As students, a common characteristic defining most of our
relationships with our parents is how they complain about paying
our bills ““ our credit card bills, our education bills, our
phone bills. On March 2, however, the tables will very likely turn
and our parents will hand us a bill far worse.
Fifteen billion dollars worse, to be precise.
That’s right, UCLA. It’s that time of the year again
““ voting season. While most of the focus has been on the
Democratic presidential primary, another issue that affects UCLA
students much more directly will also be on the ballot: What to do
about the state’s budget crisis.
The Governator wants Californians to pass Propositions 57 and
58, which would approve a mammoth bond measure and prevent future
borrowing by the state government.
But these measures will not solve anything. Without fixing the
structural problems underlying the budget crisis, Propositions 57
and 58 will merely pass on the negative side effects to us ““
the younger generation.
This is borrow-and-spend conservatism of the worst kind. Gov.
Arnold Schwarzenegger’s $15 billion borrowing spree is a bill
that is going to eventually be footed by us current college
students.
But what’s worse is the blatant dishonesty of
Schwarzenegger’s actions.
Schwarzenegger based his entire recall campaign around the state
fiscal crisis, and yet his first act as governor was to plunge our
state $4 billion further into debt by eliminating the vehicle
license fee. Fully one-third of the cash that our governor has
proposed to borrow ““ and again, what we will end up repaying
““ would have been unnecessary had the fee remained.
The governor is hiding his borrow-and-spend campaign behind the
mantra of “fiscal conservatism.” But Proposition 58,
with its limits on future borrowing, will only serve to completely
handicap the government’s ability to deal with future
crises.
While massive and irresponsible bonds on the scale that the
governor is proposing are ludicrous, limited borrowing is sometimes
necessary to help lessen the impact of budget crises. Most
economists agree that maintaining a small and manageable debt is
even healthy for the economy. This theory is known as
“Keynesian Economics.”
For example, during the Great Depression of the 1930s, the
government spent the early part of the decade obsessed with keeping
the budget balanced. As a result, the United States did not fully
recover from the depression until the post-World War II economic
boom. Sweden, on the other hand, borrowed money to increase cash
flow into its economy, and was fully recovered from the depression
by the end of 1934.
On the other hand, one of the other propositions on the March 2
ballot, Proposition 56, does provide some hope for solving the
current structural problems of the budget deficit. Proposition 56
will help solve the current budget crisis ““ and potential
future crises ““ in three ways. If enacted, it would hold
legislators accountable by revoking their salary for every day the
budget is late. Secondly, it would help bring an end to budget
gridlocks by reducing the vote requirement from a two-thirds
“super-majority” to 55 percent. And finally, it would
create a “rainy-day” fund of reserve cash to help
lessen the impact of economic downturns.
Changing the vote requirement on budget issues to 55 percent
would reform the budget process by reducing gridlock. It would be
good for democracy because it would prevent minority parties from
hijacking budget talks. The “rainy day” reserve fund is
also long overdue and badly needed. Many other states, such as
Maine and Kentucky, created rainy day funds decades ago and have
been tapping them recently to help smooth over the effects of the
nation-wide economic slowdown of the last few years.
Proposition 56 is the only serious budget reform policy to be
found on the March ballot. Propositions 57 and 58 only call for
budget procrastination, and could even handicap the
government’s ability to deal with future shortfalls. When it
comes to borrow-and-spend proposals, just say “no.”
When it comes to setting responsible and honest fiscal policy,
the Governator has been doing what he has done for his entire
career ““ acting. If California passes Propositions 57 and 58
and does not pass Proposition 56, then there is one thing that will
be guaranteed about the current budget crisis: It will be back.
Bitondo is a third-year political science and history
student. E-mail him at mbitondo@media.ucla.edu. Send general
comments to viewpoint@media.ucla.edu.