By the time you read this, the Obama administration will, no doubt, have bailed out the state of California. How can we be sure? Because it announced, on June 16, that it wouldn’t bail out California.
As National Review blogger Jim Geraghty often writes, “All statements from Barack Obama come with an expiration date. All of them.” California, like General (Government) Motors, AIG and Chrysler, will no doubt be labeled “too big to fail” and bailed out. If not by now, then some time in the weeks ahead.
That’s unfortunate, because there’s a simple solution to the Golden State’s difficulty.
First, the problem: The state’s government has spent too much and run up a massive deficit. It’s raised income taxes in an attempt to cover the shortfall. But that simply drives productive taxpayers to other states -- even as unproductive non-taxpayers are drawn to the state to take advantage of its lavish welfare benefits.
That downward spiral has left California facing a $24 billion deficit for the fiscal year that starts July 1. Hence the pleas for a federal bailout. “I can’t speak for the president, but when you’ve got the 8th biggest economy in the world sitting as one of your 50 states, it’s hard to see how the country recovers if that state does not,” Democratic Rep. Zoe Lofgren told reporters. As if Washington -- now borrowing 50 cents of every dollar it spends -- is really in better fiscal shape.
So how can California possibly survive? Try going back in time, all the way to the year 2000.
Those days are difficult to remember now. The Y2K computer scare had just passed. American companies and the federal government spent billions of dollars rewriting code to keep their computers from crashing on 1/1/2000.
And nothing happened. No nuclear missiles launched. No bank accounts were erased. By noon it was clear the most exciting event that New Years Day would be the Rose Bowl. CNN, which had planned to cover the carnage live for 100 straight hours, sent its anchors home and went back to prerecorded fare.
California’s total budget for the fiscal year that started in July 2000 was $96 billion. So the simple solution is for California to pull out the year 2000 budget, blow the dust off it, and approve it, word for word, as the state’s 2009 budget.