Recently a Los Angeles TV station announced that California lottery sales were down and efforts were afoot to boost this flagging source of state revenue--last year netting about a billion dollars.
That’s just the thing, I thought. Let’s tempt folks who can’t afford it to fork over more cash on the 15-million-to-one chance that their tickets will catapult them (and lift California) out of a deep recession.
Never mind that Californians overwhelmingly rejected Proposition 1C last year—with over two-thirds of San Diego and Riverside County voters saying no to expanding and borrowing against state-sponsored gaming enterprises. Apparently the geniuses in Sacramento still wish to find a way to up the lottery ante and increase the number of Golden State chumps.
On the other side of Easy Street are those who tout marijuana legalization as a significant economic boon to our debt-ridden state. This proposition, if passed, will at least have the advantage of dulling the senses of those who imagine that the road to governmental solvency is a one-way avenue that only requires a bit of chemical stimulus and legal flexibility—no downside scenarios permitted.
Such “budget solutions” are typical of the “anything painless” mentality that’s gotten California into a mess that lawmakers seem incapable of addressing realistically. Other versions of this mindset involve proposals to increase taxes on unpopular industries under the delusional assumption that one can have a continuous stream of golden goose eggs while strangling the fowl for dinner.
It never occurs to these folks that making an unfavorable business climate even more unfavorable isn’t a recipe for job creation--except for jobs in the burgeoning public sector.
Former House Speaker Newt Gingrich recently hosted a “jobs summit” in Irvine at which he offered various policy proposals: a two-year cut in payroll taxes, allowing small businesses to expense 100% of new equipment purchases, cutting the capital gains tax rate.
One might criticize these Washington-focused suggestions for exhibiting (from the other side of the political fence) the same “no pain” mentality demonstrated by last year’s massive $787 billion stimulus program. All gain and no pain.
Assuming that Gingrich’s pro-business proposals would be more effective than the President’s “Porkulus” approach, tax reductions of this magnitude would still need to be combined with serious budget cuts to avoid a fiscal train wreck.
Fortunately, California doesn’t have the authority to borrow and spend the state into prosperity—or rather, into oblivion. A truly pro-business, pro-jobs policy can’t simply be put on a gargantuan IOU and debited to future generations. It can only be implemented in conjunction with honest fiscal discipline.
Don’t bet on it.