When the political consultants get their focus groups and test the slogans that will guide political policy in California, the one that comes out near the top all the time is "living within our means." That’s why Gov. Arnold Schwarzenegger used the line (as many of his predecessors have done) to try to make his brutal, bloody budget cuts sound eminently reasonable. The hardworking taxpayers of this state have to live within their means, right? They can’t spend more money than they have. So when the state comes up short, the governor and the legislature just have to do what’s necessary to make payment due balance with accounts received.
But it’s a misleading metaphor.
Imagine you’re working at a full-time job, just barely managing to cover the bills, and all of a sudden, through no fault of your own, your boss decides to cut your pay by 15 percent. Life wasn’t exactly easy before; now it really sucks. Now the essentials are at risk — you can’t pay the rent and put food on the table and buy clothes for your kids without going into debt. And sure, you can borrow for a while and run up the credit cards, but it won’t work in the long term and will wind up costing you a lot more.
And your boss smiles and tells you to live within your means.
This is what’s happened to California. The people who operate the public services (schools, parks, hospitals, etc.) that we all depend on just saw their income cut radically. The state already tried borrowing, but the interest alone is going to cost $2 billion this year; California, like so many Californians, is having trouble with its debt load.
So what would your typical breadwinner try to do? Well, he or she would complain about the pay cut and fight to get that money back, look for another job, possibly moonlight…. In other words, those hardworking taxpayers would try hard to find a revenue-side solution. For the state, that means raising taxes. Focus-group that one, Mr. Governor.