So what about California? A reader asks. Ummm, that's a tough
one. No, wait, it's not: California is completely, totally,
irreparably hosed. And not a little garden hose. More like this.
[yappity yap yap]
California will go bankrupt, muni and state debt will spike, the federal
government will backstop humanitarian programs and very possibly all state and
local debt, and eventually, California will figure out whether it wants higher
taxes or lower spending. But we will not actually make the world a better
place by enabling the lunatics in Sacramento to pretend they can have
That was simple. California will go bankrupt and bad thing will happen. It didn't take much thought to come to that conclusion and she's ignoring Proposition 13, which bypasses the state legislature in setting tax rates. But that was before her time and therefore she wasn't able to read about it in the Economist or Financial Times, so she might not know about it. It's just another forgettable, vaguely inaccurate anti-government post from McArdle.
But I don't think McArdle would be as happy to see New York suffer the same fate; she advocated bailing out Wall Street at least in part because, she said, it is an essential source of revenue for the state of New York. California, which decreased the power of its government and lowered its taxes, something that ought to thrill McArdle's little libertarian heart, deserves to suffer, yet New York should be bailed out by the entire country.
Megan McArdle with a double standard--one for her and the things she cares about, another for everyone else. I simply can't believe my eyes.