Friday, May 29, 2020

Massive Lockdown Induced Budget Crisis Looms in California

Downtown SanFrancisco
The bizarre lockdown of the entire state of California by Gov. Gavin Newsom, without any scientific support that lockdowns are sound, is now leading to secondary problems for the state.

State and local government revenues are collapsing and government spending at state and local levels will shrink dramatically.

While I am extremely sympathetic to the shrinking of government at all levels, the actions of the governor and local officials, such as London Breed, Libby Schaaf and Eric Garcetti, suggest that they have little ability for sound thinking. Thus, it is going to be quite the circus act to observe how these mini-Maos deal with the severe budget crises they brought on by their own doing.

The San Francisco Chronicle reports that the state alone is facing a projected $54 billion deficit through the next fiscal year, and tens of billions more in years to come, because of the pandemic-induced economic collapse.

On a local level, the city of San Francisco is likely to be especially hit hard because Breed was among the first to issue lockdown orders and her orders remain even more stringent than Newsom's orders.

The city issued more orders just yesterday, requiring mask-wearing essentially at all times outdoors, even when jogging.

Since the city receives significant revenue from tourist visits, this is a particularly odd way to encourage visits to the city, especially since more and more evidence questions the value of mask-wearing.

Indeed, this just appeared in a  The New England Journal of Medicine article (ht Martin Hill):
We know that wearing a mask outside health care facilities offers little, if any, protection from infection. Public health authorities define a significant exposure to Covid-19 as face-to-face contact within 6 feet with a patient with symptomatic Covid-19 that is sustained for at least a few minutes (and some say more than 10 minutes or even 30 minutes). The chance of catching Covid-19 from a passing interaction in a public space is therefore minimal. In many cases, the desire for widespread masking is a reflexive reaction to anxiety over the pandemic...such reactions may not be strictly logical, we are all subject to fear and anxiety, especially during times of crisis. One might argue that fear and anxiety are better countered with data and education than with a marginally beneficial mask, particularly in light of the worldwide mask shortage, but it is difficult to get clinicians to hear this message in the heat of the current crisis. 



  1. What governments run a balanced budget? I would really like to know. On a state level or larger do balanced budgets exist?

    1. Colorado is required by its constitution and the Tabor amendment to run a balanced budget.

  2. Since government has only one tool, a monopoly on the initiation of coercion, their "solution" will certainly involve force. Here comes: taxes, borrowing, or begging the federal government to use force. Instead I think a citizens-shutdown should be imposed on all government until enough savings are generated to eliminate all deficit.