Free Republic

So far this year, three California cities have filed for bankruptcy protection, and it's likely they will be joined by at least a few others in the not-too-distant future. That's not merely journalistic speculation. Moody's Investment Service, which closely monitors state and local governments for the huge municipal bond industry, issued an unusual public warning the other day that other California cities may be headed down the same path. "To summarize," Moody's said, "we expect … more bankruptcy filings and bond defaults among California cities, reflecting the increased risk to bondholders as investors are asked to contribute to plans for...

A shadowy Phoenix-based group contributed $11 million Monday to a campaign committee funding attacks on Gov. Jerry Brown's tax initiative and supporting a measure curbing union dues collection, a new campaign finance report shows. Americans for Responsible Leadership gave the donation to Small Business Action Committee PAC, which is backing Proposition 32 and opposing Proposition 30. Before the latest contribution, the PAC had been heavily reliant on more than $20 million from Charles Munger Jr.

As he began his second governorship last year, Jerry Brown warned that California faced a potential "war of all against all" if the state budget was not fairly balanced, or as the former Catholic seminarian put it in Latin, "bellum omnium contra omnes." Brown now has the war he didn't want as Proposition 30, the tax increase ballot measure upon which he has staked his governorship, and perhaps his place in political history, is hammered from the left and the right by two very wealthy siblings, Charles and Molly Munger. Republican Charles, a Stanford University physicist, is giving millions to...

Jonathan Assink is a lifelong Democrat and unabashed supporter of Barack Obama. But asked about the president's plans for Social Security and Medicare, the 29-year-old shakes his head. "There's nothing there. It's just, 'We'll protect it.' Well, great, thanks. How?" said Assink, who lives in Edmonds and works as a barista in Seattle. "At least the other side talks about it."

Gov. Jerry Brown hoped a mix of politicking and good fortune would deter negative ads against his tax initiative in the campaign's final weeks. His luck expired in the last few days. Not one, but two, campaigns took aim at the governor's Proposition 30 on airwaves across the state, funded separately by two children of billionaire investor Charles Munger. The Democratic governor now faces a serious threat to the linchpin of his longer-term budget plan. Brown has been particularly frustrated by attorney Molly Munger's ad, which calls his campaign "misleading" and uses an animated sequence to depict politicians taking money...

The opening line of the Beatles’ iconic “Sergeant Pepper’s” album is echoing in my thought: “It was 20 years ago today…” Well, not quite to the day, but 20 years ago I published an article titled, “$4 Trillion and Counting.” In it, I despaired at the rapid increase in the national debt from its first-ever crossing of the $1 trillion mark during the Reagan presidency to four times that gargantuan amount in only a decade. Today, a mere two decades later, we have quadrupled the national debt again, to $16 trillion. (That figure represents the official national debt, but if...

The rambling incoherence of the people who write editorials for the Virginian Pilot has broken through the bounds of time and space to finally arrive in a completely new universe. A universe where the $430 million government subsidy to PBS is actually nothing, nada, zero. A universe where NOT SPENDING $430 million that we don’t have will have NO EFFECT on the federal deficit! Don’t believe me? Allow me to quote two lines from this editorial that is so mind-blowingly stupid that reading it will make destroy your brain cells: "Public broadcasting has nothing to do with the federal deficit....

The decisions by Campbell Soup Co. and Comcast Corp. to eliminate hundreds of California jobs rekindled the debate about the state's business climate – and forced Gov. Jerry Brown and others to leap to the state's defense. The announcements put state officials in familiar yet uncomfortable territory, having to explain why an employer was closing shop in California. Never mind that both companies said the business climate didn't drive their decisions. Even though California's job growth surpasses the U.S. average, the state remains susceptible to the charge that it's an inhospitable land of high taxes and red tape. Friday brought...

While the stock market in the US continues to surge (if not so much in China where the composite is back to 2009 lows) as the relentless liquidity tsunami makes its way into stocks, and other Fed frontrunning instruments, and only there, reality for everyone else refuses to wait. Last week we saw reality striking in Greece, where a section of Athens literally shut down after it ran out of all cash. Today, reality comes to the US, and specifically its poorest city, Camden, which is a twofer, doubling down also as America's deadliest city. It turns out Camden...

California's top air pollution regulator issued a spirited defense today of the state's new cap-and-trade greenhouse gas market, rejecting pleas from businesses to make significant changes to the program. Mary Nichols, chair of the California Air Resources Board, said the carbon market is designed to minimize the impact on businesses. Big business groups, like the California Chamber of Commerce, were scheduled to testify later today about their objections to the cap and trade market, the centerpiece of the state's global warming law, AB 32. Businesses say the market amounts to a $1 billion-plus annual tax that will destroy jobs and...

Jerry Brown fancies himself a futurist, exhorting us to act now to ensure a better tomorrow – with a bullet train and a more dependable water system his prime examples. Their merits notwithstanding, making decisions with long-term benefits is precisely what politicians should – but rarely – do. One wonders, however, how Brown squares his self-appointed role as progressive pathfinder with his regressive and potentially disastrous approach to the state's chronic gap between revenue and spending. While making some reductions in spending – although how permanent is questionable – the first two budgets that Brown signed during his second stint...

Gov. Jerry Brown, who will travel to Los Angles on Wednesday to sign legislation reducing public employee pension benefits, said today that the measure, though less sweeping than he proposed, is "the most that could be gotten" through his negotiations in Sacramento. "What I got was the most that could be gotten," the Democratic governor said in an interview with the Bay Area News Group's editorial boards. "Is it enough? No." The pension changes, approved by the Legislature despite opposition from labor unions and Republicans, will reduce benefits for future hires and require increased retirement contributions from current employees.

Arguing for more revenues to bolster the state's finances, Gov. Jerry Brown called his November tax initiative "common sense" Thursday and blamed his predecessor for leaving California with an ongoing budget gap. Brown contended that his Proposition 30 would initially raise roughly the same $7 billion that former Gov. Arnold Schwarzenegger eliminated by cutting the car tax and not raising taxes on out-of-state firms. The governor's Proposition 30 would increase taxes on high-income earners for seven years and sales for four years.

Gov. Jerry Brown spent much of last week trying to scare California voters into voting for higher taxes. Brown, speaking to community college students in San Diego, promised "real suffering by you and really our whole future" if voters reject his sales and income tax measure, Proposition 30. It's a somewhat disingenuous argument, albeit a clever one, rooted in the poll-tested assumption that education is the single most popular state program. ... Meanwhile, nearly 49 percent agreed with the opponents' argument against the measure, that the state wastes money on a bullet train and a legislative staff salary increase, while...

For the second time in as many business days, a major credit-rating agency said it expects more municipal bankruptcies and bond defaults - particularly in California, where cities have less flexibility to raise revenue or cut spending and face little intervention from the state.On Monday, Fitch Ratings said in a report that it "anticipates an increase in defaults and bankruptcies, although it does not expect them to be widespread." It said that recent bankruptcy filings by Stockton, San Bernardino and Mammoth Lakes "reflect perhaps the most difficult local government fiscal environment in the U.S.," adding that "fiscal crises are more likely in...

The Howard Jarvis Taxpayers Association is up with its second radio advertisement against Gov. Jerry Brown's November ballot initiative to raise taxes, comparing Brown's tax campaign to street robbery. "Hey, lady, hand over your purse or the schools get it," a voice at the top of the ad says. The ad, an issue-advocacy spot running statewide beginning today, comes as the Democratic governor begins in earnest to campaign for Proposition 30, his proposal to raise the state sales tax and income taxes on California's highest earners. The Democratic governor has characterized the election as a choice between higher taxes and...

Democrats say voters need look no further than California's $91 billion general fund budget to see how dramatically they have cut. That spending total is 11 percent below the state's pre-recession peak. But the number can be misleading. While California has cut education and services for the poor, budget writers also have relied on creative revenue streams and accounting maneuvers to move programs off the general fund books rather than cut them. That has made comparisons difficult and, experts say, contributed to state bookkeeping disparities that have emerged in recent weeks. "We've been through a period of extreme financial difficulty...

In a pointed letter critical of Gov. Jerry Brown's tax rival, California's two U.S. senators along with state legislative leaders called Thursday for a cease-fire from campaigns backing the two multibillion-dollar tax hikes on the November ballot. U.S. Senators Dianne Feinstein and Barbara Boxer, as well as Senate President Pro Tem Darrell Steinberg and Assembly Speaker John A. Pérez, said in a letter to the California State PTA that the Proposition 38 campaign has "become increasingly negative" and "engaged in personal attacks against Governor Jerry Brown and Prop. 30." The PTA has joined wealthy attorney Molly Munger in backing Proposition...

In presidential campaign ads, President Barack Obama claims that his economic plan includes “$4 trillion in deficit reduction.” For a president who has increased the national debt more than all U.S. presidents from George Washington to George H.W. Bush combined, the claim seems incredible. Indeed, it is. A new analysis of Mr. Obama’s budget reveals the president’s plan would add $10.6 trillion in debt accumulation over the next decade, bringing the U.S. federal debt to a jaw-dropping $25.4 trillion. Still, the president and his surrogates continue to claim the Obama plan would cut spending. “The President’s proposals… include a balanced...

California drivers pay fees for smog checks, vehicle registrations and new tires, all supposedly for programs that benefit roadway use. Consumers pay fees to recycle beverage containers, televisions and computers. Doctors and accountants pay license fees to regulate their industries. But for more than a decade, the special funds collecting these dollars have served a second purpose: helping California pay for schools, social services and prisons that are supposed to be funded by general taxes. California has 560 funds deemed "special" because in theory they're walled off from general state expenditures. In the face of two recessions, however, California reached...