1) Structural deficits are problematic over the long term, and if California had the ability to run a deficit, that ability would not make the state’s bigger issues go away. But while a crisis is good for creating the will to force change, a crisis is also a pretty rotten time to actually make changes, since there’s no general economic surplus to use as a cushion. And there’s nothing wrong with running deficits in an of themselves. Just as a matter of broader public policy, why not allow states to run deficits, within certain limits — to have a stronger version of the stability and growth pact. If one doesn’t want states to have to make nasty pro-cyclical cuts in recessions, and if one doesn’t want to set up a regular system of federal bail-outs for troubled states, then why not give them a little flexibility (with the proviso that if the ten-year moving average of the deficit isn’t zero, federal money destined for state spending will instead be used to pay state debts)?

2) What’s the right amount of democracy? Progressives have become increasingly incensed at the anti-majoritarian rules of the Senate, which seem specially designed to avert popular, and often sensible, progressive legislation. On the other hand: ballot initiatives.