The hopes of receiving loan guarantees backed by the federal government to help California secure borrowing to cover short-term cash issues dissipated the moment the media started calling something that wouldn’t cost the government a dime a “bailout.”  With Democrats essentially mimicking their Republican counterparts and the rhetoric of a fiscal reckoning predominant, a solution based on massive program cuts and eliminations appears inevitable to everyone in Sacramento.  Only regular citizens – the same ones demonized by elites for daring to vote against what elites call “their own interests” – hold legitimate interests in stopping the drive to cut our way out of this crisis.  Students in Los Angeles are holding walkouts over proposed firings of teachers.  The families who would be most directly hit by canceling programs like Healthy Families (California’s SCHIP), CalWorks (serving poor families) and Cal Grants (student grants-in-aid for college) are speaking out about the real-world effects of those cuts.  And a growing movement of activists from across the political spectrum are looking to the future by trying to turn this crisis into a tipping point for a Constitutional convention to get the state onto a sounder fiscal course.

The silence from the political leadership on these fronts is deafening.  And yet, absolutely everyone knows the remedies to perpetual crisis and long-term dysfunction, remedies that too rarely cross the lips of leadership so that such opinions could actually make it to the minds of the electorate.  Evan Halper today provides some relief in this desert with an oasis of an article, explaining in clear language exactly what steps can be taken to transform California into something other than the failed state it is.  I don’t agree with all of it – Halper asserts that the richest 1% of the state contribute half of the income tax, which is simply a function of inequality and frankly irrelevant; he leaves out that the effective tax rate for the top 1% (around 7% of income) is LOWER than that for those with the state’s lowest incomes (around 11%) – but it’s still worth reading.  An excerpt:

The oft-cited waste and abuse is a problem, but the deficit is bigger than the entire state bureaucracy.

California could fire every state employee — including well-paid prison guards and university professors — close every government office, stop all travel and even cease the purchase of paper clips without closing the budget gap. The government would be gone but the deficit wouldn’t […]

The runaway spending is caused largely by an ever growing group of Californians making use of basic state services as the cost of those services escalates. Since Gov. Arnold Schwarzenegger took office, for example, the amount the state spends on Medi-Cal health insurance for the poor has grown more than 40%, from under $10 billion annually to more than $14.4 billion. Spending on community mental health services has nearly tripled, and the state’s program that provides services for the disabled leapt from a $1.6-billion annual expense to nearly $2.4 billion.

This has happened despite efforts by the state to contain costs. Primary care doctors, for example, are paid just $26 for an office visit with a Medi-Cal patient. There is no simple way to seriously limit these healthcare costs short of eliminating the benefits for hundreds of thousands of Californians.

Halper’s five steps – updating the tax structure, eliminating the 2/3 rule, reining in citizen initiatives, building a real rainy day fund and instituting a performance review – are a mixed bag IMO, but they take a legitimate, serious approach to reforming the governmental structure, coming from the position that the current system is exactly how not to run a state.  Regardless of these solutions, a debate on which we can and should have, that viewpoint makes me hopeful.  I believe people are starting to understand the intractable nature of the current process, a thought echoed by Jean Ross in her special election post-mortem:

So why do I believe that the May 19 results can be viewed as a triumph of hope over fear? I spent the better part of the last two and a half months traversing California, talking about the budget, the special election, and California’s future. From San Diego to the North Bay, I spoke before diverse audiences ranging from Orange County PTA activists to Silicon Valley community leaders, from philanthropists to East Bay nonprofit leaders and community organizers in Los Angeles. While California faces tremendous challenges – the worst economic downturn in the post-World War II era and budget crises that show little prospect of abating – I found a new level of interest, concern, and commitment to building a better future for all Californians.

While I am not going to argue that the thousands of individuals that I met are a representative sample, they do represent the best that the state has to offer. Parents who volunteer to improve the quality of their children’s schools and public education more broadly; nonprofit service providers who struggle in the face of tight budgets and rising demand to care for the state’s most vulnerable; and interested voters who got up early or stayed out late to learn the about the state’s finances, how we ended up in the mess we’re in, and how to get out. Almost universally, I met voters deeply dismayed by, but profoundly interested in fundamentally addressing, the state’s budget challenges […]

In the midst of all this doom and gloom, I found an underlying sense of optimism. The afterglow of the November election has brought new activists to the table and rekindled a belief that change is possible. There is also a sense of realism and an understanding that tough choices lie ahead. The ambitious federal efforts to stem the economic downturn, stabilize financial markets, and rein in the excesses of private markets are beginning to help voters see government as a solution to, rather than the cause of, economic malaise.

Our leaders have failed.  Our people have not.  In fact, they’re just getting started.