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Friday, May 21, 2010

There must be some mistake

I don't get it:

Oregon risks 10 years of crushing, multibillion-dollar budget shortfalls unless it immediately puts the brakes on spending and starts offering fewer services, cautions a new report released Thursday.
The authors of that report must not have heard the news. The Oregon state government is currently rolling in money. If it weren't, how could we afford to blow $250 million in state lottery funds on a shiny new train between Portland and Milwaukie?

Comments (33)

There'a a national echo of this, too:


Stop urban renewal, stop Milwaukie Light rail, stop the reckless spending.

Oregon at every level is headed towards disaster.

Where are all the candidates?

Krugman is a hack: "But the truth is that policy makers aren’t doing too much; they’re doing too little."

Our deficit will be something like $1.5 trillion this year. What would be enough govnerment intervention for Krugman? $3 trillion? $5 trillion? He's just saying this so that when this failed attempt to solve a debt bubble by borrowing more blows up in our faces, he can say "Oh, I was right, it's just that the goverment didn't spend ENOUGH. If they had listened to me...."

I commend Kulongoski for telling the truth. The next governor will be walking into a buzzsaw. The next few years may just make the last two look like a picnic on a local, state, and federal level.

C'mon the B-O progressive types will buy a few more years asking what would you cut and then when someone says something, they'll threaten that we're throwing grannie in the snow.

If Kitzhaber gets elected, this oughta be real good for the state based on what he did when we had a huge upside in the economy.

BTW - If someone does ask, tell every state mgr he has to cut budget 10% without affecting customer service. If he does it, then he can get back an extra 5% next year.

Come on, ride the train, hey, ride it, woo woo

Imagine how much City of Portland spending would have to decline if they can't use the charge card. Throw in another 30% decline in property values (maybe 50% more defaulted properties), and those generous pensions come first, as do bond interest payments. Would you enjoy living in a town with half as many police/firemen?

towm, did you happen to read the piece yesterday about Harrisburg PA's distress (NYT, Cooper)? About the self-destructive urge and bravado in municipal government, involving an incinerator:

“'I don’t fear bankruptcy,' said the city’s controller, Dan Miller, who said that the city would have been better off if it had just kept the incinerator closed. 'As a matter of fact, we are bankrupt. That’s the situation we’re in.'”

Our several levels of government are committed to building infrastructure for those who do not live here but may someday be enticed by such infrastructure to move here. Perhaps from Harrisburg PA, pop. 50K. Such infrastructure investment includes only marginal benefit for those who have already invested their lives in this area and are required to pay the cost. One need only look at the Sellwood Bridge to recognize that our incumbent elected officials have no capacity to provide the bread we need but only to entertain with futile circuses.

JB - "If it weren't, how could we afford to blow $250 million in state lottery funds on a shiny new train between Portland and Milwaukie?"
Here, let me ice that cake, wouldya? Add to this, "That too few people will even use.", and there - my outrage has cleared the launchpad.

Mass transit blows. That from the strongest poverty, and homeless, advocate I know. I love me some poor folk. We should have been subsidizing personal-transportation long-since, you know, if we're subsidizing anything at all. Hell, buying poor folks bikes would be a better idea, and more beneficial to them, than choo-choos.

Mass transit blows.

Actually, Vance - mass transit is good. Trains aren't, but TriMet cuts bus service whenever they get a train line built.

I start to question those who fear we are "heading" towards disaster. I think we've arrived.

The bigger the required permanent investment, the more dubious the involvement. Mass transit is indeed necessary, but fixing it in one location in what they all say is a dynamic growth future is misguided to the extreme.

Rose City Transit started shifting away from fixed rail streetcars to, first, rubber-tired electric trolleys, and then to diesel. The latter provided a much more adjustable tool to changing growth patterns, precisely because it was not fixed. The cost of the fixed portion, by the way, is huge.

This is aside from the entire issue of the quality of the tools we, as a community, have been buying. I'm curious as to the ability of the present equipment to stand up to consistent wear and how the system has provided for sustained maintenance. My reasoning is that in any revenue crunch, the first thing which most public agencies jettison is maintenance of the physical plant structure...including rolling stock. When that happens with fixed investments, the eventual fix after extended deferred maintenance, the costs skyrocket unnecessarily beyond what regular maintenance would have cost.

Gotta pay those prima donna planner CEOs, though.

Planning is one thing, though...Actually doing is another thing entirely.

Hah, now Krugman is saying we're going the Japan route. I'm sure one could find him saying the opposite in the last 12 months. About the only thing he's stable on is that we need to spend our way out of debt.

Gotta cut spending but we've passed 66-67 to prevent that, right? Oh and just passed 68-69 to let Big Ed. borrow more money.

I've got an idea. Bear with me, now: statewide urban renewal!

Surprise! Surprise! The $727 million that was supposed to be raised by Measures 66 and 67 is going to raise much less. I can just hear Steve Novick and Chuck Sheketoff now: "All we need to do is reduce the $125,000/$250,000 limit to $50,000/$100,000. It's only fair."

When will they learn? You can't tax and spend your way out of a recession. Memo to D.C.: You can't borrow and spend your way out either.

MJ , like your thinkin , but how about tolling every road in the state ? run to the store for milk....
Milk 2.40 /toll to leave your block 2.00
just kidding , dont tell the Mayorista !

Glad we just voted ourselves higher taxes, because they said that it would keep everything shiny and happy.

Whoops, guess they were wrong, and the opposition was right. Still short on the budget. Better pass more taxes! Don't worry about people and businesses leaving the state, we'll just pass more taxes on those that stay!

It's not just happeneing in Portland- it's out here in the burbs too...our fearless leaders seem to think they are rolling in dough...actually they dont think.
Here in Lake Oswego our Mayor Jack Hoffman is bound and determined to ram the streetcar down our throats and Highway 43. More frequent buses and express buses would take care of our traffic woes-not a slow-pokey expensive
streetcar....expensive is NOT sexy these days. Argh.

MJ says: I've got an idea. Bear with me, now: statewide urban renewal!

My idea is better. See we start a cat ranch in Portland with 100,000 cats. Each cat will average 12 kittens a year. Then we sell the cat skins. One hundred men can skin 5,000 cats a day. JOBS! JOBS! JOBS!

Now what shall we feed the cats? We will start a rat farm next door with 1,000,000 rats. The rats breed 12 times faster than the cats. So we will have four rats to feed each day to each cat.

Now what shall we feed the rats? We will feed the rats the carcasses of the cats after they have been skinned.

Now Get This! We feed the rats to the cats and the cats to the rats and get the cat skins for nothing!


Fred "Crocodile" Hansen

Can anyone see Kitz being willing to cut spending? Or any Democrat for that matter.

"Krugman is a hack"

"Hah, now Krugman is saying we're going the Japan route. I'm sure one could find him saying the opposite in the last 12 months. About the only thing he's stable on is that we need to spend our way out of debt."

Not that Krugman needs someone to defend him on a local blog, but:

He pointed out the stock market bubble long before almost anyone else, and prompted at least this Krugman reader to get his 401K out of the market in late 2007;

He pointed out the housing bubble long before almost anyone else, wrote about the shady bank practices that contributed to it, and predicted that housing prices needed to fall by about a third to be in line with historic price levels, which has happened;

He pointed out the folly--moral, strategic and economic--of Bush's Iraq war when even the "liberal" paper he works for showed some enthusiasm for it;

He knows the history of government spending during the Great Depression, which shows that recovery began with spending that helped ordinary people who were hurting and recovery stalled when spending was cut prematurely;

He was awarded the Nobel Prize in economics, which I doubt any of his detractors here can say for themselves;

He has not contradicted himself on any major issue, and was warning of a Japan-type economic malaise for the U.S. as soon as he recognized that the stimulus plan was both too small and geared too heavily toward tax cuts rather than spending that would lead directly to increased employment and significant infrastructure improvement;

He has said since the start of the Great Recession that excess government debt will have to be addressed, but along with many other respected economists--and many, many ordinary people--he recognizes that lowering unemployment is a more pressing concern than reducing federal debt;

He has talked for years about the biggest domestic problems for the U.S.: increasing income inequality and the disappearing middle class--problems that can't be solved, and will actually be exacerbated, by lowering taxes on the wealthy and shredding the social safety net.

In sum, Krugman has for several years now offered a consistent, well-reasoned and, it turns out, prescient repudiation of the long-running disaster that is Reagonism.

God bless Paul Krugman. He's one of the best things going for this messed up country these days.

Spelling correction: that's "Reaganism," as in "Ronald Reagan." Horrible president, but he still deserves to have his name spelled correctly.

Then how much shall we borrow Richard? Spending great gobs more than you bring in works great, until it doesn't.

Krugman lost me when he became more interested in politics than economics.

Krugman won his Nobel for his analysis of the role of globalization and international trade as engines of prosperity. That's the inconvenient truth he now disavows. No wonder only the Kool-Aid drinkers find his political commentary persuasive.

A Nobel prize doesn't represent or convey or acknowledge or reward magical godlike power and vision to its supposed recepients. Whole thing is a canard now. Never used to be but it is now.

"He was awarded the Nobel Prize in economics"

So what Obama got the peace prize for doing nothing and Arafat got one also.

I guess my issue with Krugman is that the solution to every problem is more govt intervention. It really doesn't work in the long run and in the short run tends to make bad situation a little worse but a lot longer.

Now that he says we are becoming Japan who has been in recession for 20 years, I am getting scared if his record is that good at prediction.

I can just hear Steve Novick and Chuck Sheketoff now: "All we need to do is reduce the $125,000/$250,000 limit to $50,000/$100,000. It's only fair."

Nope. Steve Novick will only suggest to tax people down to $77,000 per year. Just so happens that his new gig as policy wonk for some government dept pays $77,000 per year.

Sorry Richard, if you go dig up the articles you'll see Krugman is a political hack who gets lucky or makes calls that most folks have already seen (they're just not getting/able to get the message out).

...and for the record Reagan raised taxes 7 of his 8 years in office and the deficit still ballooned.

one way or another, taxes on the wealthy will go up and govt. spending will have to start being chopped. defense spending will have to be cut drastically. krugman has been more right than wrong. many european countries are far worse off than the USA when it comes to percentage of debt. ya have to remember we went from a $15 trillion economy at the start of bush 43 to $13 trillion by the time he left office. not too many folks realize that obama's tax cut in the stimulus bill was larger than bush's tax cuts and even bigger than reagans but if you account for inflation, reagan's was bigger.

i don't have any answers but i would love for alan greenspan to go away. he's been riding paul volkers jet stream for about 30 years now. enough is enough.

Well, JS, Richard actually did dig up the articles about Krugman's positions and offered specific examples of consistency, logic and accurate predictions. Your two lines of "rebuttal" are empty.

The notion that Krugman is a "political hack" is patently absurd. It's just an offhand insult that I probably shouldn't waste my time answering, but I will.

Krugman does not have some kind of unprincipled allegiance to particular political figures or parties, which I assume is what's meant by the term "hack." He has, most notably, often been a critic of Obama (too harsh a critic, in my opinion) because he sees the President as too willing to compromise with an opposition party that has no interest at this point in history in serving the interests of the majority of Americans. Krugman thought that the stimulus legislation, for instance, didn't channel enough money into creating productive jobs, but relied too heavily on tax cuts, which are always favored by Republicans. And though Krugman supported the health care legislation on balance, he thought it went too far in preserving the interests of insurance and drug companies, and therefore will do too little in reducing health care costs and making access to health care truly universal.

More generally, Krugman is by no means a radical left-wing economist. He believes in capitalism and the value of relatively free markets, but he sees--as so much of history and recent economic catastrophes have made vividly clear--that powerful businesses need to be prevented from running roughshod over the interests of comparatively powerless individuals. That's where government regulation comes in; that's where democracy comes in. And that's what the many politicians and individuals who continue to believe in Reagan's destructive gospel of greed is good and government is bad fail to acknowledge.

Basically, Krugman believes in democracy and economic justice.

If you disagree with Krugman's premises and reasoning and want to argue against him on the merits of what he writes, have at it. But no one is attempting that here, so his critics come across as mere hacks.

In answer to Snards question--which seems to be, basically, How much borrowed money should we spend and when should the spending stop?--I don't know exactly. I'd say that the government should spend enough money in enough productive ways to get unemployment way down and tax revenues up. When the economy is on a solid footing, taxes should be increased on the upper-middle and upper classes, and some forms of spending should be reduced--most notably, military spending. The U.S. cannot afford to have a military budget that exceeds that of the rest of the world combined. We probably can't afford to be an imperial power.

And if we want to be a decent and just society, we can't afford to eliminate programs designed to educate our children, provide access to health care, maintain a healthy environment, and protect ourselves from extreme poverty.

Here's a perfect example of Oregon government spending.


The Oregon Department of Transportation has negotiated the purchase of two new passenger trains from Talgo-America. Each train seats 285...which cost $36.6 million, will be assembled at a new Talgo plant in Wisconsin...By pooling the train purchase with Wisconsin, Oregon saved about $6 million...sustain 73 Oregon jobs...more than 186,000 passengers rode trains in 2008

OK, so the state-issued press release looks great. Now let's crunch those numbers.


Page 2:

Train 500 Eugene-Portland - 2,043 riders, or an average of 73 per day (remember, these trains have 285 seats.)

Train 504 Eugene-Portland - 2,055 riders, or 73 per day.

Train 507 Portland-Eugene - 1,869 riders, or 67 per day.

Train 509 Portland-Eugene - 1,724 riders, or 62 per day.

At its peak, the train carried 73 riders, which is a load factor of 26%. In other words, the "environmentally friendly mode of transport" was hauling around a LOT of dead weight - this train has seven regular coaches and two business class coaches - the entire ridership was in just two cars. Plus it hauled around a "power car", a baggage car, a table car and a cafe/bistro car with a crew of six (Engineer, Conductor, Assistant Conductor, Lead Service Attendant, Service Attendant, Talgo Technician).

According to the EPA, motorcoaches (i.e. Greyhound) actually expel fewer carbon emissions than a train - in part, because many Amtrak trains simply aren't full and thus pull a lot of dead weight; while Greyhound (as a private business) is loathe to run empty buses around for the heck of it. Oregon could have provided the same level and quality of service by replacing each trainset with two buses at a cost of about $450,000 each, requiring just one driver, and no service personnel, no mechanic; and hauled people up and down I-5 much more efficiently and environmentally friendly. Heck, Oregon could actually INCREASE service because these buses could make round-trips throughout the day, instead of two very poorly timed trips in the very early morning and late evening, and only to Portland in the morning/to Eugene in the evening, shutting out any possibilty of Portland residents needing to go to Eugene (or Albany, or Salem) for the day.

Now here's the real kicker - the "jobs" scenario. So Amtrak supports 73 jobs. The fact is that very few of those jobs would be impacted by going to buses. Why? Well, the engineer/conductors are indeed Oregon, and they could either continue on with Amtrak on other trains (i.e. they could still be based out of Portland, earning Oregon income, but work a run into Washington); they could drive buses; or they could work with another railroad. The service attendants and Talgo Tech are Seattle based; they would presumably work Seattle-Portland trains. The maintenance for the trains are all done in Seattle. So none of the on-board jobs would be lost.

Stations? Well, people would still need to buy tickets, so the station agents' jobs would still be needed to sell tickets.

The buses would need to be maintained, and they would be maintained right here in Oregon, not up in Seattle.

And it should also be noted that Oregon already "supports" bus operations in conjunction with Amtrak service in the state; while the state helps with advertising, the buses receive no state subsidy funding; and in fact the buses are all privately owned and operated, and pay weight-mile tax, income tax, property tax, etc. - like any other business (but not Amtrak).

Now, you know why Oregon doesn't have any money. It would rather spend a lot of money for a non-taxpaying entity to blow it and require a subsidy, than for a private company to make money, AND pay taxes, without requiring a handout.

the size of govt continues to grow.the all funds budget grew from 48 to 54 billion so tell me where the shortfall is because i dont see a shortfall?

It's because those slippery rich people are "living in" Washington or Nevada 183 days every year.

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