Republicans Will Sue Attorney General over ‘Misleading’ Gas Tax Repeal Language

Gas-Pump-blue-generic+flippedRepublican advocates of a California ballot initiative to repeal the state’s new gas tax will sue Attorney General Xavier Becerra over language he issued describing the measure, which they say is “misleading” to voters.

The language, reported by the Los Angeles Times, says the referendum “eliminates recently enacted road repair and transportation funding by repealing revenues dedicated for those purposes.” Proponents of the repeal say that there is no way to be certain that the gas tax and new vehicle registration fees will be used to fix the state’s roads.

In addition, the Times notes, Becerra’s description says the referendum “Eliminates Independent Office of Audits and Investigations.” Advocates of the repeal note that the office, provided for in the gas tax law, does not yet exist.

The language in Becerra’s description must be provided by those gathering signatures for the referendum, and backers are concerned that the language of the description could dissuade some people from supporting the effort.

Assemblyman Travis Allen (R-Huntington Beach), who is leading the repeal effort and is running for governor in 2018, told the Times that “almost everything” in Becerra’s description of the referendum was misleading.

The battle over language is only the latest controversy in the fight over the gas tax. Democrats are trying to change the rules for recall elections to protect State Senator Josh Newman (D-Fullerton), who voted for the gas tax. (The Wall Street Journal accused them of “rigging the recall rules” to move the election from this fall to next June, when Democratic turnout is expected to be higher.) Democrats are also trying to remove campaign finance restrictions on legislators so that they can donate unlimited amounts of money to Newman’s effort to defend his seat in the recall. And Democrats are suing members of the California College Republicans who gathered signatures for the recall, alleging that the students misled voters by telling them that recalling Newman would mean repealing the gas tax.

This article was originally published by Breitbart.com/California

Jerry Brown, California Legislature, Reach Cap-and-Trade Extension Deal

carbon-tax-1California Governor Jerry Brown announced Tuesday evening that he had reached a deal with both chambers of the state legislature to extend the Golden State’s “cap-and-trade” program beyond its original expiration date in 2020.

Brown, Senate President pro Tem Kevin de León (D-Los Angeles) and Assembly Speaker Anthony Rendon (D-Lakewood) announced “a legislative package that will launch a landmark program to measure and combat air pollution at the neighborhood level – in communities most impacted – and extend and improve the state’s world-leading cap-and-trade program to ensure California continues to meet its ambitious climate change goals,” according to a statement released on the governor’s website.

The statement adds that the deal “includes AB 617 by Assemblymembers Cristina Garcia (D-Bell Gardens), Eduardo Garcia (D-Coachella) and Miguel Santiago (D-Los Angeles) and AB 398 by Assemblymember Miguel Santiago (D-Los Angeles) and is the product of weeks of discussions between the administration and legislative leaders with Republican and Democratic legislators, environmental justice advocates, environmental groups, utilities, industry and labor representatives, economists, agricultural and business organizations, faith leaders and local government officials.”

The cap-and-trade system sets an upper limit for carbon dioxide emissions, and then issues emissions permits that can be bought and sold by producers. The system applies an effective tax on emissions (one that some businesses would prefer to leave the state to avoid). Companies that are more energy-efficient can sell their permits for profit — a model that Tesla, for example, has used to pad its bottom line.

The legislation will have to proceed in the absence of former Assemblyman Jimmy Gomez, who will be sworn into Congress on Tuesday — more than a month after winning a special election to replace Attorney General Xavier Becerra in the 34th congressional district. Gomez had delayed the ceremony partly to make his vote available for a cap-and-trade extension deal.

The deal, as noted by Bay Area public radio station KQED, will include provisions to allow local communities to monitor air quality and industrial air pollution, without allowing them to regulate carbon dioxide emissions. Climate change activists often confuse the two phenomena, though one has little to do with the other: carbon dioxide is an odorless, colorless gas that is not harmful.

KQED adds that the deal also ends “a fire prevention fee largely paid by residents living in rural, Republican areas of the state.” That could indicate that Democrats struck an agreement with Republicans to vote for the bills.

Without Gomez, the Democrats will not have the two-thirds majority required to renew cap-and-trade without facing a state referendum. But with Republican votes, that obstacle will disappear.

Following last year’s passage of Proposition 54, which requires bills to be on public display for 72 hours before a vote, that could mean a vote on cap-and-trade could come as early as Thursday.

Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He was named one of the “most influential” people in news media in 2016. He is the co-author of How Trump Won: The Inside Story of a Revolution, is available from Regnery. Follow him on Twitter at @joelpollak.

This article was originally published by Breitbart.com/California 

San Francisco’s ban on menthol cigarettes is liberalism at its worst

ICigarettesn San Francisco, megalomaniacal tech millionaires gorge themselves on exorbitantly priced plates of nettle fazzoletti while thousands of people live in unimaginable squalor. If you are interested in dropping some coin to attend a live performance of something called Public Disgrace, featuring “sex between male dominant and female submissive; domination by female and male dom; secure bondage, gags, hoods, fondling, flogging, and forced orgasms with vibrators,” the City by the Bay has you covered.

If, on the other hand, you are one of the city’s lucky homeless, yuppie public health fanatics might graciously allow you the privilege of soiling yourself in public without the risk of a jail sentence.

But as of next April, it will be illegal to purchase menthol cigarettes in San Francisco.

For the knowledge workers indulging in “burgundy-braised lamb cupcakes with beet-whipped mashed potato frosting and chive sprinkles,” this arbitrary and capricious prohibition of a substance that offers less rarefied pleasure to thousands of their fellow citizens will not seem like much of a setback. Nor will they find fault with the reasoning of the San Francisco Board of Supervisors that menthols are “starter products” that are “typically marketed to vulnerable populations including children and young adults, African Americans, and LGBTQ people.” I mean, like, seriously.

How many of these cauliflower popcorn-eaters and consensual BDSM aficionados have ever taken a big drag from a Newport Menthol 100? The assumption that African-Americans enjoy menthol cigarettes because they are the hapless dupes of Big Tobacco is the sort of risible condescension characteristic of liberalism at its worst.

It never occurs to me the 30 or so times a day when I put another tube of brown leaves in my mouth and flick my lighter to say, “Man, this is so good for my health.” But the fact that cigarettes are bad is not exactly occult knowledge. Millions of us smoke anyway and will never quit, San Francisco do-gooders be damned.

Has it ever occurred to self-satisfied liberals that some people smoke menthols, or any other kind of cigarette, because they find it enjoyable, the same way that some of their fellows get a kick out of watching women being contractually beaten and spat upon, albeit without the consequences to their immortal souls?

I also find it impossible to make sense of the city’s argument that the “financial cost to San Francisco in direct health-care expenses and lost productivity from tobacco use is estimated at around $380 million a year.” Never mind the rune-casting arithmancy involved in assuming that every person who has ever taken so much as a puff of a cigarette and then in the course of his three-score years and ten gone in for a routine physical is costing the city money directly attributable to the existence of the demon leaf. Far more mystifying — indeed mystical — is the notion that it is possible to calculate “lost productivity.” How do they know that people aren’t working harder because they have smoke breaks to keep them going?

But this isn’t only a question of public accounting jujitsu. It is far more sinister and pernicious. To say that smokers can ever ipso facto “cost” their fellow citizens money in “lost productivity” is to claim that they are not human beings made in the image of God but rather specimens of Homo economicus — animate clusters of matter whose telos is contributing to the increase in our per capita gross domestic product. It is the same argument that used to be made by General Motors against line workers who, before the Great Flint Sit-Down Strike, were haughty enough to imagine they might be allowed to have conversations at lunch time. People are not economic variables — they are, well, people.

The consequences of the menthol ban are as predictable as they are unfortunate. People will not simply give up their cherished habit, especially when the product in question is available in nearby jurisdictions. Instead, this over-taxed consumable will become an illicit substance, and a black market for menthols will flourish. Is this really a prudent public policy decision at a time when selling loosie cigarettes can get you killed by the police on the opposite coast? This is exactly the point that Al Sharpton argued earlier this year at a series of public forums that banning menthols would only give law enforcement another excuse to lock up minorities.

I am proud to stand shoulder to shoulder with the good reverend here. Banning menthols is class warfare at its ugliest.

This article was originally published by The Week.

Will California lead America into the second American Civil War?

America and California are at a crossroads, and it is reminiscent of the Civil War in 1861-65. The first American civil war was fought over slavery and states versus federal rights, but this one is different, and possibly more insidious, because California is leading the charge to take down the duly elected president of the United States, Donald Trump. But what isn’t being reported shouldn’t be the phenomenon of the “deep state,” or “fake news,” but why former U.S. National Security Adviser Michael Flynn was pushed out of his position. This is the real reason the former elements of the Obama administration and the entrenched bureaucracy are trying to now ruin President Trump.

The former U.S. administration in September 2014 explained their surprise and the “intelligence failure” of the U.S. intelligence community and national security advisers to President Obama being caught off guard at the rapid advance of ISIS. But in 2012 when Michael Flynn was in charge of the Defense Intelligence Agency (DIA) a prescient analyst in the DIA’s Middle East office wrote a report predicting the rise of ISIS, fall of Iraq and the Syrian War.

Former Deputy Director of the CIA Michael Morell argued the memo was conjecture and conspiracy theory heresy, but Morell also knew Flynn had appeared on Al Jazeera during retirement confirming this information was shared at the highest levels of the CIA and policy briefings at the White House. Flynn embarrassed former White House and intelligence officials, and this caused them (the deep state) to look for a reason to ruin Flynn and now Trump.

Even more damaging is how former Deputy Director of the FBI under Obama, and now acting FBI Chief Andrew McCabe’s wife took over $500,000 for her failed Senate bid from now Virginia governor, Terry McAuliffe. Acting-Director McCabe is also under sexual harassment charges against Flynn’s top counter-terrorism official, Supervisory Special Agent Robyn Gritz. Flynn intervened to testify against McCabe and other top FBI counter-terrorism officials for sexual harassment.

The full story can be found here: https://www.circa.com/story/2017/06/27/nation/did-the-fbi-retaliate-against-michael-flynn-by-launching-russia-probe

Donald TrumpWhile Trump’s twitter account is bombastic and seems un-presidential, the charges Trump has made about the “deep state” being out to get him and having world media outlets as co-conspirators makes more sense examining how ISIS rose from Syria and now Trump is embarrassing former top Obama officials. If Flynn ever testifies, which I don’t believe he will, then careers, reputation and legacies could be at stake if the truth ever comes out about former NSA Susan Rice, former Attorney General Loretta Lynch, former U.N. ambassador Samantha Power, and former CIA Director, John Brennan and possibly President Obama.

Then add Trump’s bashing of President Obama’s signature foreign policy achievement – the Iran nuclear deal into the equation – and questions need to be asked who is out to take down President Trump and why? Also, why is California so hell-bent on taking down Trump, led by Congressman Adam Schiff, when Trump doesn’t need California for re-election or political capital to abolish Obamacare, pass tax cuts, cut environmental programs or gut California’s stake of the federal budget?

This new American civil war where shots aren’t being fired, but lives across the globe are being lost, takes on deeper meaning when considering that each day seemingly brings a new foreign policy crisis landing at the doorstep of Asian, European, Central American, South American, Middle Eastern and American leaders doorsteps. From the provocative behavior of Russia to the militarization of the South China Sea and the inevitable collapse of Venezuela.

When California elected leaders are more concerned about defying Trump, instead of being troubled when the governor of Illinois says his state is “like a banana republic,” then the U.S. is in deep unrest. California is also in the nuclear crosshairs of North Korea. It’s not an unheard scenario where California isn’t vigorously defended as our leadership, Hollywood entertainment chiefs and electorate continue poking the presidential bear. This could leave our state in the position to defend itself if and when North Korea launches their nuclear arsenal at our western coastline.

Whether you like Trump or not isn’t the question for California, as an equal amount of U.S. citizens didn’t care for President Obama, but rule of law should take precedence over obstruction of justice. Especially when hegemonic, adventurous nations such as China, Iran, Russia and North Korea (CIRN) are watching U.S. political behavior and searching for ways to undo the liberal global order for their own gain. If California cares about environmental laws, regulations and eradication of climate change they should embrace Trump. Since it recently came to light China, India and Europe are all building or keeping in place coal-fired power plants to compensate for the intermittent unreliability of renewable energy.

This undoing of America has become a “lawyers war,” that has produced soft, war-like moves bordering on a coup at American political leadership. Historian Victor Davis Hanson has listed 12 actions meant to undermine the U.S. government that range from nullifying federal law to using the 25th amendment to declare Trump unfit for office. California has embraced all of these methods to our detriment and I’d argue eventual demise.

Additionally, world media, universities and Hollywood popular culture seek to have Trump impeached from office, or worse prosecuted for some alleged misconduct that doesn’t have a law-breaking statute attached to the allegations. Now anything Trump attempts is deemed venomous and he needs to be reduced to a pariah, worse than a tin-pot dictator or authoritarian. The irony is let the American “resistance,” of academia, universities, Hollywood and political elites on both sides of the political spectrum try this “resistance” with the North Korean regime, and they, and their families would die, or be sent to a concentration camp.

What resistance-acolytes like U.S. Senator John McCain seek is power at all cost, and still upset their egos were hurt by Trump during and after the U.S. presidential election. McCain has gone from statesman to part of the resistance that now accepts money from the loathsome George Soros. McCain, who fought and literally bled for freedom, has become what he fought against as a young man. McCain is no better at this time than Maxine Waters, Gavin Newsom or Jerry Brown. Let’s hope Vietnam War hero McCain reforms his ways.

Interestingly, President Obama spoke about the use of power and fighting evil during his first term when he accepted the Nobel Peace Prize. Obama said:

But as a head of state sworn to protect and defend my nation, I face the world as it is, and cannot stand idle in the face of threats to the American people. For make no mistake: Evil does exist in the world.

What Obama understood during that speech, but didn’t carry over during his presidency, was explaining the burden a U.S. president has constitutionally as the Commander-in-Chief – mainly, the use of force – and confronting evil across the globe as the world’s policeman. This U.S. trifecta of resistance coming from universities, media and Hollywood has descended into smears, campus violence and bludgeoned rhetoric meant to ruin lives. And foolishly California funds this un-prudent political behavior through two-faced men like Tom Steyer.

U.S. Democrats, Republicans and European leaders don’t consider the inherited mess left to Trump. Instead of fighting real evil coming from CIRN, and their proxies, California elected focus on undermining Trump and his political appointees. Yet, make no mistake that CIRN are watching, waiting and salivating at the opportunity to parcel up territory for their ravenous, national-pride appetites. Imprisoning, eliminating and carving up California would be a top priority.

Consider what would happen to the Philippines right now if the U.S. hadn’t come to their aid fighting ISIS? ISIS is nothing compared to the Chinese Navy, Russian Spetsnaz, Iranian Quds Force, or North Korean nuclear missiles. Does California really want U.S. political instability? Chancellor Angela Merkel, who doesn’t like Trump, recently commented about U.S. leadership being at the forefront over Russian and Chinese influence. She may dislike Trump, but is shrewd enough to know the Russians would overrun her country and Europe in days without the U.S.-led NATO alliance.

This California political resistance should ask themselves why they are advocating war-like maneuvers and tactics without realizing that at some point maybe their alacrity will be pushed right back in their faces? If that happens then a shooting war in the U.S. will take place, and that could be the start of World War III. But, may cooler heads prevail and morality not be jettisoned to the backseat of global geopolitical struggles tearing at the social fabric that has held the world together for over 70 years.

Todd Royal is a geopolitical risk and energy consultant based in Los Angeles.

California Democrats out to reverse another election rule to help one of their own

As reported by the Orange County Register:

First, Democrats hoping to protect one of their own passed a law changing the rules for a recall.

Now they are pressuring the state’s campaign watchdog to reverse a longstanding stance on contribution limits to once again benefit Sen. Josh Newman, who Republicans are seeking to punish for casting a vote to raise state gas taxes.

In 2002, the California Fair Political Practices Commission adopted a regulation that said state candidates are subject to contribution limits when they give money to a recall committee controlled by another state candidate. The FPPC interprets the law to mean that state politicians can’t give the Fullerton Democrat more than $4,400 each to fight his recall.

Roughly 15 years and two recall elections after the agency took the position, Senate Democrats are arguing the FPPC got it wrong. They say candidate committees should be able to give unlimited sums to a candidate-controlled recall committee, which would allow Newman to rely on fundraising by colleagues to help fend off the Republicans gunning for him. Democrats had the Legislature’s government lawyers study the issue, and on June 27 Legislative Counsel Diane Boyer-Vine issued an opinion predicting that courts would uphold a reversal of the FPPC’s longstanding interpretation. …

Click here to read the full article

Union Continues Misinformation Campaign on Pension Crisis

Calpers headquarters is seen in Sacramento, California, October 21, 2009. REUTERS/Max Whittaker

Just as the moment appeared that the media attention devoted to California’s pension crisis had begun to reach a fever pitch regarding the state’s pension crisis, a key state public employee union doubled down on its misinformation campaign regarding the state’s pension crisis.

Yvonne Walker, president of the Service Employees International Union Local 1000, wrote a recent op-ed for the Sacramento Bee titled “Let’s not be as shortsighted on pensions as on drought.”

The title of the piece actually makes it seem like it might hint at a reality check on pensions, but if you read the piece there is scarcely a single point that cannot be refuted with substantial evidence and facts.

The piece begins by drawing a flawed parallel to the state’s drought, which recently ended due to record rainfall.

The piece states that a “group of self-styled experts has grabbed the media megaphone with doomsday predictions about California’s public worker pension funds.  They are repeating the same mistake, taking a short snapshot and concluding that it will extend forever,” state’s the Bee op-ed.

So the position the SEIU 1000 president is taking is that there will somehow be some great market correction between now and 2047, similar to the record rainfall this past winter, that will magically wipe away the $160 billion in unfunded liabilities that have accrued at the California State Public Employees’ Retirement Fund (CalPERS) since 2000.

This comparison may sound intriguing to Joe Public, or some state workers looking for some consolation in the increasingly abysmal prospects that their full pension will be there when they retire.  But it simply does not match with the facts and evidence, of which few are presented to back up her arguments.

First off, this is about math, pure and simple.  And for any expert, apart from the politically motivated state-funded UC Berkeley study cited in the piece, who has taken an honest look at the figures—things are not good.

In short, no financial expert can present any real evidence showing that CalPERS can grow its way back from its current 63% funded ratio to anywhere close to 100%.

Perhaps the best source is CalPERS own actuaries, Wilshire Associates, which has stated that they project the fund to achieve an average return of 6.1% over the next several years—nearly a whole percentage point below their current 7% assumed rate of return that doesn’t fully kick in until three years from now.

David G. Crane, a Democrat who was Governor Schwarzenegger’s’ point person on pension reform, is a former investment banker and wizard with the actual numbers.

Crane continues to publish a series of financial analyses of CalPER’s own figures, which prove that the fund is insolvent absent major policy changes and major changes in the assumed rates of return.

And if you don’t trust those folks, how about take a listen to a growing list of local administrators and public officials in local government who say that CalPERS recent rate increases are eating local government budgets alive and likely to push many to the brink of bankruptcy in the coming years.

Here is a great recent piece by a Beverly Hills City Councilman called “Pension Pomperipossa: Destroying California’s Cities,” while many more local and state accounts can be found on the Pension Tsunami website.

I doubt the Los Angeles Times, KQED, CALmatters.com, and famed editorial writer Dan Walters would devote a whole series to the state’s pension crisis if it were not for real.  These folks are not a group of “self-styled experts,” quite the contrary, these are the real experts—some of the best analysts in California politics.

Furthermore, even if CalPERS gets a 20% return on their portfolio in 2018, which is not even possible, they would still only recoup a fraction of their unfunded liabilities.

CalPERS and the state’s insolvent pension system is not subject to natural weather conditions, it’s a man-made disaster, resulting from years of mismanagement and making assumptions that deny the most basic of prudent actuarial and investment principals.

Unfortunately, SEIU President Walker and the rest of her union counterparts refuse to acknowledge what is so clear to everyone else—absent major policy changes CalPERS will go belly up and likely take a number of localities and public retirees down with it in the form of bankruptcy and lost government pensions.

That’s the reality.  And while union officials may believe they are gaining some kind of twisted political leverage or temporary windfall for their members by denying this reality, it will not change the underlying math, which is so very clear to everyone else.  In fact, the numbers are staggering, and undeniable to someone like me, and the many other experts listed above.

The state’s public employee unions are supposedly advocates for government and government employees, but by denying the most basic realities about the state’s pension crisis they are demonstrating that they care far more about their own self-interests than about a truly thriving public sector, and even the basic well-being of their own members.

After all, how will the state afford to pay for any current government programs if it is spending 4/5 of all new tax dollars on retired government employees?  I’m still not quite sure exactly how that policy result is defined as “progress.”

David Kersten is the president of the Kersten Institute for Governance and Public Policy—a Bay Area-based public policy think tank and consulting organization. Kersten is also an adjunct professor of public budgeting at the University of San Francisco. 

This piece was originally published by Fox and Hounds Daily

UC Berkeley takes issue with Seattle minimum wage study

Minimum wage fight for 15In 2013, to shore up support for a plan to rapidly increase Seattle’s minimum wage, city leaders agreed to let a team of University of Washington researchers have access to troves of confidential payroll information so they could evaluate whether the wage hikes were helping or hurting low-income hourly workers.

The decision came as similar debates were playing out in California over state leaders’ decision to phase in their own long-term minimum-wage hike, from $8 in 2014 to $15 in 2022, with businesses and some economists warning of unintended consequences.

In July 2016, as Seattle was on its way to raising the minimum wage from $9.47 in 2014 to $15 in 2017 – a 58 percent hike – the UW report came out and painted the effects of the 2015 increase to $11 as being minimal. This prompted sighs of relief from the business community and cheers from supporters of the wage hike plan. Most reviews of previous modest minimum wage hikes had similar results.

But the release of an updated report on Monday offered a much grimmer picture. It found that after the minimum wage reached $13-per-hour last year, employers began cutting low-wage jobs and limiting hours to such an extent that the average minimum-wage employee lost about $125 a month despite higher hourly pay. This has led both to I-told-you-sos from economists who had warned that huge wage hikes could backfire and to sharp attacks on the study, in California as well as the state of Washington.

“Their findings are not credible and drawing inferences from the report [is] unwarranted,” UC Berkeley economist Michael Reichtold the Los Angeles Times. Reich was co-author of a study of Seattle’s minimum-wage hike released last week by UC Berkeley’s Institute for Research on Labor and Employment that reached much more upbeat conclusions about the Seattle experiment.

Several economists cautioned against leaping to conclusions about a study that had not yet been peer-reviewed. They also warned of not disregarding past research that reached different conclusions and pointed out arguable shortcomings in the UW study’s methodology.

Economists see ‘shoot the messenger’ factor in reaction

But in some academic quarters, the reputation of the University of Washington researchers and the sheer volume of evidence they had on how Seattle labor markets were functioning produced strong defenses of the study – and criticism of those who were quick to trash the report.

“This strikes me as a study that is likely to influence people,” MIT economist David Autor told the Washington Post after reviewing its findings. He said he found it “sufficiently compelling in its design and statistical power that it can change minds.”

In a Facebook post shared far and wide on the popular Marginal Revolution website, Texas A&M economist Jonathan Meer praised the comprehensiveness of the research and joined Forbes magazine in knocking the credibility of the UC Berkeley labor center, saying its “previous work on the minimum wage is so consistently one-sided that you can set your watch by it, that unsurprisingly finds no effect.”

Meer also said it was no accident that the labor center and Seattle City Hall released the upbeat report before the downbeat report was released,  knowing it would get national attention.

“I find that whole affair abhorrent. Seattle politicians are so unwilling to accept reality that they’ll undermine their own researchers,” Meer wrote. “I don’t envy the backlash this team is going to face for daring to present results that will be seen as heresy. I know that so many people just desperately want to believe that the minimum wage is a free lunch. It’s not.”

Several California cities have raised or are in the process of raising their minimum wages even faster than the state, including Los Angeles and San Francisco. So far, these local efforts haven’t been evaluated with the thoroughness of the University of Washington’s survey of Seattle’s job market.

This piece was originally published by CalWatchdog.com

What taxpayers should know about the California budget

BudgetCalifornia voters are pretty good at figuring out what is going in the state capital when it hits them directly. For example, recent polling shows that citizen awareness of the $5.2 billion annual gas and car tax is very high and, incidentally, very negative.

But the same can’t be said when it comes to the more complicated and arcane actions of our state politicians such as the annual California state budget process. While Californians are painfully aware that taxes are very high (they’ve been watching their friends and neighbors moving out of state at record pace) they typically have little comprehension of where their tax dollars go. That’s not surprising since California ranks dead last in budget transparency according to a recent study by U.S. News & World Report.

Nonetheless, here are the main takeaways that every California taxpayer should know.

First, the budget is huge – over $125 billion in general fund spending – by far the largest budget in California history. Since the recovery began after the great recession, taxpayers have infused California’s General Fund with $41 billion and special funds by $28 billion. That translates into a 63 percent increase since 2010. And property owners have done their part as well. With real estate values fully recovered (and then some) property tax revenues are up 72 percent. This is where our schools get the lion’s share of their money.

Second, the budget is only balanced if you ignore debt. The majority party is practically breaking their arms trying to pat themselves on the back for a “balanced budget.” This is like a family celebrating the fact that they paid all their bills this month but ignoring the fact that they have a mortgage that is way beyond their means over the long term. California’s pension debt is, by some measurements, close to a trillion dollars.

Third, the budget is, as usual, full of tricks and questionable accounting. One of the more dubious ploys involves borrowing from special funds. This year, there’s a proposal to borrow $6 billion (with a “b”) from the state’s Surplus Money Investment Fund to reduce the unfunded liability of the state’s pension fund, PERS. While there is agreement that appropriating more money to PERS now helps to reduce unfunded liability in the future, that payment should come from current revenue, not a special account designed to cover ongoing operating expenses.  Let’s call this for what it is: Paying your Visa bill with your MasterCard.

The budget is being praised for adding a couple billion more to the state’s rainy day fund (technically called the Budget Stabilization Account) bringing it to over $8.4 billion. But recall during the last recession, the budget shortfall was many times that amount. Thus, while it seems like a lot of money, the state’s reserve funds remain woefully inadequate. You can’t save a penny a day for a couple of years and think it will be enough to fix the roof when it collapses.

Other trickery includes several dozen so-called “trailer bills.” These are supposed to be budget related bills – many are not – that can pass with a simple majority vote and are not subject to citizen referendum. Because they can be jammed through on short notice without citizen recourse, they are a favorite tool of the majority party to effectuate big policy changes. Two examples of this are the gutting of the California Board of Equalization – one of the few state tax agencies in America actually accountable to voters – and a blatantly political power grab by changing the law as it relates to recall elections designed solely to throw a lifeline to a tax-and-spend democrat who cast the deciding vote on the gas and car tax hike.

Bottom line? The majority party has adopted laws and policies which will unquestionably push state spending permanently higher by expanding programs, increasing welfare costs and giving their political funders – labor unions – higher compensation via costly collective bargaining agreements. Our elected leadership is driving California right off the cliff.  Thelma & Louise would be proud.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This piece was originally published by the Orange County Register 

Is a financial collapse of the United States imminent?

meltdown-620Debt, like sulfuric acid, eats away at everything.

If an individual misses a home-mortgage payment, guess what will happen? Miss a few more payments and a bank or other lender will take possession of the individual’s home.

What is the case with government debt? When government goes into debt, there are few, if any, initial consequences.

When President Andrew Jackson left office in 1837, the United States had no national debt. By 1981, 144 years later, the national debt reached $1 trillion.

Today, 36 years after 1981, the national debt is $20 trillion.

America’s debt is largely financed by the purchase of American “treasuries” (bonds, bills, and notes).

During World War II, Americans bought war bonds to help defeat Germany and Japan.

Buying war bonds was considered a patriotic duty. Famous individuals (like Hollywood actors) implored Americans to buy war bonds. Americans responded enthusiastically. If they had not, taxes would have had to go much higher to pay for the war. And who bought these war bonds? Answer: Almost all of the buyers were Americans.

Today’s $20 trillion debt is financed by bond-buyers, most of whom are residents of China, Japan, Europe and the United States.

Is buying American bonds really a safe practice?

Debt is not a problem until and unless it becomes a problem.

What would happen if buyers of American bonds decided that America, for some reason, was not a safe place for buying bonds?

If the event of such an occurrence, investors might just dump American bonds. Demand for bonds would drop. A bond worth $100,000 might fall to $1,000.

In an economic crisis, holders of American dollars might lose confidence in the American currency and rush to sell whatever dollar holdings they have. Such action would be called a “speculative attack” on the dollar.

As holders of dollars engaged in massive selling, the dollar, against other currencies, would tumble. For example, today it takes $1.27 to buy a British pound. A sinking dollar might mean that the cost of a British pound would be $2.25.

Look at the euro. Today, a euro costs $1.11. If the dollar were under attack, a euro might rise to $2.50.

A declining dollar might mean that a trip to London or Paris would become too expensive. The same would be true for Americans who wanted to buy French wine or German cars.

To protect the value of the dollar, the U.S. Federal Reserve, a federally-established bank, could raise interest rates. If interest rates went from about one percent, where they are today (in terms of what is called the “federal funds” rate), to 10 percent, foreigners might want to buy American bonds. A yield of 10 percent on a presumably safe investment would be very attractive.

High interest rates, however, could mean that a home mortgage that now has an interest rate of four percent – about $1,400 a month for a 30-year fixed rate mortgage on a $1 million dollar loan – might rise to $14,000 a month. How many Americans could afford a mortgage that required a payment of $14,000 a month? (A payment of $14,000 a month would require a borrower to pay $50 million over 30 years.)

High interest rates would bring housing construction to a halt. Car loans and other loans might not be affordable.

The consequences of high interest rates would be that construction workers, automobile workers, and others would lose their jobs, creating a severe recession or an economic depression. Unemployment could reach 30 percent or higher as it did in the 1930s.

There may never be a day of reckoning over America’s current massive debt. But history teaches otherwise.

In 1940, when Great Britain was already fighting in World War II, a British pound cost $4.03. After the war (in 1945), a British pound cost $2.80. As the post-war years continued, Britain repeatedly devalued the pound so that it now costs, as stated above, $1.27.

In this writer’s opinion, the United States is operating like someone who has used a credit card to buy a Rolls-Royce. Eventually, the bill comes due.

If one looks at the value of the 1970 American dollar, today that dollar is worth 15 cents.

American’s ought to be prepared for an economic collapse. In such a case, it might be wise to own gold because no one might want worthless dollars.

Be prepared for America to become the next Greece.

Are you listening, Donald Trump?

Meanwhile – Back In The Real World

CNN sad faces on Ga election night 5-20-17My temperance mentor W.C. Fields had a saying: “Never give a sucker an even break nor smarten up a chump.” At the risk of smartening up the media, Democrats and George Soros-funded “resistance” chumps, I’d like to remind the rest of us that outside of the Left-wing bubble things are going quite swimmingly in the real world.

Ever since Donald Trump won the presidency, liberals have comforted themselves by saying it was all a mistake. They assume he is foolish, self-indulgent and incompetent. Much like the campaign last fall, the Left has believed their media cheerleaders that all was well – that by now Trump would be on the ropes or gone and the GOP would be reeling from electoral disasters.

The crown jewel was going to be Democrats capturing Georgia’s 6th Congressional district in the special election last Tuesday. The stars were in alignment. Their candidate had received 48% + in the April primary election, just a few thousand votes short of the 50% that would have given him victory.  His Republican opponent for the runoff received 18% in the primary.

Manhattan, Georgetown, San Francisco and Hollywood loved the Democrat Jon Ossoff, eventually providing his campaign with $32 million. Ossoff outspent Republican Karen Handel by over $10 million, which in a Congressional district with 500,000 voters is a huge amount. The Democrats, drinking deeply of the media-supplied Kool Aid, insisted that the election was a “referendum” on President Trump.

There were more traditional Democrat vs. Republican issues that could have been the race’s focus. But the Democrat rabid left, the Soros and Resistance looney tunes who now set the tone for the party, needed a pound of Trump flesh. In his announcement speech Ossoff said he was running “to make Trump furious.” The race did not need to be a referendum on President Trump. The Democrats made it so. They lost. President Trump won, again. He and the GOP are now 4 for 4 in special elections. (For UCLA grads that means the Republicans have won 100% of them.)

Republican Handel beat Ossoff 52% to 48%. Without going into deep psephology, the result is much worse for the Democrats than that margin makes it appear. In 2016 the Democrat candidate in this district raised $0 for his campaign and received 124,917 votes. $32 million was spent for Jon Ossoff for this election. He received 124,893 votes. The more the voters heard and understood the Democrat message the more votes Handel picked up. As Ohio Democrat Congressman Tim Ryan morosely but accurately observed the day after the election, “Our brand is worse than Trump’s.”

Ryan was spot-on, which brings us to the real world, where the Democrats are in a world of hurt. President Trump is dong to them and the media what cat owners do with those red dot laser pointers. Point it so the dot appears on one wall and the cat runs full speed at it, often crashing head first into the wall. Point it at the opposite wall and the cat rushes over there, often crashing head first into that wall.  Then point it at the sofa and the cat races there to catch it. But it never does.

President Trump’s latest “go chase the red dot, you dolts” moment with the media and Democrats was his trolling them on having taped his conversations with former FBI Director Comey. The Left furiously chased that red dot for several months, bumping into the walls labelled “no proof.” The president turned the laser pointer off a couple of days ago by announcing that he really didn’t tape anything, leaving the media and Democrats with egg on their faces and much of America with a large smile on theirs.

While the Democrats, media and the Soros-funded Left continue to chase the red dot of Russian “collusion,” conservative judges are being appointed, the economy is roaring ahead, federal regulations are being eviscerated, basic American industries are being revitalized and Republicans continue to win elections.

Some liberals not totally invested in the Trump-as-Hitler narrative are catching on. Katrina vanden Heuvel, the very liberal editor and publisher of the very liberal “The Nation” wrote a piece about how the media is being duped and played for fools by the Trump administration. Her point is that there is nothing to the Russian kerfuffle but the Left’s total focus on it allows Trump to advance his agenda while liberals are searching for Boris and Natasha in the Lincoln Bedroom. While the Left is looking for Russians, President Trump is implementing his conservative agenda.

Twenty-one constitutional conservatives have now been nominated for Federal judgeships, with dozens more in the pipeline. New jobs are being created at near record numbers. The number of Americans dropping out of the workforce is steadily declining for the first time since George W. Bush was president. Federal regulations are being slashed and burned. Coal mines are re-opening in Pennsylvania. Small business, which employs 70% of the total American workforce, finds itself free from Big Brother and able to operate at a profit. Thanks to our withdrawal from the bogus Paris climate “accords,” American industry can ignore the dictates of socialist European bureaucrats. The stock market has responded with a series of record highs.

The American people are taking note. The headline on the results of a a recent CNBC national survey is, “Economic Optimism Surges To Record High As Trump Gets Credit For The Economy.”  The take away lines from survey are: “The latest CNBC ‘All American Survey’ finds that 30% of the public are both optimistic about the economy now and for the future, the second quarter in a row that present-future optimism scored so high. That’s the highest reading in the survey’s 10-year history.”

The Democrats are now paying the price for the nearly year-long plunge into the fever swamps of Trump Derangement. They and their Media/Soros paid allies chortle about President Trump’s approval ratings that hover in the low-to-mid 40s. It should be sobering to Democrats that a CBS News poll released the morning of the Georgia election found that only 31 percent of Americans thought a Democratic takeover of Congress would make their lives better.

New York Times columnist Frank Bruni is very liberal, but like Katrina vanden Heuvel a realistic one. The day after the Georgia election he wrote, “So a party sorely demoralized in November is demoralized yet again — and left to wonder if the intense anti-Trump passion visible in protests, marches, money and new volunteers isn’t just some theatrical, symbolic, abstract thing.”

Theatrical, symbolic and abstract perfectly sums up the “resistance” to President Trump. Or to paraphrase Shakespeare in Macbeth, it is “a poor player that struts and frets his hour upon the stage, and then is heard no more. It is a tale told by an idiot, full of sound and fury, signifying nothing.”

The resistance hit its high water mark last Tuesday in Georgia and will slowly recede. The Democrat base activists are demoralized and confused, feeling like children whose parents tell them that Santa is coming the next morning – every day for 6 months.

In the real world, where Santa is not coming tomorrow morning, some people hate President Trump.  Many more people hate liberals. That’s real news, in the real world, and is good news for America.

Bill Saracino is a member of the Editorial Board of CA Political Review.