Brokeback California

In his blog today Ross Douthat bemoans the current state of American government spending and warns of its impending slide into... California. This is an increasingly popular reference and one I'm not sure I'd disagree with. He points to 2 essays by William Voegeli which specify what, in tarnation, is wrong with California.

The first, The Big-Spending, High-Taxing, Lousy-Services Paradigm, lays out the crux of the issue:

What is surprising is the growing evidence that the low-benefit, low-tax alternative succeeds not only on its own terms but also according to the criteria used by defenders of high benefits and high taxes. Whatever theoretical claims are made for imposing high taxes to provide generous government benefits, the practical reality is that these public goods are, increasingly, neither public nor good: their beneficiaries are mostly the service providers themselves, and their quality is poor. For evidence, look to the two largest states in the nation, which are fine representatives of the liberal and conservative alternatives.

So basically, paying less for less ultimately gets you more than paying more for more. He goes on to lay out what he considers is wrong with California.

I must say I find his writing style graceful, yet his arguments unpersuasive.

His main point is that California pays too much and receives to little; its services are inefficient and ineffective. Yet while he does a good job cherry-picking some obviously distasteful-seeming expenditures, he then admits that they represent a small portion of the budget. Instead, he says, their continued defense simply illustrates California politicians' intransigence.

The real problem is the costly pension system, which apparently is too luxurious. Really? Even if this were the case, it hardly seems as though it can receive the blame for California's services being inefficient and ineffective. Unfortunately Voegeli spends almost zero time delving into just how and why these services are so poor. One could almost say that, if pensions were to blame, the only correlation might be to the funds they siphon away. Yet this doesn't make the case for inefficiency and ineffectiveness, but rather underfunding - a position of which I'm sure Voegeli would not approve.

What's Wrong With California?

Californians have been described as having “political schizophrenia” – they want to spend without paying the taxes to support it. Then they complain about their elected representatives…

Lately I’ve been thinking about the “starve the beast” concept in reverse. Proposition 13, which made it incredibly difficult to raise taxes, is now forcing the state to cut spending on services across the board. This is the idea behind starving the beast. And now class sizes are through the roof, clinics are closing, tuition is hiking, etc., etc. As people start to see the effects of low levels of spending, will they finally turn around and “put their money where their values are”?

I believe that people want these services. But they have bought into the conservative myth that cutting taxes will solve all of our problems – force government to be more efficient, stimulate the economy, create jobs and ultimately increase government tax revenue. Republicans repeat this over and over – their solution to everything is to cut taxes. And when government goes broke it isn’t because of low taxes, it is because of inefficiencies, unions, or illegal immigrants – that’s a really popular one. The strangest part of this to me is how little taxes end up being for so many of us. Supporting a wife and 2 kids on an income of $45K last year, with no property I paid $147. On a $250,000 home I would have paid a state average of $1500. That’s an average monthly payment of $137, or 3% of yearly income. And that’s for the privilege of living in the beautiful state of California.

Of course many simply don’t want to pay for health care, education, etc. – and although their political views are at least more consistent, they don’t represent anything like a, well, moral majority.

The worst analogy is the macro = micro. You know, the one where government budgets are equated with family budgets. “When our family can’t pay the bills, we have to cut spending”. Of course, no one would ever say, “when our family can’t pay the bills, we stop working and reduce our income”. But this is level at which many people approach economics.

I think in the end it is a fundamental ignorance of the citizenry – not of what they actually believe, but in their understanding of what policies will get them there.