Government Bubble

The end of the Clinton era saw the bursting of the dot com bubble. Rampant speculation drove tech stock prices to unsustainable levels, and what went up came crashing back down.

We just witnessed the housing bubble's big bang, with resulting downsizing of irresponsible lifestyles. There is talk of bulldozing entire vacant neighborhoods in some failed cities like Detroit.




Big Government Bubbles
Unfortunately, government gamblers who are incapable of learning anything continue to pump hot air into the increasingly unstable big government bubble.  President Obama, fresh from blowing trillions, brazenly says we are borrowing too much money from China, we're broke, and the irresponsible spending must stop. Oh, and he also wants to fund windmills and free health care for everybody.

California is Exhibit A
Paul Krugman can always be relied upon for liberal doses of economic advice.  Like practically all liberals, he stubbornly pins California's fiscal disaster to proposition 13, the conservative ballot measure that capped property taxes.

William Voegeli exposes Krugman's gross ignorance:

Property-tax revenues in the state have increased from $4.9 billion to $47 billion in the 30 years since Proposition 13. Adjust those figures for inflation and population growth, and property-tax revenues in California were 87 percent higher in 2009 than they were in 1979, chiefly because of rising property values.

Heedless of facts, Krugman goes a step further, predicting the same disaster for the US for the same reason: Those angry, stingy conservatives are blocking "responsible" tax increases that would pay for all this spending.

For Statist Progressives like Krugman, it's always too little taxation; never too much spending.

We all want something for nothing and the politicians are too cowardly to tell us no, so we end up with more government than we can afford.

China and the US are in a Mexican standoff: We can't stop irresponsible borrowing, they can't stop irresponsible lending, and the negative synergy has us on a mutual downward spiral.

Why doesn't it occur to anyone to downsize our overleveraged government?

California: Greece on the Pacific

Liberal love to blame Republican-backed Prop 13 for destroying California's tax base.  It's the number one talking point used to defend the failed liberal experiment known as California.

Only New York collects more taxes per capita than California
William Voegeli explains just how wrong these liberals are in his excellent article, Don't Blame Prop 13. 

Property-tax revenues in the state have increased from $4.9 billion to $47 billion in the 30 years since Proposition 13. Adjust those figures for inflation and population growth, and property-tax revenues in California were 87 percent higher in 2009 than they were in 1979, chiefly because of rising property values.

Census Bureau data show that California ranked tenth in the nation in 2007 in terms of per-capita receipts from all state and local taxes (property, income, sales, and excise taxes) paid by individuals and corporations.

Per-capita receipts from individual and corporate income taxes were 64 percent higher in California than they were in the rest of the country: $1,764 in California, $1,077 elsewhere. All told, California’s governments received $4,731 per resident from all taxes, 14 percent more than the $4,160 average outside California.

The problem isn't too little taxes, it's too much spending.  If taxation were the answer, New York and California would be booming right now and Texas would be bust.  Liberalism kills economies.