Arnold Schwarzenegger Has a Brilliant Idea

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Our governor is proposing again to automatically reduce spending every time a state 
has a deficit and in good times to put money away for a rainy day.  This last part 
reminds me of the strategy of Jerry Brown, who put money away for a rainy day.  The 
Republicans, seeing money piling up in state coffers, argued that the savings was 
proof that the government to need the money.  Voilà, the infamous proposition 13.

As a result of the Brown precedent, I assume that the Schwarzenegger plan will 
effectively ratchet down government spending.  During bad times, you will get 
spending cuts.  During good times, you will get saving and then tax cuts, which will 
create budget deficits requiring less savings.  Grover Norquist would be proud that 
our governor would have turned to state into a bathtub, into which he could shrink 
the state.


-- 
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu
michaelperelman.wordpress.com