CA: The budget hole

Riverside Press-Enterprise ^ | 1/21/06 | Editorial

[NormsRevenge]

The rule of holes says that when you're in one, stop digging. But as the state's legislative analyst pointed out earlier this month, Gov. Schwarzenegger takes the opposite approach in his budget proposal for 2006-07.

Schwarzenegger's plans call for the state to spend $6.4 billion more than it will receive in revenue. Instead of closing the built-in gap between spending and income, the governor's budget would ratchet up ongoing spending by $2 billion, the analyst says.

And that does not include nearly $1 billion in potential unbudgeted costs from lawsuits, salary negotiations and other liabilities. Only higher-than-expected revenue over the past two years makes the proposed budget balance -- and there is no guarantee the extra money will continue to roll in.

Even the governor's own Finance Department projects that the state's operating deficits will sail to a high of $9.7 billion in 2008-09. It's difficult to see this budget as the "path toward fiscal responsibility and economic recovery" the governor touted on Jan. 10.

The legislative analyst is right: The state should use the windfall to help fill its chronic deficit hole -- not embark on a new spending spree. This budget plan may be Schwarzenegger positioning himself for re-election. But no gubernatorial candidate, regardless of party, should run on fiscal irresponsibility.

[Rockitz]

I'm guessing that Arnold is going to disguise the accumulated debt by lumping it into his request for massive infrastructure spending bonds- the old shell game.

[WilliamofCarmichael]

Budget dust.

www.doubletongued.org says it's money said to be insignificant when compared to other (planned) expenditures

www.buzzwhack.com says it's year-end money that must be spent before it is swept away by the cold winds of a new fiscal year

I think California critters say it's both.

It's only dust. Ho hum.

[M-cubed]

The rule of holes says that when you're in one, stop digging. But as the state's legislative analyst pointed out earlier this month, Gov. Schwarzenegger takes the opposite approach in his budget proposal for 2006-07.<<<

The annalist are comparing apples to oranges...Correct in the rule of holes..wrong on the rules of "fiat money" ...the law of fiat money throughout history is:..All fiat money goes to zero!..No exceptions! Not that i like the idea..but..unfortunately, when viewed in the bigger picture, it makes sense... Greenspan understands this quite well http://www.321gold.com/fed/greenspan/1966.html Sooner or later the American public will understand this and we'll see why "Greshams Law" is a law...