Webster’s dictionary defines bankruptcy as a state of financial ruin-the inability to pay one’s debts. That sure sounds like what is going on in California where Governor Gray Davis and the Democrats have saddled taxpayers with a massive 35 billion dollar deficit.
However, Webster offers a second definition that better explains California’s insolvency: being “wholly lacking or deprived of some essential.” Davis and his party are blind to the direct causal relationship between free enterprise and prosperity. They seem to think wealth is created in the mailroom of the Franchise Tax Board. Tragically, Davis’ policies are chaining the free men and destroying the free markets that are our only hope for avoiding economic paralysis and collapse.
This budget disaster was a self-inflicted wound. When Davis took office four years ago, the state’s economy had just emerged from a recession. He drove the Democrat-controlled legislature to rapidly deplete a 12 billion dollar surplus. The State budget shot up over 37 percent in two years (more than seven times the increase in population), despite economists’ warnings that the extra revenue was coming largely from taxes on stock options and capital gains.
In March 2000, the dot.com industry imploded and the stock market crashed. On March 22, 2000, then-Assembly Budget Chairwoman Denise Ducheny announced, “As we craft this year’s $88 billion dollar budget [up from 57 billion dollars two years earlier] it is our responsibility that the working men and women of this state benefit from such a remarkable economy.” Oblivious to what had just happened on Wall Street, Democrat spending continued to rise as revenues began to evaporate. The result is the fiscal crisis confronting us today-a governor who wants to spend 96.4 billion dollars and has come up 35 billion dollars short.
Who is to blame? According to Davis, it is “those who oppose our programs and resent our progress,” the “forces of reversal and retrenchment” who “contaminate our air and water,” and “manipulate our energy market and cheat us out of billions of dollars.” In other words, industry is at fault. The governor also blames Washington, demanding that President Bush hurry up and do something. Yet, California’s deficit exceeds that of every other state deficit combined! In fact, it is larger than the general fund of every other state except New York.
While President Bush wants to cut taxes to stimulate growth and restore investor confidence, Davis wants to raise taxes instead! Californians will soon be paying higher sales taxes, income taxes, cigarette taxes, car taxes, and increases in every fee imaginable. Davis wants to “find a way to wean state government off feast-and-famine budgeting,” so higher property taxes (killing Prop. 13) may be the next item on the menu. Each new tax will impose greater burdens on the people and businesses of California, further weakening the economy, increasing the shortfall, requiring more taxes, and on and on.
The goal of the Democrats in California in recent years has been to transform our free market system into a welfare state by means of single, concrete, specific measures, enlarging the power of the government a step at a time, never permitting their direction to be identified or the basic issue to be named. Step by step, the state has grown larger and more powerful, crippling business with soaring energy prices, skyrocketing worker’s compensation and unemployment insurance costs, mountains of red tape, and the most confiscatory lawsuit abuse in the nation. Socialism is coming, not by vote or by violence, but by slow rot-we will all just wake up one morning and the government will be in charge of everything. The role played by the Republicans in this farce seems to have been little more than to delay the inevitable.
There is a way out, short of moving to Arizona. We can pass a constitutional amendment to limit deficit spending. We can root out fraud, waste and abuse in Sacramento. We can slash state spending by 35 billion dollars. (We lived with a 57 billion dollar budget four years ago; we can “get by” with a 64 billion dollar budget today.) Finally, we can strive for limited government in California, placing a wall of separation, brick by brick, between state and economics just as we do between church and state-and for the same reason!
Are any of these measures likely or even possible? Not with over 1,200 well-paid lobbyists working the corridors of the State Capitol. Not with over 300,000 state employees and their unions fighting to keep state spending going up and up. Not with the most left-leaning Democrats in the country holding every constitutional statewide office and almost two-thirds of the Assembly and Senate. So, where does our hope lay?
There are millions of taxpayers in California who are struggling to balance their own families’ budgets and cannot afford to pay hundreds or thousands of dollars in new taxes. Up until now, they have been too busy going to work and raising their families to pay much attention to state politics. However, they lived through the Cold War of the 20th Century and remember its great lesson-that total government control over people’s lives leads to unspeakable human misery. Perhaps the vast middle class will finally rise up with one voice to refuse Gray Davis’ bloody taxes and shout, “Enough; leave us alone!” I pray we Republicans will have the vision and courage to act swiftly and decisively when they do. Then, perhaps, we may restore economic liberty and prosperity in California.
