Solving California's Budget Crisis
So far all that is coming out of the the Governor and State leaders is how much they will have to cut. Not one word on how we can create new jobs, put Californians back to work and start rebuilding our state. It appears they are locked in a time warp and nothing penetrates their thinking. Well I have several solutions that would get us out of this mess starting tomorrow.
1. Authorize the drilling for oil in California. An average oil derrick costs $1.5 billion per unit to make and sadly they are only made in South Korea. Let’s open up California to building facilities, drilling, and become a world leader in this technology. The amount of high paying jobs this would create and the revenue to the state would be staggering! For every high paying job created three more are spun off from ancillary business and service related industry. We will need to create new partnerships with private industry and with the waterways, coastline, docks and shipyards, we could be up and running in under a year. The amount of NEW revenue coming into the state would be in the billions!
2. Start building Nuclear Power Plants. It is clean energy that produces energy 24 hours a day. We can then export electricity to other states and turn a profit! Again the amount of high paying jobs created and the spin off jobs would be permanent and put California back on track as the Golden State. Now are the environmental groups going to protest, sure. That is why I propose bringing them on board from the beginning in designing, location and operating the plant safely and with respect for the environment. The French are leaps and bounds ahead of us, using our own technology. They even know how to dispose of Nuclear waste! In this day and age we can no longer be enemies with the enviros on this issue. It’s time to work together.
3. Lower the taxes on businesses and make California the best place to have a business not the nations worst. We can no longer allow out businesses to relocate to other states. Its time to send a strong message to the legislature to get the job done, or out the door you will go.
Can we rally our state and make California great again? The opportunity is in our grasp. I hope you will join with me in convincing all our leader to wake up, stand up and start marching to a new drummer. We can’t cut state employees enough and tax our way out of this mess. We must have a new direction and a new spirit of a can-do attitude!
I am Paul Smith, Republican candidate for the the 5th Congressional District (Sacramento). Www.PaulSmithforCongress.org.
I hope you will join with me in in bring California back to greatness.
Learning Economics by way of Chile
During the emerging markets commodity boom a few years ago, the Chilean Finance Minister Andres Velasco threw a wet blanket on the party. Chile is the world’s largest copper producer in the world. So as their country was reaping the benefit from copper, prices quadrupled. He set aside a huge chunk of the profits, $20 billion into a rainy day fund. The total was more than 15% of the economic output of the GDP of Chile.
Needless to say many attempted to get him to crack open the vault and spend the money, staged protests and stormed in on his meetings. Wary that putting all that money into the economy would create all sorts of bubbles in the economy when copper prices tanked (and they did) he kept the cash safe.
Today Mr. Velasco looks like the smartest guy in the world. Copper price fell 50%. Argentina is facing default while oil rich Russia is now having to bailout its own banks. Meanwhile Chile has not spent one peso on ANY government bailouts or borrowed any money. Matter of fact Moody’s Investor just upgraded them in the ratings.
Today Chile is taking its copper money and sinking it into their own country and creating jobs, a massive stimulus plan and they are doing it without borrowing one cent! Analyst are saying that Chile will have an annual economic decline of just 0.5%. The Governments of Brazil and Mexico, so strapped in debt, are unable to help their own people and the standards of living in those countries are sinking to record lows. In Chile the Government is handing out stipends to help those folks keep their children in schools.
How did Chile do this? Mr. Velasco studied at Columbia University. He pushed a law through requiring the annual budget to be based on a ten year copper average not just the current price. Anything over the average went onto a rainy day fund. So instead of spending everything in sight, he put away $20 billion just in case copper prices went down and the economy went south.
Many where unhappy with his policies and student protested, bloggers mocked him, and great many speeches were made criticizing his policy. The economic performance for the country was average and the economic output was only half of what it had been in the huge run ups in the early 2000’s. Experts predict that Chile will have the mildest of recessions as Chile is pumping money into banks and investments to keep the country going. All of the money was saved up in advance and they are being now being hailed as the standard on how to manage money.
Today Chileans are working and improving their country. Contrast that to the United States. We are borrowing, going into record debt, unemployment is closing in on 10%, and the Government it taking everything over. How is it that one man in Chile saw this coming, did something about it, took the grief when the markets had a huge run up, and now looks like the Oracle from Nebraska himself? He had the courage and foresight to know that nothing is forever and he saved during the good times knowing that we always have the bad times.
How I wish our politicians would have done the same. When we had the chance to save up, they spent it all. It’s too late for all of us now. We all should look at Chile as an example on how to do it and realize that we have to start doing this now or we will go through this again during the next business cycle. Can politicians really save money? If they can’t its time to vote some folks in that can and will. I plan on bringing that philosophy to Congress next year. I hope you will join me.
Paul Smith. Republican Candidate for the 5th Congressional District (Sacramento).