Fixing California, along with much of the U.S.A.

An interesting article in the L.A. Times talks about the destruction of a former drug house in an L.A. neighborhood. They talked about the amount of crime and violence that had surrounded it and how the neighborhood had become safer. Of course, the crime probably moved about five blocks, but it looks good on a bar chart.

It did get me to thinking about the California state budget crisis. If not completely balanced, the California budget would be much closer if the federal government were today to legalize marijuana and assign to the states the franchise for selling it legally at a moderate profit.

At a stroke, a massive amount of state, county, and local spending would be eliminated. Everybody gets paid in this futile "war on drugs," launched by Richard Nixon with a promise that it would be over in a few years. The snitches get paid, as do the cops, the public defenders, the prosecutors, the judges, and the prison guards, all for preventing the use of a substance less lethal than tobacco or alcohol.

In addition to the money saved, there is the money earned by selling it. The stuff is sold now, but the public sees no revenue. Billions would flow into state treasuries that now go to Mexican drug lords, who hire people to kill Mexican public officials. The feds wouldn't need to keep shipping our cash to Mexico and Colombia to fight the effects of the illegal cash we are shipping there.

While we're at it, we could legalize and tax prostitution. I notice that Eliot Spitzer's pimp in New York may go to jail for two years. At a cost of tens of thousands of dollars to achieve exactly what?

As the great thinker Lysander Spooner wrote in the 19th century, vices are not crimes.

Getting ready for Wednesday in Oregon

The governor and the legislature obviously know that something bad is going to come out of Wednesday morning's update on the state's tax revenue forecast. They are already starting to ask agencies for suggestions for 5% reductions in their budgets for the current biennium. Since there are only a few months left, this is an impossible target. For the schools, with contracts in place for their expenses, it's not likely they can do anything at all.

So when the new estimate comes in, showing at least a billion dollars shortfall for the next biennium and enough damage for this one to wipe out the rainy day fund, there isn't much they will be able to do except spend it. They were already planning to spend the EFB (Ending Fund Balance) down to almost nothing, which means that the so-called rainy day fund was just the EFB. With the two combined reduced to almost zero, they will be legally obliged to super-balance the next biennium and restore some semblance of an EFB. So figure that the actual shortfall for 09-11 is already down a billion before it starts, and will be down two billion at least when the forecast comes in. When the forecast becomes realistic, which by policy in Oregon is always very and generally too late, it will be down three billion or more.

This is before considering the effect on costs of PERS. Maybe this time, we can collectively agree that making promises that oblige future generations is unethical, and that whatever money the current generation chooses to provide its public employees for their pensions should be given to them via 401(k) or whatever, at their own future risk entirely.