» posted on Wednesday, January 6th, 2010 at 10:00 pm by Damien Baldino
Arnold Schwarzenegger looks for a bail-out
California is facing a deficit of $18.9 billion, but its residents need not worry because Arnold Schwarzenegger has a plan: He’s asking the federal government for more money. Maybe I’m old fashioned, but I believe that when you get yourself into trouble, you should work to get yourself out. After years of mismanagement of California’s budget, he’s hoping he can spread the pain to tax payers in other states. If you think that’s despicable, I don’t blame you.
Schwarzenegger’s supporters would likely point to the Governor’s other ideas, such as overhauling the pension system and privatizing prisons. Both of these are great ideas, but the fact remains that California is spending more than it earns in revenue. Opposing tax increases is commendable, since the state doesn’t have a revenue problem, it has a spending problem. Unfortunately, the Governor wants to hold down the taxes of Californians by begging the Obama Administration for money to help plug holes in his sinking ship.
From a political stand point, Schwarzenegger’s attempt to get federal money makes sense. He can avoid raising taxes and major cuts, which will both draw criticism. Instead, he can label the state’s problems as a case of it not getting its fair share from the federal government. If he’s successful, taxes won’t need to be raised, cuts won’t be as deep, and he’ll portray himself as a hero for getting his “fair share” from the evil feds. Hopefully, he won’t be successful.
If Schwarzenegger’s plan works, it will merely be a band-aid for the current fiscal year. The solution to California’s problem is more complex that a federal hand-out. It begins by summoning the political coverage to demand that the state live within its means. Unfortunately for Californians, political courage and fiscal conservatism are not Arnold Schwarzenegger’s strong suit.
filed under Economy · Politics | one Comment

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