It’s bad enough that California’s gas tax is among the highest in the nation. It’s even worse that the gas tax goes up whenever gas prices rise.

Today I released data showing that high gas prices have resulted in a record windfall for government at the expense of California consumers.

California motorists paid a record $8.3 billion in state and local fuel taxes during the 2011-12 fiscal year.

From July 1, 2011 to June 30, 2012, the California State Board of Equalization collected $6.9 billion in motor vehicle fuel taxes, up from $6.7 billion the prior year. Excise tax revenues accounted for $5.2 billion, while sales tax revenues accounted for $1.7 billion.

Over the same time period, the state collected $1.4 billion in diesel fuel taxes, up from $1.2 billion the prior year. Excise tax revenues accounted for $343 million, while sales tax revenues accounted for $1.1 billion.

… Read More

A World of Debt: It is no surprise to readers of these pages that we have a debt, spending, deficit and growth problem in the United States today. What you may not know, however, is that the rest of the developed world is suffering from the same malaise, albeit to different degrees. And, the causes of said malaise are the same the world over, again with variations only in degree. But, what is really disturbing is that governments around the world seem to be implementing exactly the same “solution” for the debt, spending, deficit and growth problems that abound everywhere. It’s disturbing because this “solution” will not work – at least it won’t work without potentially severe side effects that may make the medicine as bad or even worse than the disease.

Allow me to explain.

The U.S., Japan, the U.K. and continental Europe are all currently either in recession or experiencing very slow growth. All have massive, if not record, budget deficits, and all have record debt to GDP ratios. That means that the debt issued by the respective governments is a greater share of their economies than ever before. In fact,… Read More

The final chapter….sounds dramatic, doesn’t it? I’m just taking my cue from Desperate Housewives and House and such to draw you in. Maybe this will be as big as the last episode of M*A*S*H?!

Except that I’m not going to be satisfied with cable channel reruns like those shows. No, you will continue to hear from me about a variety of matters. But, it is time to wrap up our series on how we can fix our economy.

In the previous VIII Episodes, I have talked about strategies to address the too big to fail problem, repair our deficits, and set housing, energy, health care, education, infrastructure, and manufacturing all on a path to prosperity. Most of these strategies are built upon tenets that could elicit bipartisan support. And, every single problem I’ve addressed can be successfully resolved in the United States regardless of what happens in Europe or China or anywhere else. But, before I sign off from this series, there are 3 more points I would like to make:

Absolutism Will not Work: There are some of my colleagues on the right who believe that tax cuts can cure anything. There are some on the left who believe that… Read More

Too Big to Fail: There is a lot of talk these days about the $3 billion loss at JP Morgan Chase. There is a lot of hand-wringing, concern, and investigation into what happened. We are asked about it on Capitol Hill, we have an opinion, and we all care about it. And, that is the problem. We shouldn’t have to care.

The only reason we are all in a tizzy over this is because JP Morgan is too big to fail. If Apple announced it lost $3 billion tomorrow, the shareholders, Wall Street and some trial lawyers would care, but it wouldn’t be any of Washington’s concern. That’s the way it should work with private companies. They take risks to make money. Sometimes you win and sometimes you lose.

Dodd-Frank did not fix this problem for the banks. Arguably, a provision in Dodd-Frank was part of the cause of the JP Morgan loss. Dodd-Frank requires disclosure of trading that was previously private. Hedge funds saw JP Morgan taking big positions (which just a few years ago would not have been made public) and decided to play the other side of the trade. The hedge funds won and JP Morgan lost. However, in this case, we all lost. That’s why… Read More

I mentioned in Episode V that infrastructure is important to secure and grow manufacturing. In fact, it is essential. You must be able to transmit energy, move goods and services, and have access to water and internet and all kinds of things in order to have an efficient manufacturing process. Regardless of what you are producing, infrastructure is key. And, at the risk of adding to the overusage of this trite phrase, our infrastructure is crumbling. One needs only to drive one’s car in Washington, DC or Los Angeles, California (as I do frequently) to feel that infrastructure crumbling beneath your tires. Our support systems in DC, LA, or wherever you live are in bad shape because the priorities for federal spending have shifted over the last 50 years. Social programs now eat up the bulk of government spending at the federal, state, and local levels. The cost of these social programs crowds out what used to be spent on infrastructure. In some cases, taxes or fees that were sold as “user fees” to pay for infrastructure have been diverted for social programs or used to try to maintain exorbitant government employee pensions. My home state of California has… Read More

As an addendum to my “Fix It” episodes, I thought I’d share an op-ed I wrote that was published in the Orange County Register last Friday.

The Orange County Register: Opinion CAMPBELL: Biggest National Security Threat is Debt

Conservatives should not oppose attempts to makes cuts to defense, homeland security.

By Congressman John Campbell

As conservatives, we are always trying to reduce federal spending because there is a lot of waste and inefficiency in government, because more government spending often does not result in better outcomes, and because there are many things the federal government simply should leave to “the States respectively or to the people,” as the 10th Amendment instructs.

Clearly, spending for the “common defense,” enumerated in the preamble to the Constitution, is one of the unassailed responsibilities of the federal government. No argument there.

But, why is it conservative orthodoxy to assume that defense spending is immune from waste and inefficiency or that more spending in this area alone is… Read More

As regular readers of this missive know, I am a lifelong Republican. Accordingly, I have never been to a Democrat campaign rally. That is to say at least until last week. Last Thursday, I attended one…..on the floor of the United States House of Representatives. President Obama made a special request to speak to a Joint Session of Congress and I assumed it would be a major policy address. Far from it. It was a campaign speech. There was scarcely little serious policy content present. The first indicator of this was when Obama asked us to “pass this right away”, a line which appears on the first page of an 8 page speech, before saying what was in his plan. That’s like demanding that someone buy something inside a box without telling them what is in the box. Another indicator of lack of substance was his repeated assertions that the $450 billion one-year cost of the bill would be “paid for”. He also made this assertion on the first page of his address. Three pages later he says, “It will be paid for. And here’s how: The agreement we passed in July will cut government spending by about $1 trillion over the next 10 years.… Read More

“The inherent vice of capitalism is the unequal sharing of its blessings. The inherent virtue of socialism is the equal sharing of its miseries.” – Sir Winston Churchill

Socialism Has Failed………Again: The last month has not been a good one for the now highly interconnected world economy. Certainly, we have many problems in the US, with crushing debts and deficits and no job growth or really any growth in the economy at all. Expectations that the future looks bleak add to a lack of investment and risk-taking as more and more people stick their financial heads in the sand. But, it’s even worse in Europe and other places around the world. The huge fiscal problems in countries like Greece, Portugal, Ireland, Italy and Spain may result in debt defaults and are affecting not just their growth, but ours as well.

If you look at the problems in this country and those in Europe, you find that they are really just differing degrees of the same problem. Our governments (federal, state and local) in the US have spent too much money and borrowed too much money and now don’t have enough… Read More