Well, I guess even if the bond doesn't fail...This is more or less an open question...What would you do about the "accumulated deficit?" I see three general possibilities. (A) have a bond, (don't like that with the wimpy spending limit.) (B) Cut Spending another $10 billion (as it works out) for one year, or (C) Have a single year increase in the VLF to the "old" value, a 1/2 cent increase in the sales tax for one year, and approx. an additional $4 billion in cuts to services. A, B, and C are guaranteed 1 year 1 time occurances, although a new bond could come about next year. Note that B and C have no bond. There is also a D, but I don't mention it, because I sure as heck hope that doesn't happen. My own impression is that B or C would probably be acceptable, C less so, but in the event the bond fails it might be workable, but I'm curious as to the impression of others especially fellow Republicans if we end up in an $10 billion deeper hole.
Posted by Joel at January 16, 2004 05:25 AM | TrackBackThe main problem with B and C are how do you guarantee they are one time? The additional problem with B is what longterm effects do we have from the spending cuts. IMO, spending cuts end up being political bouncing balls and the spenders (not always Democrats!) love to cut critical stuff so we can all freak out and then agree to let them spend freely in the future.
Posted by: Justene at January 16, 2004 08:56 AM (Permalink)The main problem with B and C are how do you guarantee they are one time? The additional problem with B is what longterm effects do we have from the spending cuts. IMO, spending cuts end up being political bouncing balls and the spenders (not always Democrats!) love to cut critical stuff so we can all freak out and then agree to let them spend freely in the future.
Posted by: Justene at January 16, 2004 08:56 AM (Permalink)The $15 billion bond covers over a one-time debt, the increases or cuts, could be written to absolutely sunset at the beginning of the next fiscal year, unless reenacted by the requisite 2/3rds.
The cutting critical stuff first is especially common on the local level. And I agree with you about that, but until you get a majority of Rs up in Sacto it will be tough to get the legislature to cut non-critical spending.
well, i guess B. But really, I would like it best if it were dealt with by massive cuts. I don't think anything will change without some acute trauma. I realize this won't happen, but that's what I'd like.
Posted by: jason at January 16, 2004 07:26 PM (Permalink)The bond is mostly to cover this year's debt. By March, the year is almost over, so there's no way to cut spending anymore.
If the bond fails, there just aren't any choices. The money has already been spent, which means we either default or raise taxes.
Posted by: Kevin Drum at January 17, 2004 04:50 PM (Permalink)