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Comment by Sam_Odio | Hacker News Reader

I don't understand how one of the largest states, which can supposedly benefit best from economies of scale, with one of the highest tax rates, can have such serious liquidity problems.

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Because in California budgetary politics, one party insists on raising taxes to meet expenditures while the other party insists on cutting expenses to meet revenues, and in the true spirit of compromise the only thing they can agree on is doing neither, which ends up being the worst possible choice.

At this point they should probably be doing both.

While I agree with your sentiment on the ineptitude of our politicians, what actually happened was somewhat different. We as voters passed a bunch of propositions that increased spending while limiting the government's ability to tax. If our politicians are to be blamed, it is for not howling loudly that we have tied their hands.

Most of the blame falls on us citizens who went along with a system that doesn't work. Direct democracy is a cute thought, but in practice it spreads the responsibility too thin and fatally hampers a leader's ability to maneuver or veto obviously contradictory measures.

Perhaps now would be a good time to unwind this mess.

We need to raise property taxes and only exempt the seniors!

Direct democracy works exceptionally well in Switzerland, and the citizens vote four times a year there.

Time to state the obvious: the Dems have controlled both houses of the state legislature for decades, and they shovel money to the state employee unions in exchange for block voting. And it works.

Then there are all the regulations they pass that make CA the worst rated place in the US to do business, driving businesses and their tax money from the state.

I doubt that the entire budget is dictated by direct-vote propositions. To abuse the analogy, the government could probably get its hands free if not for the left and right hands each being more interested in keeping each other tied up than in getting lose from the bindings.

That said, are you mad? Holding the citizens as a whole responsible for the actions of a democratic republic? Surely, you jest. Besides, blaming voters is no way to get elected; it's always the fault of the other party.

The problem is that the tail wags the dog in California.

The California Constitution requires a 2/3 majority to pass the budget. The demographics of the state virtually guarantee a 60-40 split between Democrats and Republicans. It is virtually impossible to get any Republican to vote for a tax increase. Ever. It is hard to get Democrats to accept cuts to social programs.

This is a guaranteed mess and the budget process is therefore painfully difficult. Unfortunately the Republicans are so good on party unity that in the end the Democrats, despite their significant majority, wind up compromising far more.

To add to this mess, the voters can and do pass any measures they like through the referendum process with a simple majority vote. Once the voter initiatives have reduced taxes (prop 13 is a famous example) or mandated spending (prop 98 for instance), the legislature has to work around the resulting restrictions. Based on their votes, California voters have been pretty much oblivious to the effects of their decisions.

Ain't democracy wonderful?

The problem is that economies of scale generally apply in large Democratic states. Economies of scale are by their nature commercial. The only item that seems scales in CA is subterfuge.

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