Thursday, August 19, 2010

Protest AB 32 - Support Prop 23

With the state of California about to issue IOUs, again, you would think that opposition to AB32, California's version of cap & trade would be an easy call. As noted by Temple of Mut:
This is an important issue. A California State University study estimates that compliance with the regulations derived from AB32 will cost an average family cost about $3,900 per year, a small business about $50,000 per year, and will result in a total loss of business output in the range of $180 billion yearly.

Not such an easy call for Meg Whitman, who has said "she would probably vote against Proposition 23, which would create a moratorium on the state's landmark climate-change law." To let Meg know of her foolishness, join the Tea Party in protesting Meg at the Grand Hyatt next to the San Diego Convention Center, Friday, Aug 20 (tomorrow) at 5:00 p.m. Temple of Mut has the details.

About those IOUs.

From the Financial Times:

John Chiang, California’s controller, told the Financial Times that the state was once again flirting with IOUs because of a budget stalemate between Arnold Schwarzenegger, its governor, and the state government. The budget is two months late.
KT has an interesting comment about the effort to make the IOUs a pseudo-legal tender:

Essentially, this creates a new currency, one only valid within the government. The money is trapped entirely within the State economy since you can't use it to buy things from private parties. The idea of being able to use the IOUs within the State seems like a good idea until you pair it with our growing Justicialism. Consider this.

The government owns GM. Ford is a private company. If you can use IOUs to buy government products, but nothing else, then Ford is at a significant disadvantage. This example is Federal, but it illustrates the entangling nature of fascism. Working with the government becomes the preferred means of doing business when the government grows in all directions. Anyone left outside has all kinds of problems, from regulatory ones to being able to be paid.

Root Causes

Last March, I set out to explain the causes of the seemingly perennial budget madness in California (with pictures) and concluded the state employees pensions are the prime culprit. Until we deal with reducing the current and future pension costs, we are doomed to never have enough money to run the state. (By the way, this is why I was initially excited about Meg Whitman, she seemed to have a tough agenda to take on the unions.) In today's WSJ, R. Eden Martin comes to the same conclusions, and calls out some solutions, the comments I like follow:

Bailing out state pensions would be astronomically expensive. According to a Pew Foundation estimate this year, the total unfunded liabilities of the 50 states' pension funds amounted to about $1 trillion in 2008.
Current defined benefit pension plans would be "frozen," meaning no new benefits would be accrued under those plans.
Participating states could set up new retirement programs for both current and new employees in the form of defined contribution plans such as 401(k)s.
Though state laws vary, many states and cities may be able to take the legal position that they are not liable as guarantors if and when a pension fund goes under. In Illinois, a retiree's contract claim would be against the pension fund, not the state. In any event, practically speaking, it is not likely that retirees would be able to recover tens of billions of dollars in past pension claims against their states.
The ruling class' arrogance and greed has finally become too much for America's economy to handle. This is why I am voting for the candidates best positioned to take on the unions. This is making for some uncomfortable political bed fellows, but remember this single and simple truth:

Government growth threatens our liberty and our prosperity.

1 comment:

  1. So what do I do with my vote? Meg is a liar and Moombeam is a disaster. My choices suck.