Today I found one benefit to living in Los Angeles: The Reason Foundation is nearby. Last week I got an email inviting me to a lunchtime colloquium at their office. Adrian Moore spoke about the initiatives and propositions on the upcoming California ballot.
His analysis for this time around found that the proposed borrowing in this year’s ballot would lead to something like an extraordinary $88 billion in debt and interest for the state. Considering that most state budgets are less than half of that amount in their entirety, the amount should shock even citizens of New York and Texas.

Another disturbing finding about the bond proposals is that only a small fraction of the money would be spent on infrastructure–the only legitimate expense to be funded by debt. Most of the money would be allocated just to carry on existing programs, which should obviously be allocated for in the annual budget of the state.

It frustrates me to realize that even people who manage to get things on the ballot do not understand the wasteful and unaccountable nature of government and have no concept of economics whatsoever. The most obvious example of that is Prop 87 which would make it illegal for oil companies to pass a drilling tax on to consumers.

Even if there were detailed scrutinizing of the companies’ financial statements by government, Californians would end up paying higher prices at the pump because of the added costs of importing more oil. Oil would have to be imported because no company would keep low-producing wells online that would become unprofitable because of the added tax and therefore the supply being generated locally within California would need to be offset by oil from somewhere else.

I’m not sticking up for the oil companies; they are certainly involved in plenty of unsavory back room deals and receive for too many subsidies for me to be their cheerleader. I’m just laying out simply what will happen economically.

Anyway, the Reason Foundation consolidated much of its analysis on a great site at http://reason.org/californiaballot/ and if you look at anything read over the handy Pocket Guide to Propositions (.pdf).

technorati tags:california, election2006, propositions, initiatives, prop87, reason

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