Kevin Hassett at Bloomberg.com declares that California's economic nightmare will kill Obamanomics. Everything that's wrong with California is writ large in the federal government. When people see how that once great and prosperous state is turning itself into an economic basket case unable to pay its bills and without any light at the end of the fiscal tunnel, they'll finally, one hopes, come to see that Obama and his team have been almost criminally reckless in driving up our national debt and insuring economic hard times in this country for generations to come.
Here are some excerpts from Hassett's column:
With California mired in a budget crisis, largely the result of a political impasse that makes spending cuts and tax increases impossible, Controller John Chiang said the state planned to issue $3.3 billion in IOU's in July alone. Instead of cash, those who do business with California will get slips of paper.
The California morass has Democrats in Washington trembling. The reason is simple. If Obama's health-care plan passes, then we may well end up paying for it with federal slips of paper worth less than California's. Obama has bet everything on passing health care this year. The publicity surrounding the California debt fiasco almost assures his resounding defeat.
California has engaged in an orgy of spending, but, compared with our federal government, its legislators should feel chaste. The California deficit this year is now north of $26 billion. The U.S. federal deficit will be, according to the latest numbers, almost 70 times larger.
The federal picture is so bleak because the Obama administration is the most fiscally irresponsible in the history of the U.S. I would imagine that he would be the intergalactic champion as well, if we could gather the data on deficits on other worlds. Obama has taken George W. Bush's inattention to deficits and elevated it to an art form.
Nobody believes that [Obama's] unprecedented expansion of the welfare state will lead to enough economic growth. Nobody believes that it will pay for itself. Everyone understands that higher spending today begets higher spending tomorrow. That means that his economic strategy simply doesn't add up.
As bad as the California legislature has been over the years, it has never entered a fiscal crisis like the one that we face today and then doubled down with a massive spending increase. In the end, when times got tough, patriotic and sensible Californians of both parties stood up and began acting like adults.
With the price tag of Obama-care likely to exceed $1 trillion, moderate Democrats face a simple choice. They can jump off the cliff with the president, or they can stay true to the principles that they have espoused throughout their careers.
Perhaps there are two things for which we may hope: First, that moderate Senate Democrats will join Republicans to stop the runaway train that is Obamanomics, and, second, that voters in 2010 and 2012 will realize that the man and the party they thought were wizards of competence are in fact quite the opposite. By 2010 we will be clinging to the edge of the cliff with one hand. It'll still be possible to pull ourselves back up to safety by undoing some of the president's reckless excesses. But if in the meantime either Cap and Trade or Obama's health care plan become law our children will grow up in a country very much poorer than the one in which our parents grew up.
RLC
