Paul Krugman begins his commentary today in an article titled “California in Surplus” by saying that, “As best I understand it, what’s going on in CA is a microcosm … of what’s going on at the national level.” This illustrates that, as usual, Paul Krugman doesn’t know what’s going on; or if he does know what’s going on he doesn’t understand it.
Yes, California is projecting budget surplus in the next fiscal year. This is due in part to tax increases which utterly dwarf what Obama accomplished on the federal level, and to some rather unrealistically optimistic revenue projections. We’ll have to wait and see if these surpluses actually do materialize, and I’m rather suspecting that they won’t, at least not to the degree that they are forecast to do.
But more to the point, separating California’s putative recovery completely from what’s happing at the federal level and something which Krugman completely ignores, is that it’s largely the result of two years of ruthless and very painful cuts in state spending. These cuts have been across the board and have included safety net programs, social services, public safety, and state employee pay.
The federal government essentially has cut nothing, so to say that California is a “microcosm of the federal level” is the statement of an idiot.
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