From Hot Air... This also was predictable, but it’s going to put the politicians in the population’s cross-sights. People in California have grown used to getting just about everything under the sun from their government in terms of services, and paying capped property taxes for it. The result is government that has been functionally bankrupt for a long, long time.
The White House had no choice but to refuse to help California out. If they had stepped in, any other state could have come to the trough, pleading poverty. It is time for politicians and citizens to recognize that there is no free lunch. If we want to make our personal and business tax structure competitive with other countries, we have to downsize government at all levels.
In this recession with nationalization of banks, car companies and who knows what else, we are heading in the wrong direction and economic theory would tell me that the bet Obama is making is not one that is going to succeed.
Why? Germany and Russia tried nationalizing lots of industries and we know how well that went. So did Britain with their automobile sector in the 1960s. China, until 1990 or so was a centrally planned economy with little individual decision making. So, continuing to bail out failing enterprises and governments with money the US government doesn’t have is a recipe for ongoing fiscal disaster.