THE TRUE MEANING OF THE CALIFORNIA RECALL:
EXCESSIVE GOVERNMENT SPENDING, RISING PUBLIC DEBT,
FISCAL IRRESPONSIBILITY, & THE TAXPAYERS' REVOLT
By Alan Caruba
In a recent issue of The American Enterprise, Kevin Hassett analyzed why California, Connecticut, New Jersey, New York, Oregon, Massachusetts, Minnesota, Wisconsin, Maine, and Delaware are mired in debt, and the answer is Democratic Party control of their state legislatures and governorships. Democratic Party control accounted for fully 70% of these and other states' deficits. In each of the top ten debtor states, tax reve- nues had increased 5% over the past decade, but spending grew even faster! Compare citizens in these debtor states, whose average tax was $2,445 per person, with those in states that are fiscally Conservative. The average tax in the fiscally Conservative states was only $1,923 per person.
The bad news is that, under President George W. Bush, spending at the federal level has increased on just about everything. "Three of the five biggest increases in federal spending in U.S. history occurred during President Bush's first three years in office," notes Hassett. "This spending surge can't simply be written off to the war on terror." It is too soon to say if this will cost him re-election, but clearly Americans are fed up with this out-of-control spending and California is sending a message. Stop it! Stop it now!
Let's take a quick look at the situation regarding jobs and our national debt.
I keep hearing that all the jobs are disappearing. Some surely are. All new technology replaces old technology. This happened to the agricultural sector between 1850 and 1950. Today's version is not obsolescence; it is transference, as corporations elect to outsource often highly technical jobs to India, Russia, and elsewhere because it costs less. Another important factor is the way new technology enables those who make things to do so faster, at less cost, and with fewer workers.
There's another factor, and it's the huge wave of Mexican immigration into California and elsewhere in America. It has insured that crops get picked, lawns get mowed, and hotel beds get made. This is an off-the-books economy that is sending billions to Mexico. The constant flow of millions of immigrants, mostly illegal, has insured that Americans will no longer do these jobs. Since this nation essentially stopped trying to count immi- grants in the late 1950s, we have no idea how to find and induce these illegal aliens to become citizens. Why should they? They are a drain on the economy, as they access medical care and our educational system, courtesy of taxpayers. Does any of this make sense? Ask a Californian.
The figures cited regarding disappearing jobs are based on the Establishment Survey taken by the U.S. Bureau of Labor Statistics, but it's just a poll of some 160,000 estab- lishments and government agencies that tell the BLS how many are on their payrolls. Never mind that the countless new, smaller establishments are left out or that some of these employ- ees are moonlighting with second jobs. Then there's the Household Sur- vey, and this one says that job growth is soaring. It says that 1.8 million new jobs have been added to the economy since 2000, thus diverging by 2.6 million jobs from the other one that says we've lost jobs.
By comparing the two, you arrive at the statistical conclusion that job growth or loss is flat. As always, statistics, depending on who is announcing them on any given day, simply cannot be taken at face value. That said, it is surely good news to hear that 57,000 new jobs have been added to U.S. payrolls since January. Today's unemployment of 6.1% is the same it was in 1994, 1987 and 1978. It does not portend a new depression, given the annual economic growth of 4% or more.
And this may account for the fact that real people are spending real money on consumer goods, the housing market remains strong, and even big ticket items like automobiles are doing well. In a consumer economy, there will always be good cycles and bad cycles.
One thing, however, bodes ill. Our national debt is spinning out of control, despite or be- cause of the budgetary hocus pocus being practiced by Congress, the Treasury, and other agencies and departments responsible for this nation's economic stability and growth. The federal debt currently stands at $6.7 trillion. The unfunded liabilities in the system exceed $44 trillion. The daily increase in the national debt is $1.72 billion. You don't have to be a mathematician to figure out that, sooner or later, something very bad is headed our way.
While, as noted, ours is a consumer-driven economy, we all also now live in a virtual "welfare" society crafted by Democrats. The government takes our earnings before they can be spent, invested or saved, then sends us a check when we reach age 65. Through Medicare, the government controls the health care system. Meanwhile, the Democrats continue to call for more taxes for the "rich," a term that now includes many two-salary middle class families, and the Census Bureau has just announced that the number of "poor" has increased, as household income has declined. When you regulate every aspect of the economy, you increase costs. Is anyone surprised by this? You do not have to be an economist to know that most people are struggling to pay bills each month. Many carry large credit card debt.
When this nation was founded, the intent was to insure a small central, or national, gov- ernment with most of the power reserved to the member-states of the federal union. The Founders did not conceive of an income tax, a central bank, a huge permanent govern- ment bureaucracy, or a Congress composed of professional politicians who routinely tap billions of public money to fund pet projects designed to get them reelected.
The voters are beginning to demand fiscal responsibility. Let's hope it is not too late.
More on Taxation & Government Spending
Alan Caruba is a veteran business and science writer, a Public Relations Counselor, Communications Director of the American Policy Center, and Founder of the National Anxiety Center, a clearinghouse for information about media-driven scare campaigns. Caruba writes a weekly column, "Warning Signs," posted on the Internet website of the National Anxiety Center (www.anxietycenter.com). A compilation of his past columns, entitled Warning Signs, is published by Merril Press. In addition to Warning Signs, Caruba is the author of A Pocket Guide to Militant Islam and The United Nations vs. the United States, both of which are available from the National Anxiety Center, 9 Brookside Road, Maplewood, New Jersey, 07040.
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