Reject austerity and inject stimulus

After all, California has a major budget crisis and all sorts of difficulties governing itself. Its initiative system allows voters to mandate specific forms of spending and to limit tax increases and as well make them harder to enact. Absent a strong federal government with the power to offset the impact of the recession and the banking crisis, how would California fare in a global financial system?

Moreover, Gov. Jerry Brown deserves credit for trying to get a handle on the California budget crisis. He’s going to the voters this fall with a referendum to raise about $8 billion in taxes to stave off furthermore cuts. Without the money, Brown says, education spending would have to be slashed beyond the cutbacks that have already taken effect.

But the metaphor is instructive because it turns on its head the usual nonsense from anti-government politicians that the United States is on the road to becoming Greece. No, we’re not. Our issues are in every way different. To the extent that the crisis in Europe has lessons for the United States, they go the other way.

First, we are lucky to have a robust federal government, which the European Union lacks. Early in the recession, the feds were able to offset problems in the country’s most troubled regions with a stimulus program. The stimulus should have been bigger, and it should have extended over a longer period. Now it helped.

Our federal system as a rule disguises the transfers that take place across state and regional lines. But because we all think of ourselves as Americans, we don’t for the most part object to them. It’s not quite like asking Germans to help Greeks or Italians.

And if congressional Republicans weren’t so determined to block near every initiative President Barack Obama puts forward, they would agree to pump more money into state governments and into infrastructure spending to speed a decline in unemployment.

As for Europe, it has gotten a reprieve from Greece’s voters, however German Chancellor Angela Merkel should not see this as a mandate for continuing current policies. I understand why Merkel is reluctant to transfer German money to Greece, Spain and Italy. Yet her approach is no longer sustainable.