Economics and the California Republican Party: Never the Twain Shall Meet

This is a monumentally bad idea.

While many of the funds pegged for California would immediately help children, the poor and commuters, some Republican state lawmakers argue that the state should sock away some of the money for hard times in the future.

[Snip]

Villines agreed that avoiding costly borrowing would be prudent. But he had other ideas about using federal funds. Any federal money that “we might get should basically be put away into a … rainy-day fund for any potential future deficits if the economy continues to get worse,” he said, “as opposed to any budget factoring now.”

The purpose of the money is to stimulate economic recovery now, not to hoard it for the future. Apparently, statehouse Republicans don’t know the meaning of the word ‘stimulus’. The state Republican party should be disbanded, unless and until they can find people who know what they are talking about.

Finally, let’s look at this reporting:

One silver lining in the state’s deep fiscal crisis is that it has forced Republicans and Democrats to consider policies they had ardently opposed in the past, such as taxes and spending caps, experts say.

Which experts say that? Did you make that up, or are there really people who think that this kind of manic crisis budgeting is a good thing? Spending caps are a dangerously bad idea, as usually proposed. This is especially true if they are unable to account for population growth. New taxes are necessary, but Republicans have only willing to offer them in exchange for a spending cap.

The true silver lining of this crisis is that it may provoke the kind of massive structural reform the budget process needs: the abolition of the 2/3rd requirement for both the budget and taxes and the reconsideration of proposition 13; without both of which, we would not be in a crisis this severe. Unfortunately, it would be better to deal with this issues in the sober light of day, rather in the midst of a meltdown.

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