Facing a huge budget deficit, the city of Los Angeles has decided to level another tax on the poor to try and recoup some of the money it lost during the financial crisis. The Metropolitan Transport Authority, facing a $204 million budget gap, will raise rates on bus and train fares in the coming months.
Although the rates will only rise by 25 cents per ride, it will have large repercussions for the vast majority of people who use public transport in Los Angeles - the working poor.
While the cutbacks will surely ease the deficit crisis in the short term, the prospect of more unemployed people and less services for those who need it most will do nothing for the long term health of the city.
The fiscal crisis in California was largely a result of the collapsing real estate market - an industry financed and ballooned by the criminal behavior of large banks on Wall St. For years, California's economy has been propped up the real estate bubble. People bought and sold each others houses adding billions of dollars to a fictional market that eventually exploded.
The banks recouped their losses at the expense of the tax payer while the working poor have had their lives made even more difficult. It's another perfect example of socialism for the rich and market discipline for the poor. Or simply capitalism, American style.