Monday, December 27, 2010

Fixing California's Finances

California is in bad fiscal shape.  Its projected budget deficit over the next 18 months amounts to a staggering $28 billion.  The state’s public finances worsened under Governor Schwarzenegger, who promised to fix the cycle of boom and bust but left the state worse off.  Governor Jerry Brown, after a long absence from the governorship, is back at the helm.  He will need all the help he can get.

Here is my suggestion.  Replace the state constitution with the Basic Law (mini-constitution) of Hong Kong, a Special Administrative Region of Hong Kong.  Chapter V, Economy, stipulates that Hong Kong shall maintain low taxes, balanced budgets, free trade, and other liberal economic measures.  These requirements are the antithesis of California practices.

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