My Canadian counterpart-as he so often does- has captured in a few sentences, why Dr. Laffer is wrong:
California is precisely why I distrust supply-side economics so much. While tax cuts may increase revenue in the short term that revenue almost never matches increases in spending. As a matter of fact, it never has in my lifetime. Not once. At some point, you have to recognize that an experiment has failed. There’s actually a term to describe someone who does the same thing over and over, expecting a different result.
Don’t get me wrong, I love tax cuts. That being said, I like not bankrupting entire nations even more. And since politicians are always going to buy their re-election with my money, massive tax cuts are ultimately self-defeating. One need only look at the debt racked up by people like George W. Bush and Stephen Harper to know what those tax cuts are ultimately going to cost them. If you want to see the ultimate example of the “audacity of hope,” look no further than the Bush tax cuts, which relied on nothing other than hope that revenues would pay for them and the trillions of increased spending besides.
I’ve come to the conclusion that supply-side can never work in a democracy. Politicians will always attempt to buy their re-election with public money. That’s what democratic politics is all about and always has been, and it’s silly to assume that you can adapt a political system to an economic theory, particularly where selfish and ignorant voters always have the final word.
In California, we’re seeing what happens when popular democracy and bad economics collide. Prop 13 essentially crippled the ability of the government to actually govern while thirty years of subsequent ballot initiatives sent spending through the roof. The attitude of Californians for decades is that they could have it all and not actually pay for any of it. We’re now seeing where that philosophy has led, and it looks a lot like Zimbabwe.
In other word’s-the Republican vision of heaven.
At some point the people are going to have to be responsible for their own goddamned democracy. And as long as the United States government perpetuates the idea of its own economic supremacy, it’s going to have to be responsible to the rest of the world.
The most recent economic disaster was a completely made in America phenomenon and the United States has yet to accept responsibility for that. The U.S has demanded that its dollar be used as the currency of choice in the trading of important commodities like oil in the international market. But when Bush went about destroying the dollar and accelerated that destruction under Obama, those commodities become more expensive for all of us.
But its all about the largesse the Californians gave to themselves and its all their liberal government. And all those illegal immigrants.
They helped-but there was a bigger culprit-the voters themselves. Time to send out for some LKY ( Le Kwan Yew-democracy in name only):
As much as conservatives would like to pretend otherwise, this can’t be blamed on the government of California because of its constitutional system. Everything that has led the state to the place that its in today was directly voted on by the people. They put themselves in this position, not the government.
Even worse, the people still haven’t learned their lesson. As late as last month’s special election, with full knowledge of what was about to befall them, Californians still voted for the status quo. They just don’t care.
And that’s where Sarah Palin is either dishonest or wrong. At some point, people should lose their freedoms. If their exercises in self-indulgent idiocy begins costing the residents of the other 49 states their hard earned money, maybe they shouldn’t be allowed to abuse their freedom again. Of course, that will necessarily mean limiting that freedom. Despite Palin’s idiotic assertions to the contrary, it isn’t the government that’s slowly destroying federalism, in the case of California, it’s the people.
Welcome to the brave new world.
What government entity that exists NOW, either state or fed. is run effectively and efficiently? They are almost never the solution.
YOU work with the government so no one knows better than you how poorly they conduct business. Remember that small news ariticle a few weeks ago that Homeland security finally realized that they could save money on office supplies if they bought in bulk. Duh?
I have NO faith in the people, who ,for the most part, are uneducated, emotional dolts or the government comprised of folks who could not find a real job. Where common sense is not considered an attribute.
People of the 49: California drop dead.
As for me, thank goodness I kept my Y2K escape pod.
The skippy statists always seem to derive conclusions from facts not in evidence. I’m not even going to look but did revenue to the public fisc INCREASE or DECREASE after the Bush Tax cuts? What about this; INCREASE or DECREASE after the Kennedy Tax cuts? What about this; INCREASE or DECREASE after the Reagan Tax Cuts?
So to me, it looks like revenue to the government increased across the board under each tax cut so what possibly could have made the stalinists think that tax cuts are to blame for increased public spending? What does the one have to do with the other? It looks like more money is rolling in to the legislature but they have no governor on spending and since they are not compelled to provide a balanced budget they use tricks and have used them for generations. At the national level that means that there is no money in the social security trust fund. Yes, I know that surprises you. At the state and local level it means that public employee pensions have gone underfunded for a generation even as public employees successfully “negotiated” with other public employees (the legislature and councilmen who supposedly are there to look out for the tax payers interests but who it seems have this totally overlooked conflict of interest which finds them nodding their heads in agreement at public employee wages twice the going private sector with the generous option of retiring at 50 at 100% of salary with full medical, no deductible. Sweet.
The stalinists find this worthy and demand that the 25-30% of us who pay taxes should just keep chipping in and paying whatever the legislature demands. In CA though the constitutional initiative was put in place at the outset to give power to the people and so Prop 13 came out to overwhelming voter approval.
Look at what those imbeciles in Alaska get for electing Republicans….they get money from the state! As the skippy’s would say, what kind of crap is that, giving taxpayers checks from the state! Of course, they also decided to develop their oil industry, explore for it, drill it, build pipelines, build oil ports and tax it. They’re doing the same with gas. Contrast that with the imbeciles in CA who elected democrats to the legislature and they pass laws forbidding drilling for oil in CA or offshore and support national legislation forbidding the same thing. They find great value in the delta smelt and decide that the Imperial Valley, home of the greatest concentration of agriculture in the world must have the water spigot turned off. They support the archaic Coastal Commission which impedes progress in everything and refers to boats in San Francisco Bay as bayfill and wants the power to regulate them as hazardous waste.
The state legislature today refused an across the board pay cut of 5% for public employees. It would only save $450 million out of a $35 billion deficit. Our prison guards make twice the national average as do our teachers and unlike Alaska who is ranked in the 30’s, CA is ranked near dead last in education. We spend a lot of money that most of us here have come to see as totally wasted.
I’m prepared to watch the continued decline and fall of the state of California. It should prove beneficial for those who believe that these same sorts of insane policies/politics can be implemented at the national level and do anything but ruin the economy and result in foreclosure.
The skippies need to study monetary policy a little longer before wading in with twaddle about the US forcing the world to adopt a dollar standard. That wasn’t us, that was them and the why becomes clear when you look at S. America, Africa and other places which decided to no longer keep their currencies pegged to the $.
Public revenue increases only matter if expeditures are matched to incoming revenue. Starting stupid wars on behalf of Arabs is a poor way to balance the budget.
Prop-13 was a disaster for California-as is the rest of their proposition system. No governor has been able to actually govern in California for about ten years.
You should check your stats again. Califonia ranks in the mid 30’s in education-about the same as Alaska, with ten times the students of Alaska. (For calendar year 2008).
You might want to go back and review some of your other facts about Alaska. Exxon Mobil only recently agreed to particpate in the Trans Canada pipeline-after Saint Sarah went after them for three years straight and now that they have finally agreed to something they could have had 3 years ago-BUT FOR THE GOVENOR OF ALASKA, it will cost the state more money that it would have before. Good Job Sarah!
You really should have read the rest of the article. The other 49 will be forced to do something to save California-because it cannot abide the anarchy that will come. You would also have learned that a lot of the tax cuts were actually transferred to the states who had to make good differences in spending.
Curtis,
So pass a balanced budget amendment. That should take about a century. Also, passing one without a cute escape hatch that says “unless we really, really want a precription drug benefit” would be great, too.
As to Palin’s windfall profits tax, I’m glad to see that you’re such a good Democrat, since that’s a major part of their platform. Oh, and Palin herself increased the Alaska tax, didn’t she? So which industry would you like to tax to get your lucre, Curtis?
Furthermore, Alaskans didn’t develop a fucking thing. The oil companies did and very likely with state and federal subsidies at that. Christ, Alaska is run more like Saudi Arabia than anything the lower 48 would recognize.
Also, if you’re going be the next Reagan, please explain to us why Alaska should receive so much money from the federal government if Alaska is going to throw around money to people who don’t pay any state taxes. Isn’t that a glorified welfare program – y’know, spreading the wealth around? Why should the taxpayers of Alabama or Texas subsidize that?
You might have a point if Alaskans paid any taxes at all, but they don’t and you don’t.
What Skippystalin said.
Although, some of the people I work with, benefit directly from the Alaska cash cow-since none of the design, engineering and test work on a huge federal project seems to be done in Alaska. Something about cold weather and no good college football……
Skippies,
Sort of a hopscotch answer here:
1. Pass a balanced budget amendment in the state of California. Total nonstarter. Should such an amendment be passed again I’m sure that the state supreme court would reject it out of hand due to the immediate adverse impact such an act would have on the poor and oppressed and minorities and GLTGB folks in CA. Also, as usual the legal branch would step in and direct the legislature to honor its public employee commitments at any and all costs to include ‘forcing’ HA! the legislature to raise taxes or go to jail. Kind of not such a winning strategy after all. My plan is to let the state go bankrupt and renogiate all contracts and pensions and terminate 30,000 state employees.
2. Windfall profits and taxes. We appear to have a difference of opinion on what constitutes a windfall tax. You seem to see a windfall as any tax on profit deemed excess. I don’t see the state of Alaska imposing a tax on oil company exports of native Alaskan resources as a “windfall”. I see it that as the state making money on the sale abroad of a resource that belongs ‘in common’ to the people of Alaska and I cheer a state that decides that since that money was made by the sale of Alaska’s resources some of the money from that sale should be returned to the owners of that resource. Seems fair to me. Let’s see California does in that regard as it sold oil leases generations ago offshore before it stopped and forbade any new offshore drilling. Did they share the wealth for selling a CA natural resource belonging to no man? I think not. Oil drilled ashore belongs on land owned by some person. Underground rights ownership is a mixed bag for me. Some states allow the rights to be sold separate from the land. How it works in Cal I have no idea.
3. You ask what business I would tax. All of them and no exceptions for charities or churches either. I’d definitely go after the drug gangs and take 50% windfall profits out of their organizations. All law firms would be taxed at 50% on all income. More to the point every single person making more than $10k/year would pay the same % of tax. 3/4 of the people are all for upping taxes on other people as long as it’s not them and that’s bullshit. If you don’t have skin the game you shouldn’t be allowed to vote and certainly not to vote to raise my taxes while risking nothing yourself.
4. You’re a literal minded sob aren’t you. When I said Alaskans developed their resources what I really meant was that they voted to allow all that development and they worked to make it come true all of which flies in the face of the NIMBYism and nonononononononono! that you see from liberals in the rest of the states. Look at the Kennedy’s vetoing the windfarm offshore from the palace by the sea.
5. The more I thought about Alaska as Saudi Arabia the more apt the comparison up to a point. The 7 sisters developed and exploited the natives until they pulled together and started to push back, Palin, and then you think about the ARAMCO structure of AK with the westerners living in little compounds, some of them, such as the capitol, unreachable by road, surrounded by rugged mankilling wilderness and wild people who are coming around to the notion of joining the 21st century. I remember walking through some of the modern villages that the Saudi kings built to host the beduins who all refused to settle down and give up the nomdadic life and stayed with their camels. I can’t recall if the AK courts have joined the lower 48 in letting tribal councils deal with petty native criminals for crimes such as murder, child rape etc but it would be like having theirf own Mutawa and Sharia court systems wouldn’t it.
6. One of the reasons that money flows from the fed is in recompense for the simple fact that the fed denies the state of Alaska the right to exploit its own resources because it has seized half the land and placed it under federal control. Remember that whole bruhaha about drilling in ANWAR? Why was that a federal issue? oooh ooooh pick me! I know!
7. Skippy, I don’t pay taxes? Wherever did you get that idea? I spent the last 3 years as an active duty navy captain. You probably have some idea what kind of taxes I paid. I only spent one week of that qualifying for one tax free month. I sold an $800k home that last year. Trust me. I pay taxes.
8. Now skippysan your first paragragh agrees 100% with supply side economics since as you allocute, public revenues increased! Damn those islamic terrorists for knocking down the WTC and attacking us and why weren’t we Christian enough to just turn the other cheek rather than going all bugfuck crazy and “STARTING” a motherfucking war. Us stupid bastards should have known better than to START the war. How could we not have realized that it would have an impact on our spending if WE STARTED a fucking war?
9. PROP 13 was a wake up call for the CA government that the people many of whom lived a fixed income were gradually being taxed out of their fully paid off homes. Pensioners in the 70’s were having their homes sold to meet tax liens imposed by unforeseen increases in property taxes fueled by insatiable demands to raise revenue to meet the increasing demands on the state from trying illegals, jailing illegals, educating illegals, treating illegals in hospital and of course the perverse spending imperatives of the Alinsky socialists who had taken control of the state legislature and would not stop spending money they did not have. It took a governor who would veto them and in Jerry Brown and so many others Californians did not get lucky in their gubernatorial choices.
10. I tried some online fact checks but don’t have the resources to find statistics I trust. Everything that comes up in google is clearly partisan when what I need is the old fact book or recent census material. One of the first cites on state ranking for education put CA 46 and AK 44 but there was no method for the ranking. I put a lot of faith in experience when it comes to education. I am a product of state schooling in Texas, Virginia, Rhode Island, Alabama (Huntsville) and New Jersey. I have private school experience in Virginia and Rhode Island and spent 2 years in a DoD School at Fort Riley, Kansas. I have to say that what I see here in CA in terms of infrastructure is about 3 orders of magnitude newer and more sophisticated than anything I saw or required. The state spares no expense. Get that? It is broke and has been for decades and it has spared no expense in education for decades.
As I said, the other 49 need to let this state undergo the consequences of its action since it will serve as a grotesque and horrible example of what the rest of the country is bound for. Of course, you democrats can’t have that! Nobody must know how dire the ONE’s impact will be on the U.S..