How to Balance the Budget? Assume a Balanced Budget!

jerry brown 051611

The budget agreement announced Monday afternoon by Gov. Brown and legislative Democrats reminds one of the old joke told about economists:

A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, "Let's smash the can open with a rock." The chemist says, "Let's build a fire and heat the can first." The economist says, "Let's assume that we have a can-opener..."

In California's case, the way to balance the budget is to.... assume a balanced budget. Or at least enough revenues to forestall cuts.

That's what this agreement, the details of which are only now beginning to circulate, appears to do. It replaces some of the gimmicks in the Democratic budget Brown vetoed with $4 billion in assumptions that more revenue will materialize.

Supposedly, cuts will follow if that money doesn't materialize it.

But don't bet on it, given that Democratic opposition to these cuts is so strong.

And since California's budget system and political realities don't permit an honest-to-goodness balanced budget, any future cuts will be full of assumptions and gimmicks,

At least that's what I assume.

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