's precarious finances and take some concrete steps to improve them. Although Schwarzenegger has pledged to veto about $700 million in spending to bring the budget into operational balance, it's a fiscal house of cards. The budget itself is based on unrealistic assumptions, especially on the revenue side of the ledger, and much of his supposed spending reduction is just bookkeeping sleight of hand...

When California voters rejected, by a 3-to-2 margin, Gov. Schwarzenegger's budget- reform measure last week, it left the fiscal status quo intact — and that means that the state's deficit-ridden budget continues to gush red ink.California is still obligated by either law or political mandate to spend roughly 5% to 7% more than its revenue system can produce, even during a prosperous economy. The Legislature's independent budget office has estimated that the state would need to spend $94 billion in 2005-06 to cover the obligations of current law, but that revenues are forecast at about $88 billion. Those numbers will...

Although Gov. Arnold Schwarzenegger's new spending plan contains less borrowing than he initially proposed, California still is strapped with more than $25 billion in debt from a variety of loans and bond sales used to help cover budget shortfalls during the last five fiscally dismal years. (snip) Elizabeth Hill, the state's nonpartisan legislative analyst, has estimated the state will pay about $4 billion next fiscal year to begin chipping away at its budget-related debts and interest. (snip) Davis' budgets, for instance, included the sale of bonds to be paid back in future years with the state's proceeds from tobacco lawsuit...