CA Budget Mess a Harbinger of Future Federal Issues

The massive budget deficit that the state of California currently faces should seemingly be an opportunity for lawmakers in the Golden State to finally face up to the fact that, at some point, chronic overspending needs to be reigned in.

Unfortunately, that's not the way things work in the world that politicians live in.

Consider Democratic lawmakers proposal to "solve" the state's $19 billion budget deficit, which counters the budget cuts that Governor Schwarzenegger had proposed.

"Assembly Democrats weighed in Tuesday with their own state budget plan that relies on borrowing nearly $9 billion from Wall Street and installing a new tax on oil production to pay back that loan over 20 years."

The $9 billion loan from "Wall Street" is basically securitized by the nickels and dimes that roll in over the next 20 years from the state's bottle recycling tax.

And I wonder how much additional tax revenue that new tax on oil production will actually bring in, once producers factor in the new cost into their estimates and decide that, "hey, maybe we should tap those oil rights we have in Texas or Oklahoma instead of bringing anything new on-line in California."

This sort of fiscal recklessness is foreboding for what Democrats in national office will do when it ultimately becomes clear that printing money is not the panacea for exploding budget deficits.

One can only imagine that instead of ultimately trimming costs as they by all rights should do, perhaps Congress will ultimately decide to securitize future gate receipts at the Smithsonian or sell burial plots at the Arlington National Cemetery.

We're a long ways away from lawmakers and their supporters in this country actually facing up to the destructive fiscal policies that they embrace.