Fiscal Incompetence

Today's Fresh Air featured a thoughtful and amusing take on the current financial crises facing banking giants and the economy as a whole. I highly recommend a listen.

Have I mentioned how frustrated I am by the fact that California does not yet have an approved state budget? The tenth largest economy in the world is over 2 months overdue on figuring out how to pay the bills for the next year! Argh.

And the United States deficit continues to grow. And we continue to import heaps of stupid (and some not so stupid) stuff and borrow money from foreign governments and exercise funky public reporting practices to ignore/avoid dealing with this growing problem. All the while infrastructure crumbles, imbalances in wealth increase, and we focus our attentions on how potential Presidents/Vice Presidents promise the moon without thinking about who else is not only useful but required in lassoing it. Double argh.

UPDATE
Lots of people blame California budget delays on the fact that the state (namely, its voters) requires a two-thirds majority in the legislature to pass each year's budget. Others get frustrated with career politicians who can't seem to think outside the box (or their district). I agree that these are part of the difficulty. But a much bigger portion of blame goes to the voters of the Golden State who continue to pass boneheaded (or well intentioned but ill conceived) ballot initiatives that tie the legislature's hands when it comes to how the budget is divvied up. See Comment section for more grievance-airing on this subject.

I've mentioned previously my love of letters to the editor. Today's San Jose Mercury News had a bunch of good examples to keep my love affair going. And one just happens to make a perfect addition to this blog posting. The following is San Jose reader Chris Bencher's (tongue-in-cheek) take on how California can get out of its financial messes just like big financial firms do:

Maybe feds can bail out California
How about this? Let California take extra withholdings from our paychecks, which will be settled up when we do our income taxes next year. It's effectively an "interest-free loan" to the government. Then, if California does not pay us back by April 15, 2009, we impose a 12 percent interest rate. Then we'll call this a "sub-prime" loan from the people to the state.

Then, the people can have the option to sell those sub-prime loans to companies like Freddie Mac and Lehman Brothers. The federal government will bail them out when Californai defaults, and voila! We just passed the California budget problem to a federal budget problem. A perfect solution.

By the way, the paycheck withholding part of the above deal is attached to the actual proposed budget for California. The legislature proposes the state withhold $1.6 billion this year from state worker paychecks, thereby giving the state coffers a $1.6 billion influx of cash. Then California would refund the full amount next year in state tax returns. All I'll say in response is, please go listen to Michael Greenberger's observations about shady financing (yesterday's Fresh Air).

UPDATE #2
Check out David's take on the government bailouts of financial firms. You go, David.

UPDATE #3
The credit crunch and California's slow movement to a budget have converged. Now the state is asking the US government for a $7 billion loan because its usual source of short term loans has dried up with the credit crisis (read the NY Times story). As if our existing bond-debt and fiscal short sightedness weren't sufficiently burdensome. ACKK!!!