Monday, June 22, 2009

California's overdue budget cuts

Finally coming. I notice the fiscal stimulus as it arrived in California managed to delay the cuts for a few months, so mark that multiplier as less than one.

California was due for cutting back five years ago when government jobs held the second fastest growth in my community, just behind house construction. Three of four of my neighbors relied on government salary. The house I rent out in the city had four students, whose parents were 75% employed in government jobs. California teachers always talked about classrooms; yet the smart high school kids were off on personal study aided by technology, a system run out of a converted strip mall. In central California the real shadow government are the government service unions. When one of the student renters voted in support of the Bullet Train bond, I asked him who was paying taxes. Looking around, he discovers the only tax to pay for the Bullet was my property taxes, of which he paid a substantial share while living in student poverty.

The government reform in California is long overdue, and California growth will be better for it. We could have been at this a year ago, one year ahead of the game except for Keynes and his twisted logic.

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