- The Washington Times - Thursday, May 21, 2009

GOING BROKE

” ‘So what about California?’ a reader asks. Ummm, that’s a tough one. No, wait, it’s not: California is completely, totally, irreparably hosed. And not a little garden hose. … Their outflow is bigger than their inflow,” Megan McArdle writes at theatlantic.com.

“You can blame Republicans who won’t pass a budget, or Democrats who spend every single cent of tax money that comes in during the booms, borrow some more, and then act all surprised when revenues, in a totally unprecedented, inexplicable and unforeseeable chain of events, fall during a recession. You can blame the initiative process, and the uneducated voters who try to vote themselves rich by picking their own pockets. Whoever is to blame, the state was bound to go broke one day, and hey, today’s that day!” the writer said.

“There is a surprisingly sizable blogger contingent arguing that we have to bail them out because, however regrettable the events that led here, we now have no choice. But actually, we do have a choice: We could let them go bankrupt. And we probably should.

“I am not under the illusion that this will be fun. For starters, the rest of you sitting smugly out there in your snug homes, preparing to enjoy the spectacle, should prepare to enjoy the higher taxes you’re going to pay as a result. Your states and municipalities will pay higher interest on their bonds if California is allowed to default. Also, the default is going to result in a great deal of personal misery, more than a little of which is going to end up on the books of federal unemployment insurance and other such programs.



“Then there are the actual people involved. Whatever you think of, say, children who decided to be born poor, right now they are dependent on government programs, and will be put in danger if those programs are interrupted.

“On the other hand, I don’t really see another way out of it. If Uncle Sugar bails out California, California will not fix its problems. Perhaps you want Obama to make it fix the problems, using the same competence, power, and can-do spirit with which he has repaired all the holes in the banking and auto manufacturing sectors. But Obama is not in a good position to do this. California Democrats are a huge part of his governing coalition. All Obama can do is shovel money into the bottomless pit of California’s political system.”

TRACK RECORD

“The Obama administration is bent on becoming a major player in - if not taking over entirely - America’s health care, automobile and banking industries. Before that happens, it might be a good idea to look at the government’s track record in running economic enterprises. It is terrible,” writes John Steele Gordon in the Wall Street Journal.

“In 1913, for instance, thinking it was being overcharged by the steel companies for armor plate for warships, the federal government decided to build its own plant. It estimated that a plant with a 10,000-ton annual capacity could produce armor plate for only 70 percent of what the steel companies charged.

“When the plant was finally finished, however - three years after World War I had ended - it was millions over budget and able to produce armor plate only at twice what the steel companies charged. It produced one batch and then shut down, never to reopen,” said Mr. Gordon, a business historian.

“Or take Medicare. Other than the source of its premiums, Medicare is no different, economically, than a regular health-insurance company. But unlike, say, UnitedHealthcare, it is a bureaucracy-beclotted nightmare, riven with waste and fraud. Last year, the Government Accountability Office estimated that no less than one-third of all Medicare disbursements for durable medical equipment, such as wheelchairs and hospital beds, were improper or fraudulent. Medicare was so lax in its oversight that it was approving orthopedic shoes for amputees.

“These examples are not aberrations; they are typical of how governments run enterprises.”

DOWN WITH HARRY

“I’m definitely not alone in suggesting that Senate Majority Leader Harry Reid has to go - especially now that the Democrats have somehow joined with the poisonous Republicans to block the president’s executive order closing the detention facility at Guantanamo,” liberal blogger Bob Cesca writes at www.huffingtonpost.com.

“Good job, Harry. I’m sure the Republicans will fall over themselves to reciprocate the gesture, you know, because they’re all about cooperating with the Democratic agenda,” Mr. Cesca said.

“For too many years with Harry Reid at the helm, we’ve been watching as this ineffectual mope skulks his way around the Hill - allowing one successful Republican filibuster after another, while simultaneously enabling ridiculous and disingenuous Republican talking points, if not repeating them outright.

“Comparing Harry Reid to the cartoon character Droopy Dog would be both a compliment to Reid and very much an insult to Droopy who, while being a forlorn slow-talker, was actually quite savvy and speedy for a canine with a sluggish metabolism. Harry Reid, on the other hand, is only savvy and speedy when it comes to inexplicably capitulating to the historically marginalized and unpopular Republicans.

“Indicative of the worst kind of Democrat, he’s a wimp of highest order: a pushover substitute-teacher type - you remember the ones - standing up there at the chalkboard with a crumpled, submissive posture, quietly begging for everyone to take their seats, while not realizing that cafeteria coleslaw is being clandestinely stuffed into his pants pockets.”

CIVIL WAR

“It’s obvious that either Leon Panetta, Obama’s head of the CIA, or Nancy Pelosi, his party’s speaker of the House, has to go. No administration can tolerate a permanent, public civil war between two such high-ranking officials,” Dick Morris writes in the Hill newspaper.

“Especially when their disagreement stems not from issues of policy but from matters of veracity and credibility, the battle must end in one of their resignations. You cannot have the head of the nation’s first line of defense against terrorism calling the speaker of the House a liar and being attacked by her in turn,” Mr. Morris said.

“Obviously, Obama cannot fire Panetta. First of all, he just appointed him. And second, to cave in to Pelosi would earn him the massive disrespect and disapproval of the very operatives on whom he must depend to keep the nation safe. …

“Obama cannot pull the rug out from under him without incurring the agency’s permanent animosity. Before Sept. 11, 2001, that may have been an acceptable risk. Now it is not.

“But Pelosi is expendable.”

• Greg Pierce can be reached at 202/636-3285 or [email protected]

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