It happens in households everywhere. Mom and Dad sit at the table and discuss finances.
"That trip to D.C. would be nice this year, but I just don't see how on earth we're going to get there. Until we get those credit cards paid down, we're going to end up a couple thousand short."
"We have six months, right? What if we give up eating out on Fridays, and see if the kids want to take a break from swimming and dancing lessons this summer? That might help..."
It used to be axiomatic that if moms and dads ran their finances the way "the government" did, they would soon find themselves in bankruptcy.
A very large part of what has brought this country to its financial knees today is the fact that many households — far more than when Woody was a young pup — run their finances precisely the way governments do: buy whatever you want; borrow for whatever you can't pay up front; hope it'll sort itself out in the end. Add to that a healthy dose of entitlement (i.e., I am a carbon-based life form and therefore I deserve a house) and you have the makings of a financial collapse.
It will be instructive to watch how Sacramento deals with the fact that voters are tired of fronting their addiction to spending. Many of those voters are, of course, to blame for Sacramento's addiction. For years we've been approving spending measures, bonds, and all manner of budget-shuffling initiatives that have taken whatever surpluses we might have claimed years ago and made them disappear faster than an Obama campaign pledge.
But the voters have finally declared "enough" to Schwarzenegger and the Girly Men. Time to cut bait, folks. Your fishing days are over.
Except that they're not. No, the Governator has already signalled that he feels no compunctions about taking money away from county and city governments. He claims this would be a "worst-case scenario" of course, but we all know what's coming. (His actual words were "I absolutely despise taking money from local government, but...") (And, yes, that's one mighty large "but.")
The bailout has made things worse. Obama's plan to create money where none exists is troublesome in the extreme. There is absolutely nothing of value backing up his monetary projections right now, and he's already indicated that we need to make it easier, not harder, for high-risk borrowers to get home loans in the future. This will set up a never-ending round of loan defaults, blaming everyone but the people responsible, then re-regulating the industry ad infinitum until they go out of business.
So California has tough choices to make now. I don't see them making the truly tough ones. They might make the "tough" decisions to take money from other sources, but will absolutely refuse to slash things like education or health services while calling for massive reforms in those services.
My suggestion would be locking them in a room and not feeding them until they deliver a budget that makes sense. They may as well get used to the idea right now that, no matter what they do, no one is going to like it. Not one little bit. The unions will howl. The voters will gnash their teeth.
But if it brings forward an actual balanced budget, I'll be willing to live with it.
WINTER OLYMPICS UPDATE FROM 1998
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