I live and pay taxes in California. And when I read Governor Schwarzenegger’s “threats” today, about the consequences of the federal government’s not bailing out the state by $8 billion, my immediate reaction was “No bail-out! Carry out the threats!”
The Governator’s threats are to cut funding to the state welfare program and in-home health services, and to push for a resumption of offshore drilling to raise new revenue. The state’s welfare policies are extremely counterproductive: in combined state and federal subsidies, beneficiaries can receive over $1,500 a month–more if they have dependents–plus food stamps, free medical care, and low-income housing, which are enough to live on pretty well in many parts of the state. The ease with which day laborers can earn undeclared cash income, moreover, means many families have substantially more than their welfare subsidies to live on. California benefits give native Californians the option of lifetime dependency, but they do worse than that: they attract millions of welfare aspirants from elsewhere.
Earlier this year I received this communication from an unusually knowledgeable reader. It’s a dollar-by-dollar description of the welfare benefits available to people in California, and of how the residents of a north-coastal county consequently live, in a census area where only 6 out of 256 people actually have paying jobs. This is a broken, unsustainable system. By far the best thing that could happen to California is for this system to fail, and to have to be reconstituted under much different procedures. The burden of it, as a major element of state spending, makes it a Sisyphean task under the best of economic conditions for new businesses to establish themselves, and for working families to stay in or enter the middle class.
Offshore drilling, meanwhile, is something California should never have stopped doing. The state could also realize healthy revenues, as well as jobs and cheaper fuel for residents, by retooling its existing refineries. Efforts to do so, however, have been stalled by environmentalist lawsuits and, in some cases, by California senators. The nation as a whole, we should note, would also benefit from a resumption of drilling and a more robust oil-production profile in the Golden State.
Welfarism, economically destructive taxation and regulation, irresponsible environmentalism: California’s fiscal wounds are all self-inflicted. An $8 billion bail-out from Washington would only enable the state to stagger about dementedly for a bit longer, still holding a knife plunged between its ribs. This is what the therapists call a dysfunctional situation, and it needs intervention, not enabling. Don’t do it, Washington. Don’t do it.
