HorsesAss.Org

There are dueling editorials in Seattle’s two dailies today regarding the projected $3.2 billion revenue deficit facing budget writers in the next biennium.  And if you’ve ever wondered why it’s necessary to have two dailies, well, this is a great example.

The Seattle Times leads off by intentionally misinforming their readers:

AFTER the deficit in the next state budget increased by $529 million Thursday, Gov. Christine Gregoire called on her director of finance to suggest $200 million in immediate cuts. It was a good move, if late.

Yeah, thanks for the backhanded compliment Frank, but as I’ve previously explained, there is no state budget deficit.  You can call it a “budget deficit” if you want, but that doesn’t make it so, and technically, you are absoposilutely wrong.

Had current revenues during this current biennium fallen below budgeted expenditures, that would have constituted a budget deficit.  But they haven’t.  In fact, we are still generating a small surplus.  What the Times is referring to is a revenue forecast that would project a deficit in the next budget should spending continue to grow at its current rate, which it won’t, because the state is constitutionally prohibited from running deficits.

The governor blamed the shortfall on the disaster in Wall Street and, by implication, on the Bush administration. That was not altogether convincing.

You know what I don’t find all that convincing?  An editorial page that routinely misleads its readers… you know, like the time you guys lauded Sweden for repealing their estate tax, without bothering to mention that they replaced it with a 1.5% annual wealth tax.  Or, you know, like when you label a revenue forecast a “budget deficit” when you know that it isn’t.

Whatever the cause of the Wall Street crisis — and we think most of the blame is in the private sector — some kind of economic downturn would have happened eventually, and Gregoire’s budget was not ready for it.

And eventually, our Sun will exhaust its supply of hydrogen, swell up into a red giant, and swallow the earth.  But that doesn’t stop me from planting a garden.

The point is, the governor could have let state spending continue to shrink as a percentage of our economy, socking away a few billion dollars for a rainy day… though the last time we tried that, Tim Eyman used the surplus as ammunition to pass his tax-cutting I-695.  Or, we could spend the money when have it, and then not spend so much when we don’t.  The latter option makes writing the 2010-11 budget more difficult, but in the meanwhile, class sizes have been reduced and tens of thousands of children have been given access to health care.

The rest of the Times editorial is filled with self-righteous I told you so’s and meaningless blah-blah-blah’s.  So let’s move on to the Seattle P-I, which offers a more concise, accurate and thoughtful approach to the issue.

Oh man, McCain kicks Obama’s ass… at least when it comes to the number of cars he’s owns.  But, you know, 13 cars, that’s really not so many when you consider that it is barely more less than two cars per house.

PS:
Obama drives a hybrid.  That clearly makes him an out of touch elitist.

Let’s be absolutely clear about one thing:  there is no state budget deficit.  There never has been, and there never will be.  Washington’s constitution simply does not allow deficit spending, so whatever the revenue forecast is when it is time to write the next biennium budget, and whoever is governor at the time, the budget will be balanced.

But that didn’t stop Dino Rossi from going on the attack during last night’s debate:

Rossi wasted no time blasting Gregoire’s record, accusing her of recklessly spending the state into a record deficit and presiding over a rising state unemployment rate. He also made note of her recent TV attack ads, which he said misrepresent his position on stem-cell research.

“She’s trying to distract us from the issues that most people in the state are talking about,” he said at the debate sponsored by the Seattle P-I, KOMO4 and the League of Women Voters. “Issues like this $3.2 billion deficit that she has created and she’s going to raise your taxes to solve.”

Again, there is no budget deficit, and both candidates have promised to balance the budget without raising taxes.  As for rising state unemployment, we are in the midst of a national recession, yet Washington continues to buck the trend by actually adding jobs to the state’s payrolls:

Washington had an estimated net gain of 1,300 non-agricultural jobs in August.

The number of non-agricultural jobs in Washington in August 2008 was 41,800 higher than in August 2007, a 1.4 percent increase. Nationally, jobs declined by 0.21 percent over the past year.

That’s a lower job growth rate than we’ve been accustomed to in recent years, but the reason our unemployment rate keeps rising is that people continue to move here for our relatively robust economy compared to the rest of the nation.  Meanwhile, our farmers are enjoying ample harvests and the best commodity prices they seen in years.

So all this talk about a $3.2 billion deficit is really misleading, and the media’s tendency to fixate on this number without thoroughly explaining it plays right into Rossi’s hands.  It is a revenue forecast for 2010-2011, which currently falls $3.2 billion short of the revenue needed to maintain state spending at its current rate of growth.  And as I’ve explained in the past, state spending has remained at about six percent of the state economy for more than decade, its growth more or less pegged to our state economy’s rate of growth, as measured in total personal income.

As explained in the Gates Commission report, and numerous other scholarly works on the subject, the economic number that most closely tracks growth in demand for government services is growth in total personal income, that is, total economic growth.  This is because (and perhaps counter to popular misconceptions) the majority of state and local government services are commodities, and we tend to increase our consumption of commodities as our income grows.  Roads, sewers, schools, courts, public safety, public health… these and other government services are all things we consume more of the wealthier we become, and thus personal income, not population plus inflation, is the best measure for tracking growth in demand for these services.

You can argue with me on this if you want, and perhaps there are economists who can explain these concepts more clearly than me, but both academia and reality are on my side.

So any accusation of reckless spending on the part of Gov. Gregoire is simple hyperbole.  During the Gregoire administration state spending grew at roughly the same pace as our economy, while managing to put hundreds of millions of dollars aside in a rainy day fund.  And where did the bulk of her spending increases go?  On education, where she fully funded two statewide initiatives calling for reduced class size and greater teacher pay… that is, she met the voters’ express demand for expanded government service.

And on taxes, well, both candidates promise to balance the budget without raising taxes, and I see no reason to believe one more than other.  Rossi accuses Gregoire of raising taxes during her administration, and it is true that she did raise the gas tax and reinstate the estate tax… but both of these measures were subsequently and overwhelmingly approved by voters at the polls.  If the argument is that Gregoire gave voters what they wanted, that’s a criticism she shouldn’t be shy of embracing.

And really, find me a Democrat who expects Gregoire to sign a tax increase… I betcha can’t.  Hell if House Speaker Frank Chopp is going to risk his meticulously crafted majority by pushing through an unpopular sales tax increase, so that’s not going to happen, and neither would a B&O tax increase during an economic downturn.  And I can tell you first hand that we fair tax advocates have pretty much given up hope of Gregoire embracing a sensible repeal of even a small fraction of the billions of dollars a year in questionable tax exemptions handed out to businesses and other special interests over the past decade.

And if you think that somehow Gregoire is going to embrace an income tax… well… I’ve got an eight-lane 520 bridge to sell you.

So what it comes down to in the end is not who will balance our next budget but rather, what will be their priorities.  Do we want a governor who has made education and children’s health care their number one priority during their administration, or a governor who proudly claims a budget proposal that cut health insurance for 40,000 kids?  Do we want a budget balanced by a governor who has made cleaning up Puget Sound one of the centerpieces of her second term, or by a governor who doesn’t believe in global warming, and who voted 99% with the orca-killing BIAW?  Do we want a budget balanced by a governor who actually believes it is the government’s proper role to deliver the services voters want, or do we want it balanced by governor who fully embraces the failed anti-regulatory, anti-government policies of George W. Bush?

Rossi complains that Gregoire’s efforts to talk about actual issues is a distraction from the campaign, but it is his and the media’s obsessive focus a deficit that isn’t, that is the real distraction.  There is no budget deficit. That is a fact.

But, of course, when have effective political campaigns ever been about facts?

As expected, the Seattle Times editorial board has endorsed Barack Obama for President of the United States, paving the way for endorsements of Republicans Dino Rossi, Rob McKenna, Sam Reed, Allan Martin, Dave Reichert and Cathy McMorris Rodgers, all the while leaving their vaunted bipartisan principles intact.  At least, in their own minds.

In fact, with the possible exception of the race for Commissioner of Public Lands, I can’t imagine a single additional closely contested statewide or federal race in WA state in which the Times endorses a Democrat.

I’d be happy to be proven wrong.  But I wouldn’t bet on it.

I see that Congress will consider a major bail out of the financial institutions, possibly in the next week. While we don’t know all of the details yet, it will most likely involve the taxpayers taking on $700 billion of bad debt and getting little in return.

As Representatives who voted for the bankruptcy bill, it would be immoral of you to support such a bail out. After all, with that vote you showed no sympathy for guardsmen called up to Iraq – a war most of you supported – or Afghanistan at a pay lower than their civilian job not being able to pay the bills. And you had no sympathy for the parent of a child without health care -that many of you have done nothing to help them get – who had to put the bills on their credit card and then got overwhelmed. Now, to sympathize with huge corporations that made bad decisions would just be rank hypocracy in service of the very, very rich.

XXOO

Carl Ballard

With the Sonics in Oklahoma City, the Huskies 0-3, and the Angels’ Francisco Rodriguez having more saves than the Mariners have wins, the Seahawks losing to the awful Rams today would send this city to an all-time sports low.

Well, I guess the Storm are in the playoffs, although that just makes it all sadder somehow.

Local boy makes good.  See, this is how you give an interview.

Kitsap County Superior Court judge Anna M. Laurie found medical marijuana patient Robert Dalton guilty. Her reasoning was that his pain could have been relieved by other medicines, so therefore it’s perfectly fine to arrest him and seize his property because he was growing marijuana plants. As Dalton’s attorney Douglas Hiatt pointed out, Dalton’s opiates made him sick and are far more addictive than medical marijuana:

Hiatt was “very disappointed” with Laurie’s verdict, reiterating what he’d argued in court: that Laurie was “second guessing” physician Thomas Orvald, who recommended Robert Dalton use marijuana.

“If Judge Laurie wants to be a doctor, she should go to medical school,” Hiatt said. “No patient in this state is safe if she’s right.”

I’m not sure any patient in this state is safe anyway. Dalton is now disallowed from using the most effective medicine for his pain while he hopes to have a potential jail sentence postponed while he waits for an appeal. In the meantime, Washington state taxpayers continue to pay to prosecute someone who can’t possibly be considered a danger to society by any stretch of the imagination.

Look carefully drivers, for more of the handiwork of the Freewayblogger.

Also writing on the Huffington Post, US Sen. Bernie Sanders (I-VT) offers his own take on our financial crisis and the federal government’s reaction to it:

This is the most extreme example that I can recall of socialism for the rich and free enterprise for the poor.

And when it comes to socialism, Sanders knows what he’s talking about, being the former socialist mayor of Burlington Vermont.

But Sanders offers more than just criticism, and doesn’t outright dismiss the notion of some sort of financial market bailout.   Sanders notes that it is the wealthiest Americans who have prospered most from our recent anti-regulatory policies, while middle class Americans have seen their incomes steadily decline.  And since it is the wealthiest Americans who benefit most directly from a huge government bailout—and are most able to afford pay for it—a large portion of the cost of the bailout should fall directly on their shoulders.

Specifically, to pay for the bailout, which is estimated to cost up to $1 trillion, the government should:

a) Impose a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers. That would raise more than $300 billion in revenue;

b) Ensure that assets purchased from banks are realistically discounted so companies are not rewarded for their risky behavior and taxpayers can recover the amount they paid for them; and

c) Require that taxpayers receive equity stakes in the bailed-out companies so that the assumption of risk is rewarded when companies’ stock goes up.

Honestly… tell me… are these three concrete proposals any more “socialist” than our rush to nationalize troubled Wall Street firms?  In fact, I’d guess that the majority of Americans would find these proposals fair, reasonable and common sensical.

In addition to the principle that bailout should be paid for by those who benefited most from the policies that created the crisis, and who can thus afford to pay the costs, Sanders puts forth three other principles that should be seriously debated in discussing any bailout plan:

(2) There must be a major economic recovery package which puts Americans to work at decent wages. Among many other areas, we can create millions of jobs rebuilding our crumbling infrastructure and moving our country from fossil fuels to energy efficiency and sustainable energy…

(3) Legislation must be passed which undoes the damage caused by excessive de-regulation. That means reinstalling the regulatory firewalls that were ripped down in 1999…

(4) We must end the danger posed by companies that are “too big too fail,” that is, companies whose failure would cause systemic harm to the U.S. economy. If a company is too big to fail, it is too big to exist…

Again, reasonable proposals all, that deserve serious discussion as we rush to write Wall Street that giant blank check.  Sanders is not arguing against a bailout, but rather against a bailout that doesn’t have conditions attached that the protect the interests of US taxpayers, help working families struggle through the resulting economic slowdown, and takes concrete steps toward preventing a similar crisis from happening again.

Huh.  That doesn’t sound all that radical, now does it?  So as long as our two major parties are embracing the principles of socialism, shouldn’t we at least listen to the advice of a real socialist?

More Pastor Problems?

(Who needs Saturday morning cartoons when there are some 70+ media clips from the past weeks in politics at Hominid Views.)

The podcast starts off with a Democrat-on-Democrat story, as Goldy and his panel discuss politics and campaigning with Washington 11th CD Senate candidate Juan Martinez in his contest against Sen. Margarita Prentice. The topic turns to initiatives. Will increased traffic congestion and elevated gas prices encourage voters to vote YES on Proposition 1? How is Lyin’ Eyman’s Traffic Congestion Initiative doing? Speaking of him, what can be done to repair the initiative process? Oh…and why does the American Chemistry Council hate Seattle? All this and so much more….

Goldy was joined by Seattle P-I columnist Joel Connelly, Alex Fryer, the communications director for Mass Transit Now!, State Senate Candidate Juan Martinez, initiative specialist Laura McClintock of McClintock Consulting, and Lynn Allen of Evergreen Politics.

The show is 55:00 and is available here as an MP3:

[audio:http://www.podcastingliberally.com/podcasts/podcasting_liberally_sep_16_2008.mp3]

[Recorded live at the Seattle chapter of Drinking Liberally. Special thanks to Confab creators Gavin and Richard for hosting Podcasting Liberally.]