Paul Krugman begins his commentary today in an article titled “California in Surplus” by saying that, “As best I understand it, what’s going on in CA is a microcosm … of what’s going on at the national level.” This illustrates that, as usual, Paul Krugman doesn’t know what’s going on; or if he does know what’s going on he doesn’t understand it.
Yes, California is projecting budget surplus in the next fiscal year. This is due in part to tax increases which utterly dwarf what Obama accomplished on the federal level, and to some rather unrealistically optimistic revenue projections. We’ll have to wait and see if these surpluses actually do materialize, and I’m rather suspecting that they won’t, at least not to the degree that they are forecast to do.
But more to the point, separating California’s putative recovery completely from what’s happing at the federal level and something which Krugman completely ignores, is that it’s largely the result of two years of ruthless and very painful cuts in state spending. These cuts have been across the board and have included safety net programs, social services, public safety, and state employee pay.
The federal government essentially has cut nothing, so to say that California is a “microcosm of the federal level” is the statement of an idiot.
Paul Krugman is an idiot. On. Many. Levels. California will be in a *projected* surplus - that doesn't mean it a done deal. And income projections always seem to be a bit off, yes? Because they are projected optimistically. And the budget is balanced because of severe cuts in the past years, none or few of which are being restored because of this tax increase. They are staying static, and not going more severe.
ReplyDeleteDon't forget, these tax increases are temporary - the rich mans tax expires in 4 years, the sales tax expires in 7 years. What happens then? More tax increases? Wait, it's not an increase unless it goes down first.
Brown might be out of office by then, so who knows. Some of the current legislature will be termed out. The Dems might have squandered their supermajority. The Rubs might get their shit together (not holding my breath on that one).
None of this is replicated on the national level.. Except for the stupid legislators, who have their heads up their asses. Or the donors asses.
Oh and on his other columns that are referenced in his post? The one that has the deficit essentially gone /taken care of /etc?
In a word, horseshit. Manipulating money, interest rates, percent of GDP, etc. DOES NOT MAKE IT GO AWAY.
If we take less of an interest in PK, does he go away?