FLASHREPORT

IT'S TIME TO WAKE LIBERALS FROM THEIR DREAM WORLDS

State Senator George Runner

[Publisher's Note:  As part of an ongoing effort to bring original, thoughtful commentary to you here at the FlashReport, I am pleased to present this column from State Senator George Runner -- Flash.]

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When fiscal conservatives talk about California’s government “living within our means,” they aren’t just dropping a quotable sound bite; they are espousing economic gospel according to logical and realistic thinking. They are telling the truth – the truth if we are to believe that money is in limited supply and therefore budgets must be balanced.
 
But liberals are kicking logic and reality to the curb in favor of promoting the idea that money grows on trees, deficit spending is the way to run a state budget and living within our means is nothing more than a slogan, as Santa Rosa Assemblywoman Noreen Evans stated recently in a newspaper opinion piece.
 
She and her co-conspirators of deficit spending must live in dream worlds inspired by economists like Neil Buchanan and John Maynard Keynes, who encourage deficit spending during recessions. But if the state is to heal from its current fiscal sickness we must awake the liberals from their golden slumbers and bring them back to reality.
 
That reality includes California’s 11.6 % unemployment (the likes not seen since the Great Depression), which could top 13 % by the end of this year, said economist Eduardo Martinez of Moody’s Economy.com.
 
California’s business climate has recently been panned as one of the worst places to do business by the U.S. Chamber of Commerce, and is the worst in which to own a small business, according to the Small Business & Entrepreneurship Council in Washington D.C. These statistics are particularly abominable when you consider that half of California workers are employed by small businesses.
 
Furthermore, California taxpayers pay the highest state taxes on a per capita basis among the eight largest states in the country says the U.S. Census Bureau.

That’s why liberals who follow the philosophy of Buchanan and Keynes, are ignorant of the fact that ruunning structural deficits mortagages future money to pay for today.
 
To make matters worse, structural deficits devalue the dollar and increase the amount of money people must pay for essential items while pushing up unemployment and shutting down business activity. Inflation as a result of a growing deficit would only intensify today’s economic pain.
 
I agree that California should invest in long-term projects to enhance future growth and improve government services, but we should do so without running a dangerous deficit. We can increase the quality of state services and quality of life without forcing our children – and their children – to foot the bill. What we must do is make the hard but necessary reforms to government that will allow us to live within our means and still provide high quality services.
 
I believe we must allow the market to drive our recovery and give government a limited role in overseeing that process. Small businesses are thirsty to succeed so that they can employ more people, but inflation caused by government debt will poison economic conditions and job growth even more. We need to be doing everything we can to help get businesses back on their feet to employ more Californians rather than giving them another hurdle to overcome.
 
Robert Rubin, former Secretary of the Treasury under President Clinton, who pioneered “Rubinomics,” argued that balanced budgets produce real economic growth, lower long-term interest rates, and fend off inflation. He was right. “Rubinomics” produced real growth and created a federal surplus throughout the 1990s.
 
California should model its approach to addressing economic growth after this model instead of embracing starry-eyed and questionable theories such as deficit spending. _________________________________________________________

Sen. George Runner is the chairman of the Senate Republican Caucus. He represents portions of the San Fernando Valley, Santa Clarita Valley, Antelope Valley, Victor Valley and Ventura County. Visit his website here.