Just a few weeks ago a $ 50 billion public works bond issue was being touted by the governor as the surest way to shore up California’s tottering infrastructure. It was just an estimate, of course, but officials in and out of the administration privately doubted the rationale behind the intent.
In Governor Schwarzenegger’s third State of the State address on January 5th, however, the initial estimate was rounded off to an astonishing $ 222 billion, and the doubts are now being expressed aloud. “We must build a California eager to meet the challenges of the 21st century”, the governor said, but when he stated that his Strategic Growth Plan could be managed without any new taxes, his use of semantics earned him some flack.
• Assemblywoman Audra Strickland said she would not support new bonds. “I don’t support any measure that is going to hurt California’s families or the economy or jobs,” she said. “I think they’re perhaps the most expensive way to fund government.” Ms. Strickland obviously knows something about bond issues.
• So does Assembly Speaker Fabian Nunez. The proposal, he said, commits state resources too far into the future. “I have some concerns about making too deep a forecast into the future now and making that big a commitment that would basically tie our hands and our children’s hands in the future …”. Yes, but so what? A bond issue instead of “new taxes”, the governor said. It’ll be found money for you, alright … but an enormous burden for your progeny because, eventually, the piper must be paid.
Senator Alan Lowenthal’s only real concern was that retailers “are the ones who want to move the goods to market. They’re the ones using California as a landing,” he said. “We suffer the congestion and pollution.” [Like, they’re twisting your arm, Senator?]
Here’s the best way to solve California’s problems:
1. Rather than mortgage your children’s future, why not use other people’s money?
2. Sell stocks not bonds. Strictly speaking, bonds are an obligation. Stocks are not.
3. Make a determination to “spread the risk”. Develop the state’s underutilized ports and take the pressure off the LA/Long Beach communities. [The re(tail)ers can wag the dog only if you permit them to do so, Senator.]
4. Investors would love a piece of the action and will happily fund the entire public works program. They’d receive shares in our patented systems and would be handsomely rewarded. [The low yield from conventionally-structured terminals would never attract them.]
5. This stock transaction would take place in a lot less time than it would take lawmakers to debate the merits of $ 222 billion worth of bonds.
6. This method of funding public works projects guarantees no new taxes … and no semantics.
7. You will have guaranteed a worry-free and debt-free future for your grateful children.
8. And your own concerns about congestion and air quality would soon be a distant memory.