What is the most pragmatic fiscal policy approach when you’re faced with a $19.1 billion budget that has consumed 20% of your state’s general fund? California Democrats adamantly believe that higher and more taxes are precisely what will revitalize their state’s debt laden economy. Borrowing, taxing, and spending is the collective path that California legislature Democrats have chosen. This is the same caliber path that Congressional Democrats at the national level have chosen for our country. Evidently, given our continuous debt ceiling increases, our toxic national debt level, our increased government spending levels, and our increasing unemployment levels, it has become abundantly clear that this borrow, tax, and spend philosophy is not only impractical, but unsustainable as well.
The Los Angeles Times provides some insights regarding the California Democrats’ fiscal approach:
The Assembly's Democrats detailed a plan Tuesday that would tax oil companies and borrow billions from the nickel-and-dime deposits that consumers make on recyclable bottles and cans. Tax breaks for businesses that are scheduled to take effect soon would be delayed under the plan.
Reporting on the Senate Democrats’ plan, The Los Angeles Times reports:
Democrats in the Senate had begun debating a nearly $5-billion tax plan that would delay the same corporate tax breaks and extend both a hike in personal income taxes and a reduced dependent-care credit that are set to expire in December. Vehicle license fees would rise by $1.2 billion. Taxes on alcohol would increase 60%.
In response to these fundamentally similar and daunting budget proposals, Assembly Budget Committee Vice Chairman Jim Nielsen, struck back at the Democrats by saying that this higher taxes approach is precisely what generated California’s currently unsustainable debt levels. Furthermore, Assemblyman Jim Silva (R-Huntington Beach) dubs the Democrat endorsed plan as "the same old smoke and mirrors that has caused the state to limp along for years."
It is no secret that borrow, tax, and spend is an immensely flawed set of tactics when it comes to mitigating debt levels that are reaching such heights, and that will inextricably setback future generations at unprecedented levels. Why can’t California Democrats acknowledge, and then learn from the fact that taking more money out of taxpayer pockets (and consequently out of the marketplace) only limits opportunities for free market recovery and therefore exacerbates existing debt. Ultimately, borrow, tax, and spend is not what will rescue the ailing condition of California’s economy. It didn't work last year and it won't work again this year.