Have you heard of the new plan to close California’s $19 billion budget shortfall?  If not, here is a link to a nonpartisan report by a public radio station, 89.3 KPCC.  Here are the basics of the new plan: 1) increase income taxes 1 percent for all Californians, except for those in the highest income… Read more

Our governor is trying to cut public employees wages to the minimum wage, and that is wrong.  What he’s doing is essentially holding the public employees hostage to try to leverage the legislature to act.  It’s not very different from holding a bank teller hostage to get the manager to hand over cash. I have… Read more

Alan Auerbach and William Gale have a paper on future deficits coming out in the National Tax Journal September issue.  They start with the Congressional Budget Office (CBO) projections, but point out that the CBO projections require that Congress does something it doesn’t do, nothing.  In the current context, this means letting the Bush tax… Read more

Today’s decline in market values, and particularly in the financial sector, has to reflect more than new employment data.  I’m thinking that market participants are coming to see that the risk of at least one  sovereign debt default is higher than previously thought.  A realistic assessment of the risks and potential impacts on the Euro,… Read more

Two articles today give us an idea of how hard it is for governments to cut back. The first one, in the Los Angeles Times, reports that the city’s Mayor, Antonio Villaraigosa, is recommending that the city “Slash city services.” In the second article, Dan Walters discusses the politics of California’s Governor’s proposal to cut… Read more