☆ Libertarian VP candidate Mike ter Maat: Although tax leery, Californians still split the ballot to borrow billions more (2/2)
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The fed’s unsustainable financial house may not yet be affecting Californian voters as they decide just how much they want to let their state government borrow. Economist Mike ter Maat says Prop 5 likely failed because it would have enabled indescribable future debt that affects voters' taxes directly. Yet Props 2 and 4 sailed through, because proponents made a case for borrowing more billions—on top of our state deficit. An Opp Now exclusive Q&A.
Opportunity Now: A lot of people opposing Prop 5 seem to be okay with two-thirds as the voter threshold for local bonds; they just didn’t want to lower that any further. They say Californians are generous. So then, what explains Prop 5 losing by about a ten-point margin?
Mike ter Maat: I think those are two different things. As a Libertarian, I would like to see the world become more fiscally conservative. But whether I want it to or not, it's going to, because the federal government is about to get itself into a world of hurt. Not by Thursday, but over the next couple of decades, certainly by the middle of the century; the federal government is not on a sustainable path.
ON: And do you think locally, Californians are going to respond to that?
MtM: Yes, year after year, not just when it happens around mid-century. As Hemingway said, slowly and then all of a sudden.
ON: Do you think the federal government’s future financial problems played into California’s rejection of Prop 5?
MtM: I tend to doubt it. I don't think that most people yet put a whole lot of stock into the fact that the government is borrowing too much money.
ON: What was it, then?
MtM: With Prop 5, my sense is that Californians saw that something would affect their taxes directly.
But it will be interesting to see over the next 5, 15, 25 years whether people begin to sense that the federal government is borrowing too much money, and if that makes people save more, borrow less, let their local and state governments borrow less.
ON: California’s budget deficit is around $56 billion. And yet, Props 2 and 4 add $20 billion in bond spending. They passed with twenty-point margins. What explains the ballot splitting?
MtM: Someone has done a good job of making the case that this particular tranche of borrowing was a good idea, but people are more leery of undescribed future borrowings and prefer to maintain control over that.
ON: That makes sense. People are naturally afraid of the unknown. On the other hand, RM4 was a $20 billion dollar housing bond for the Bay Area that described in detail how much it would cost. Unfortunately, their numbers were wrong; and after a grassroots group SHIFT, Bay Area (né $20 Billion Reasons) pointed that out, the regional government BAHFA pulled it from the ballot.
RM4 was marketed as a humanitarian housing measure; and in order to pass, it needed Prop 5, which was described as a pro-democracy initiative. Yet the moment the activists and special interests didn’t get their way, many of them broke down in tears, and called the grassroots opposition “anti-housing extremists” and worse, just because $20 Billion Reasons spoke up and warned that RM4 would raise the cost of living for everybody. What explains how pro-democracy humanitarians could lash out at their fellow citizens like that?
MtM: That makes me think.
ON: Post-election, how do you think people in state and local governments are feeling? Are they feeling chastened or encouraged by the results of Prop 5 and the other initiatives?
MtM: I would hope they would be chastened by them. That you see people becoming less willing to hand over power, that people are increasingly skeptical of government overreach. But I don't want to overinterpret.
ON: Californians didn’t even get a chance to vote on the Taxpayer Protection Act, which would have reversed the Upland loophole allowing “citizens' initiatives” to raise taxes with only 50% voter approval, increasing local governments’ power to hike taxes. What, if anything, would a Libertarian administration do to intervene in California and defend taxpayers against abusive tax hikes?
MtM: States largely have the right to make their own mistakes. It can take decades for people to learn from bad decisions and correct course. I believe Californians will learn the lessons, but it's going to take an enormous amount of time.
ON: What role can the media play helping communicate those lessons?
MtM: Our media is so bifurcated into different camps. I used to believe you could figure out most of reality by flipping back and forth between MSNBC and Fox: where the stories overlap is mostly factual, and where the stories do not overlap is a lot of opinion. Now, the stories just don't overlap very much at all.
ON: What's happened to the information?
MtM: I think it challenges our ability to define information. Mainstream media, news, and a lot of alternative media news are so motivated by a need to count eyeballs that they have skewed themselves so far toward entertainment. That they are willing to feed people almost anything that they want to consume.
ON: Do you have any words of encouragement from a Libertarian perspective, for groups like SHIFT, Bay Area, who helped protect taxpayers by bringing real information to the table?
MtM: People truly are fiscally conservative.
Also, they are tolerant of diversity. That includes opinions and cultures, but it also includes interests. Most Americans are respectful of other Americans’ interests, and we need to do a better job of appealing to that.
Americans need to be reminded that just because it's good for you and maybe certain groups of people doesn't mean it's good for everyone. Respecting that is one of the most American values. The fact that we are less culturally homogenous than other nations means that we are more respectful of minority political interests.
That, in turn, leads to a more dynamic economy. It’s not a coincidence that these characteristics differentiate the United States from other major democracies around the world
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