As the economic crisis deepens virtually every governor in the U.S. is facing tough decisions when it comes to dealing with their state budget deficits that are expanding at a rapid clip.

In this regard there is no more important state than that of California and its actor turned governor Arnold Schwarzengger who is struggling t deal with a projected $40 billion deficit over the next two years.

When Schwarzengger was elected in 2003 his platform was based on restraining spending, not increasing taxes and less debt financing.  Well what a difference a few years make.  After being soundly defeated in his effort establish budget reform the state budget has grown to a staggering $144.5 billion – up 40% in just four years.  No wonder he has a deficit problem.

Granted Schwarzenegger has been dealing with a Democratically controlled legislature, but instead of hewing to his campaign promises he has completely caved in to the liberals wish list.

Remember that no tax increase pledge?  That’s gone out the window with his proposal to increase the state sales tax rate by 1.5 percentage points for three years which will push the overall sales tax rate to over 9% in some areas making it one of the highest in the country.  All this in the face of a nasty downturn that already has consumers keeping their wallets closed.  He also wants to triple the car tax which isn’t likely to generate as much money as he thinks with people abandoning their cars for mass transit.  Plus who is in the market for a new car these days?  Just look at the Big Three automakers begging for a taxpayer bailout if you don’t think the auto industry is in trouble.

The governor is so enamroed by his own proposals that he has been quoted saying that his tax plan will “invigorate our economy and generate jobs” and conveniently neglects that higher taxes does exactly the opposite.

Despite the fact that he thinks that tax increases are the way to solve his budget woes,  Schwarzenegger has been stymied by the Republicans in the Assembly where tax increases require a two-thirds vote to pass and the Democrats are 3 seats shy of that magic number.

What the state needs right now is the tough guy persona that Schwarzennegger portrayed in his action movies.  He should trim the budget by cutting government programs that were expanded under his watch and show some fiscal responsibility.  Except for his legacy as governor though there isn’t a lot of incentive for him to do much.  He can’t run for office again and if he can somehow finagle his way out of this budget crisis he probably will and saddle his successor with even more unpalatable choices.

The lesson here is that you can’t tax and spend your way to prosperity.

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