August 16, 2003

How California Got $38 Billion in Debt.

For starters, Gray Davis overpaid by more than $40 billion for energy a couple of years ago:

During California’s so-called energy crisis, the governor dragged taxpayers into the power business. According to the San Francisco Chronicle, ” experts estimate that California paid about $40 billion too much for power in 2000 and 2001 as energy firms jacked up prices. Adding in the $10 billion of overcharges from the long-term contracts would bring the state’s tab for the energy crisis to $50 billion.”

A lot of that $50 billion is in long-term contracts, meaning California hasn’t even paid it yet. It’s just a liability on the balance sheet. I’d have to check with an accountant (any accountants reading this are welcome to add a comment), to ask, is this $50 billion all in addition to the $38 billion we’re already in debt?

And of course, there’s also this:

As a quid pro quo for campaign contributions from state employees, California employees such as fire fighters and police officers can now retire as early as age 50, with 90 percent of their salary among the most generous pensions anywhere.

...Despite the governor’s declared “freeze” in hiring, he added 44,000 people to the state payroll.

And this:

In the governor’s first four years in office, spending increased 36 percent far higher than the 5 percent annual increase in the state’s population and inflation.

The recall isn’t a circus. The recall is emergency life support.

The Democrats’ laboratory: The host organism dies

IN JUNE 2002 , the liberal American Prospect magazine was hailing California as a “laboratory” for Democratic policies. With “its Democratic governor, U.S. senators, state legislature and congressional delegation,” author Harold Meyerson gushed, “California is the only one of the nation’s 10 largest states that is uniformly under Democratic control.” In the Golden State, Meyerson said, “the next New Deal is in tryouts.”

...Strictly adhering to formula in California, as the private sector was bleeding jobs and money, Gov. Davis signed off on comically generous pensions for government workers. Government employees in the Golden State earn more than the private-sector workers who pay their salaries and that’s excluding the job security, health benefits and 90 percent pension plans that come with “Irish welfare,” as government jobs used to be called.

Economists refer to this backward ratio between public and private-sector salaries as “France.”

...And yet, Bill and Hillary Clinton and the rest of the Democratic Party think Gray Davis is doing a super job. Democrats have denounced the recall a genuine citizens’ revolt as a “circus.” According to recent polls, two out of three people in this overwhelmingly Democratic state want Davis out, and still the recall is being called a “Republican power grab.”

So now the question many in California are asking is, will Arnold fix it, or is he a Republican in name only?