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Archive for February, 2009

Feb 27 2009

President Obama and economics

Published by nwunderlich under Federal Issues Edit This

President Obama presented his budget.

His budget includes pots of money set aside for universal health care, a sky-rocketing deficit and money for social programs.

It does not include any of the cuts that he has promised.

His commitment to reducing the deficit to half by the end of his first term will be easy - especially when you consider the size the deficit will be after his first six months. If this budget is enacted, the deficit will skyrocket, so bringing it down should be no problem at all.

Why is there a deficit at all in his budget? President Obama claims to want to work with Republicans and be fiscally responsible. That would involve spending only what the government takes in - not deficit spending.

Sometimes, in times of fiscal struggles, programs have to be put on hold. This includes dreams of education and healthcare reform. I am all for reforming these areas. There are lost of programs that do not work in education and healthcare. That doesn’t mean you need to raise the deficit in order to fix the problems.

What you need to do is eliminate the programs that don’t work. Then spend that money on new programs designed to work and solve the problems our healthcare and education system have.

Deficit spending is not the way to go. What it does is pass the debt onto the next generation and cause higher taxes on people who make money in order to support those who do not or will not take care of themselves.

It is time to put Republican ideals back at the forefront of the nation. The ideas of balancing the budget and taking care of yourself need to be brought back to the table and spoken of to all.

The American Dream isn’t that you are handed life and money by the government, it is that you are able to succeed based on your merits and abilities and hard work. That dream will never be realized with President Obama. Instead, those poeple who work hard are going to get penalized with more taxes to pay for those who do not.

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2 responses so far

Feb 25 2009

Legalizing pot

One of the newest battles this year (although it has been around for many years) is whether to legalize, and therefore tax, pot sales.

Not stainless steel pots, but rather pot - marijuana.

There are a lot of prisoners in jail for selling pot. If pot was leagalized, the state wouldn’t be sending those people to prison anymore either.

The argument goes like this: California decriminalized pot use and posession for individual use (with the note of a doctor) many years ago. It would save California money because many people wouldn’t be in prison. It would raise money because it could be taxed. Marijuana is no worse than alcohol and cigarettes. Therefore, legalizing marijuana is a good thing and it should be done.

The opposite argument is: marijuana is a drug, it is a gateway drug, it leads to worse things that cigarettes and alcohol so it should stay a banned substance. Of course, it is also a banned substance at the federal level - which is the level that gets to decide what is a banned substance and what is not. Therefore, marijuana should stay banned.

People aren’t going to go buy marijuana and pay taxes on it. There will be a huge underground and black market economy. All this will do is create another set of crimes - driving while under the influence etc.

And does this mean that people can come to work high? People can smoke cigarettes at work and drink at work. Are people going to be able to smoke pot wherever they want - like at parks and ball games? Or will smoking pot be the same as smoking cigarettes. I don’t want to walk down a street and smell pot; most people don’t.

This will never work. Marijuana is a banned substance. Let’s keep it that way. It was banned for a reason - and those reasons haven’t changed.

18 responses so far

Feb 24 2009

Removing categorical spending for schools

California school districts are going to get a lot more flexibility when it comes to spending the money they recieve from the state.

There used to be all these “categorical” programs - buying textbooks, training principals, training teachers, gifted students, technology improvements, tutoring for the high school exit exam and arts and music. The budget deal that was just signed removed many of these categoricals and lumped them into one big pot - at least for the next five years.

Categorical spending started in the 1960’s when it became the “it” thing to do for politicians to show they were spending money on the disadvantaged students, or the poorer school districts. Using categoricals then took off over the next few years. Money was designated to train principals, and that money couldn’t be used for anything else - even if the principal already had the training.

The budget plan takes 42 categoricals and lumps them in one pot, and then trims approximately 15% from that lump sum of money.

The goal of this is to allow school districts more flexibility on where to spend money, this way they can stop some of the financial pain from happening with the other budget cuts.

It also allows flexibility for the school district to fund what its students need: On the off chance that the needs of the students in Lake Tahoe are different from the needs in Crenshaw Heights.

This is a good thing. It gives more controls to the locals. Parents are worried their gifted child might not get as mch attention or as many “extras.” That’s ok - sometimes parents have to step in and make education meaninful. If this flexibility means that more kids will graduate from school, or simply go to school, and learn reading and writing - this is a good thing.

The local areas have different needs and categoricals didn’t allow for the flexibilty that school districts needed to meet those varied and changing needs. Now they have some of that flexibilty.

Now comes the time of reckoning as well - since there is the flexibility, there should be the expected results.

No responses yet

Feb 23 2009

Preliminary allocation of state stimulus funds

Here is the preliminary allocation of state stimulus funds from the federal stimulus package.

It is not a good idea to spend money that you don’t have; whether you are a state, local or federal government or a family - spending money you don’t have is a bad idea.

However, when you are in debt you take what income you can get - and if the federal government wants to give California money, we should take it and be good stewards with the money. The government should show the people that in return for being bailed out by our tax dollars, they are doing something good with the money.

Here is the preliminary breakdown of funds for California:

Californai is getting $5.96 billion for fiscal stabilization. Of that money, $4.87 billion is targeted for education and the rest for “general purposes.” There is also $2.56 billion for highways and bridges.

In total, California is receiving over $26 billion in stimulus funds. Some of the money is spread out unti l2010-11 for expenses regarding Medicare. A lot of the money is tied to various programs. Some programs - such as unemployment -would require changes of law before the money oculd be recieved.

For more information on the stimulus plan, you can visit www.recovery.gov - which is the government’s website so that taxpayers can see where the money is going.

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Feb 20 2009

106 Days and We Finally Have A Solution

Published by nwunderlich under Uncategorized Edit This

It has been 106 days since the Special Session was called to deal with the budget deficit. There is finally a solution.

Early yesterday morning the Senate passed the budget package, and the Assembly passed it swiftly thereafter. The Governor signs the bill later today, and then it becomes law.

It isn’t the best package - it relies on almost $11 billion in borrowing - or hoping that federal money will be given to the state. There is no way that this state will be able to sell bonds and borrow - no one wants to lend us any money. Let us hope the federal government comes through with some money.

There are also a series of reforms in the package - most of which have to go to the ballot box. One of the reforms is a “hard” psending cap. All it means is that California’s spending will be idnexed for growth and inflation and the state cannot spend more than that. Anything extra goes to a rainy day fund to prevent more years like this year. If there is still extra money, then it can be used for one time costs or reductions in taxes - not on-going ones. This is a big reform. Republicans can sit back and declare that they won with this reform. And now they need to push for it at the ballot box.

Other things going to the ballot box are an open primary system (which isn’t a bad thing, more to come on that later) and changes to various propositions that will allow for more flexibility for the state in using variosu revenue streams.

The big thing to come out of this package, besides new taxes and fees, is the reform. It is a good thing, and something to be proud of.

That it took so long to do should make the Legislature ashamed.

Any bets on how long this package stays solvent? It should last through the end of today. But even with the reforms, the Legislature is famous for passing budgets, and getting governors to sign them, that unbalance by the end of the day. Let’s hope that’s not the case.

2 responses so far

Feb 19 2009

The California Legislature Passed A Budget Solution

State senators approved a deal to close the state’s $40+ billion budget deficit this morning after agreeing to give Sen. Abel Maldonado(R-Santa Maria) most of the changes he demanded in exchange for providing the crucial 27th vote.

Here is some of what Sen. Maldonado got in return for his vote (turns out quid pro quo isn’t dead yet):

• A constitutional amendment establishing an open primary system. The measure will place on the June 2010 ballot an open primary proposal affecting congressional and state races in 2012 and beyond. This isn’t necessarily a bad thing. It will create more of a “moderate” legislature, instead of the ideologs we have now. However, there are not provisions that the Democrats - and Republicans - have to support it. He should’ve gotten those.

Under the plan, the top two candidates in a primary would face off in a general election. Candidates would not participate in partisan primaries, but they would be able to retain their party labels on the ballot.

• A constitutional amendment banning legislative pay increases during deficit years. This measure is intended for a May 19 special election ballot, along with measures to make changes to the California lottery and establish a “rainy day” fund. Finally, someone with some sense about what motivates the legislators and making them pay too - not just their staff and other state workers.

Legislative leaders rejected Maldonado’s proposal to eliminate legislative pay altogether when the budget is late, arguing the idea was unconstitutional. This was a no-brainer. It should be passed. It would only be unconstitutional if a court ruled it was - and that would only happen in someone affected by the law (a legislator) brought it before the court. They didn’t want this. Which is too bad - because it is a good idea.

• Elimination of the 12-cent additional gas tax, which was estimated to bring in $2.1 billion through June 2010. The money will be replaced with a 0.25 percent increase in the state income tax, federal stimulus dollars and more than $600 million in line-item vetoes. Let’s plan on federal stimulus dollars. It is always a good idea to plan on your parents bailing you out of a  bad situation - or not. So let’s plan on that. It is a ridiculous idea.

What happens when California doesn’t get federal money?

The changes are headed to the Assembly, where members were waiting for the Senate to finish up before sending the package to Schwarzenegger.

And after it is signed, it will be out of balance in 20 minutes.

No responses yet

Feb 17 2009

Federal Money For California Unemployment

California’s unemployment fund ran out of money earlier this year and had to borrow from the federal government. Many more people are unemployment right now than have ever been before, and still more are trying to file and cannot get through the call center or computern system.

If you believe in unemployment, you believe that the government should help out people in tough times. Unemployment was created to help people in the few weeks it took to find a new job, not the few months or years people are using it for now. So of course the fund ran out of money.

The federal government wants to give Californai $60 million to upgrade the call center and computers used to process applications - no strings attached. When the federal government is giving money away, of course the state is going to take it.

But then there is the additional money. It has strings attached.

In order to get the money, the state would have to change the law to allow people to earn $200/week without their unemployment benefits getting reduced instead of the current $25/week limit. The state would also have to change the law to allow for the most recent wage to be used, not the current process of the average of the past 4 quarters.

Business fear this means they will have to pay more, since unemployment is going to be paid at a higher rate. And they will have to be paid more.

If the changes in the law get made, they should sunsent when the federal money runs out. That isn’t the way things work in California. Instead the law will remain changed, even when the money runs out, forcing business to pay more.

Businesses employ workers. Changing the amount it costs for a business to hire, or keep someone on staff, doesn’t make sense when you need businesses to hire people in order to end the recession. If you want people hired, you have to make it cheap and easy enough to hire them. This proposition doesn’t do that.

Besides, it is offensive that someone would be able to make $625/week ($200 + $425 payment) and be considered “unemployed.” That is a lower income person, but that person isn’t unemployed.

No responses yet

Feb 16 2009

No Deal, Or End In Sight, For A California Budget Deal

Published by nwunderlich under Uncategorized Edit This

There was a floor vote in the Senate on Saturday to pass a budget deal. They were one Republican vote short.

The Governor went from door to door, trying to get a Republican to vote yes on the budget deal. He had no influence. He has no influence with Republican legislators. The Governor has repeatedly failed to work with Republicans on anything, and is openly defiant of Republican values on many issues. It comes as no surprise that he cannot help with the situation and get a Republican vote.

In order to get Democrats to vote for the budget, Sen. Maldonado in particular, the budget deal had to include money for his major counties - more pork in a year where there should be none.

This is a hard budget year. The members of the California Assembly and Senate are running scared from the prospect of really doing anything. They had an opportunity this year, and won’t have the same opportunity for a while, of really working on the issues. But instead they are doing a mix of cuts, tax hikes and borrowing - just like every other year.

Regardless of what the solution it, California needs and deserves to have its Legislature pass a solution.

It is no surprise the Senate Republican leader won’t get a vote for the budget. He doesn’t want to put his people in a bad position - that of voting to raise taxes.

The Assembly cannot work on the bills. The Senate let it be known that the bills had to be considered by their members first, and the Assembly could go second. It won’t be a problem to get the votes with the Assembly Republicans because their leader, Villines, is much stronger and protective of his members. Who ever votes for the deal in the Assembly won’t be hung out to dry by their leader.

No responses yet

Feb 15 2009

Parenting and Education

When did it become the responsibility of the the schools, state and teachers to educate your child?

Throughout the budget negotiations there have been outcries from the education coalitions about where the money is going - or not going. Parents have said that the schools don’t do a good job and need more funding.

Well, parents, it is time to step up.

When you made the decision to have a child you took on certain responsibilties. If you made the decision to engage in behavior that might lead to a child, you knowingly took on that chance and the attendant responsibilities.

One of those responsibilities it teaching your child. I remember my mother teaching me to read. I could read when I went to school. I could do math. And my mother was a full-time working lawyer. She still found the time to educate me and help me learn.

Why are parents abdicating this responsibility?

As a parent you must be involved. Teaching your child to read should be fun. You take a Dr. Seuss book and read it together, you enjoy the book. It isn’t hard. It takes time, but so does everything worthwhile.

If every parent took on the responsibility of their child’s education, the schools would be better. I am not saying that the child should be home schooled, I am saying that parents have a responsibility when it comes to education. It is not the sole responsibility of the school and state.

This is true for school subjects and education about proper behavior and responsibility.

It isn’t the school’s job to teach these things. The school is there to help the parents.

Parents - step up. It will be better for everyone in the long run.

3 responses so far

Feb 14 2009

Borrowing When You Have No Credit.

Has anyone tried to get a mortgage or credit line lately? To get a mortgage you have to have 15%-20% down, a perfect credit rating and a steady job. For a line of credit, you have to have perfect credit.

California thinks it can borrow its way out of part of the budget problem while having none of these things.

California has the worst credit rating possible for a state. There is not a steady stream of income, in fact the income stream is going down. The state certainly doesn’t have any money in savings that could act as a buffer or “down payment” type of assurance.

Regardless, the state believes it can borrow almost 25% of the total needed to balance the $40+ billion deficit.

This is criminal. The fact that anyone would vote for this is criminal. Borrowing is not a solution, it is simply pushing the issue to someone else. Someone else is going to have to deal with the situation when California hits its constitutional debt limit and cannot borrow anymore, or bond-fund projects (which count against the debt limit).

The credit cards have run out of room. Anything that is done on credit is going to cost our children, and ourselves in later years, much more in dollars than any other solution. Any borrowing done will be over the limit borrowing and needs to be stopped.

What the legislators are doing is criminal. They are violating the trust their constituents placed in them to act rationally and in the best interest of the voters.

Borrowing to fund a deficit caused by borrowing is a bad idea.

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