As we enter a more severe recession in both California and the rest of the nation, one thing has become crystal clear.  In General, the politicians in Sacramento and Washington, D.C. are not interested in solving the problems besetting our nation, but in the words of White House Chief of Staff Rahm Emanuel:

"You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before."

This opportunity is hurting the lives of previous and still working Californians and Americans.  I am just one of millions laid off in this crisis who are scrambling for a new job that will pay the bills and put food on the table.  I previously was employed as an accounting assistant at a supplier for Toyota Motor Company, however after having been laid off with 11 other guys like many reading this editorial I am hurting. 

Even now the budget crisis in Sacramento has doubled the vehicle license and registration tax many Californians are paying, added a tax on our income taxes and has increased sale taxes just for added fun.  These higher taxes will not help stimulate California's ailing economy, but just force us to conserve our dollars and spend less causing a vicious downward economic spiral that will further damage our already fragile economy.

So, why is this crisis getting worse and what step do we as a state and as a nation need to do to stop the pain and solve this problem?

One question needs to be asked why is this crisis feeding on itself?  Until this question is addressed and the problem understood we are not going to get out of this downward spiral. 

One reason is that folks have either lost their jobs or are fearful of losing their jobs, this has forced businesses to cut back discretionary expenses as well as lay off some of their employees, which both have led to less debt being repaid to those banks and other institutions that lend the money out, with less credit available, less purchases are made and the cycle becomes self perpetuating.  For some reason, most of the politicians in Sacramento and Washington D.C. don't get this.  Money and other investments have been fleeing the U.S. ever since the aftermath of Katrina, so any try by Congress or the State legislature to get more money out of the wealthy will drive whatever wealth that is left out of country before the legislation can go into effect, while driving even more businesses into the ground, causing even more folks to be unemployed.

So how do we stop this downward spiral of our economy?  With the recent budget deal passed by the State Legislature the fixed costs of most Californians just jumped several hundred dollars.  When you deal with millions and billions every day, a few hundred may not seem like much of an added burden, but for a working family where one of the members have lost their job, it could mean the difference between paying a credit card bill or putting food on the table.  So first thing that the politicians need to do is allow folks and the businesses that employ them to keep more of the money they earn and to not take so much through the taxation of their property, be it their income, their car, their home, or their worksite.  The second thing that needs to be done is to take a look at the regulations the government places on businesses and see which ones are necessary and which ones are based on junk science or are just punitive on businesses, keeping the former and getting rid of the latter, this should free up funds of businesses that currently goes towards government compliance costs.

At first those businesses and individuals that are employed in creating stuff will first use this extra cash to pay down debts and build up savings. Once they get out of survivor mode, then they will start purchasing products that are of a more frivolous nature or expand the hours their employees work or the number of employees that they employ.  Meanwhile as debts the banks were not expecting to be repaid are repaid, the banks will free up their lines of credit which will further enable businesses to expand.  This will create a growth cycle which will continue until the government does something else to make the economy grind to a halt.  In his First Inaugural Address Ronald Reagan said:

"In this present crisis, government is not the solution to our problem; government is the problem. From time to time we've been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden. The solutions we seek must be equitable, with no one group singled out to pay a higher price... Now, so there will be no misunderstanding, it's not my intention to do away with government. It is rather to make it work--work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it."

This applies to our current situation and is the thought that I wish to leave you with.

-Sincerely,
Matt Kauble
Cerritos Resident