Matthew Kaminski has a half-decent piece at the WSJ on California's dire budgetary straits. Although the author can't help himself from lapsing into Journal boilerplate in a few places (it's always "the unions" and "spending") he does identify the crux of the problem. Californians, like all American voters, have an emphatic answer when asked if they want more government services or lower taxes: they want both. As one of the lawmakers states in the article,

The people say they want all these programs, then there's nothing they want to pay for," says Hector De La Torre, a Democratic assemblyman. "The schizophrenia in the legislature reflects the peoples'.

In other words, the Sacramento is giving voters exactly what they want – extensive government programs and a tax burden nowhere near large enough to cover the costs. This could easily turn into Exhibit #1001 in support of the broadly recognized fact that Americans are idiots. While I find no fault with that conclusion, the phenomenon of American stupidity is not a sufficient explanation in this situation. The real culprit, fittingly enough, has California roots.

Americans are not so dumb that they cannot understand that state services cost money and that the state's income, primarily from taxes, must be sufficient to pay the bill. It used to be that voters were required to face this reality, to recognize that if they wanted Social Security and a gleaming fleet of aircraft carriers it would be paid for with appropriate levels of taxation. Then, circa 1975, a telegenic California Governor came along and told Americans that basic logic and reality no longer applied.

The message was simple: government can do expensive things and cut your taxes at the same time! How? By eliminating "waste." Note the key rhetorical distinction. Tax cuts would not be justified with reduced spending – they'd be paid for by cutting only the "bad" spending. Many a Republican, including the current Governator, took office with the naive impression that he'd look at the budget and see items like "One billion dollars for ivory backscratchers!" which could be prudently excised until the budget was balanced.

That was the trick. That's all there is or ever was to Reaganism. It's the idea that there is this huge, amorphous, readily identifiable mass of waste in every government budget which, once eliminated, enables giving people tax breaks while still meeting their basic demands for old age programs, a War on Drugs, the military, and so on. Just cut out the waste and everything will balance.

That idea might actually have worked if governments really did have the huge, unquestionably wasteful mounds of garbage in their budgets. In practice, of course, "waste" was defined by each individual voter as any spending that did not benefit him or her directly. Farmers considered their subsidies absolutely essential. Social programs aimed at inner cities are pure waste, though! The other lasting legacy of Reaganism – scapegoating "welfare queens" and urban blacks who apparently consumed 75% of the GDP – was nothing but an effort to provide people with an Other who could be assailed as the recipient of all the wasteful spending that white, conservative America was certain existed.

The impending bankruptcy of the State of California is the logical result of the kind of delusional and selfish thinking that portions of the GOP have encouraged for thirty years. The message isn't "cut spending", i.e. all spending. It's "Cut waste." Cut everything that doesn't benefit Me. When I benefit it's a public service. When you benefit it's welfare. So California's (and the nation's) economic problems have little to do with a collective failure to understand that the state cannot spend more than it takes in. The intractability is rooted in the widespread belief that we can protect what is Ours in the budget and still get huge tax breaks by eliminating that which benefits You.


  • Obama is channeling Reagan in this regard – claiming that we can spend and spend and spend, so long as we eliminate all of the "waste".

  • I think it's even more insidious than this. I read a quote from Donald Regan a few years ago. The gist of it was that by cutting the services that the middle class actually see a benefit from, you create a middle class that is against taxes in general and so every time you say "tax cut" regardless of who it benefits, the middle class is all for it. They aren't getting any benefit (that they can see) anyway so why should they be paying for it? Keep social safety net income limits so low they are almost impossible to meet and still be living indoors, keep college assistance out of the reach of middle class folks using the same strategy, and voila! People won't want to pay for them anymore, creating an instant wage slave class who will work for any wage whatsoever and keeping college educations for the children of those rich enough to pay out of pocket for it (to use just two examples).

    So, it's not just that Americans are dumb. It's that American stupidity has been deliberately manipulated to create this situation.

  • Well put Ed! Love it.

    You know, when I was at an election night party in November, I actually had my first experience of being around a bona fide tax complainer. The whole night he was saying how he bet on Obama to win so that he can recoup the money he is going to lose by his increased taxes. He repeated this piece of insight probably five times. He is an affluent suburban middle-aged white professor in the Bay Area, house valued ~1.5-2M, at least before the recession. Each time I heard of his bet-hedging scheme I thought about your original post a few month back where you described perfectly this bilious tax rage that has been stoked by Fox news and Rush Limbaugh, and I became more and more disgusted and by the end I was close to ruining the party by letting the gentleman know how I felt about his whining.

    This is so prevalent in our society. On the morning radio a few days ago, the people were talking about the woman with the octuplets, and their angle on the unusual event was that the mother was at fault for making MediCal, and thus the California taxpayers, foot the bill for the expensive postnatal treatment for her underweight babies.

    Dammit, I just want to grab these people by their lapels and scream "DONT YOU HAVE ANYTHING BETTER TO THINK ABOUT IN YOUR LIFE?"

  • Over the centuries it has been often observed that the greatest danger for a democracy comes when the people realize they can vote themselves money from the public purse. Next, politicians scramble for power by bribing the voters with the voters' own money.

    I read once that shortly after the Revolution a British politician said that this was the reason the American Experiment could not possibly succeed. He has yet to be proven wrong.

  • Just letting you know hating taxes has been around since our country, and is in fact why our country came into existence.

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