Monday, November 10, 2008

Fiscal Responsibility! At Last!

Contrary to certain misinformed Conventional Wisdom, Dear Gentle Reader(s), liberals and progressives do not enjoy raising taxes.  We see the necessity to fund certain programs which bring benefit to the entire spectrum of the body politic.  Sound tax policies is indispensable to a capitalistic society. 

Therein, though, lies the problem.  Just what constitutes "sound tax policies?"  The recent tax situation in California goes a long way to proving that the tax policy of "borrow and spend" advocated the Republican party in California is, ahem, bankrupt, as Governor Schwarzenegger has finally come to realize.

As California struggles with its fiscal problems, it's good to remember a couple of steps along the way which were taken, and which, in retrospect, were most assuredly mistakes.

First, Governor Gray Davis was recalled primarily on the issue of the vehicle license fee, which he re-instated (remember, the tax had been lowered with the proviso that it would be re-instated if necessary).  Governor Schwarzenegger's first major action after he assumed the office was to remove the car tax, to the cost of some 4 billion dollars. 

As reported in The Los Angeles Times, "Schwarzenegger initially covered the cost and "balanced" the budget by talking voters into borrowing $15 billion. All that money is gone and we're still paying off the loan."

Recently the governor called for a tax hike of some 4 billion dollars. 

Think of it:  Schwarzenegger "cut" a tax, and borrowed $15 billion.  The state treasury is still paying off the loan, and the state is short that $4 billion plus interest, plus, plus, plus.

Mr. Schwarzenegger has finally come to his fiscal senses and tossed the Republican mantra of borrow and spend.  It isn't good policy.  Hopefully the California Republicans will follow suit and some fiscal sanity will come to the state.

Raising taxes to keep up with spending hurts, but borrowing to keep up with spending hurts more--except those who are in the lending business. 

Campaign donations, anyone?

Trust, but verify those final costs.

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