Jerry Brown on Budget & Economy
BROWN: Well, you've got to be tough on spending. No matter how liberal you want to be, at the end of the day, fiscal discipline is the fundamental predicate of a free society. And you just have to maintain that.
Q: Is there a lesson for President Obama? He says, at least for now, we've got to spend more.
BROWN: Well, yeah. Spend more. But in the framework of adjusting your long-term liabilities so we're in balance. So that's not inconsistent. Invest and create jobs, but over the long term, your revenue has to meet your liabilities. And that's not the case today.
California's current budget windfall has come almost entirely from a rebounding stock market, and from billions in revenue generated by a capital gains tax--the most volatile revenue stream. Brown, scarred by budget battles both a few years ago and a few decades ago, said the state should save money in the good years to pay for the bad years.
"I think that kind of ping-pong budgeting, where first you ping and then you pong, makes no sense," Brown said. "It's cruel budgeting to propose a spending program and then have to finance it two or three years from now by cutting somebody else's program."
So we can't go back to "business as usual." Boom and bust is our lot and we must follow the ancient advice, recounted in the Book of Genesis, that Joseph gave to the Pharaoh: Put away your surplus during the years of great plenty so you will be ready for the lean years which are sure to follow.
Most governors and legislatures--in modern times--have forgotten this advice. This time we won't do that. We will pay down our debts and remember the lessons of history.
Fiscal discipline is not the enemy of our democracy but its fundamental predicate. To avoid the mistakes of the past we must spend with great prudence and we must establish a solid rainy day fund, locked into the Constitution.
"California is still a very yeasty place," he said, noting the state's record for companies that develop new technologies that grow into major industries. He said the state now has multibillion-dollar surpluses that can continue for the next several years if state lawmakers spend responsibly.
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