An effective stimulus package must not only provide heavy assistance to state and local governments; it must also be sufficiently conditional to ensure that the Mark Sanfords of the world don’t use the money to cut taxes as well as services. As someone who worked for three governors, I can confidently point to another temptation facing state and local leaders that needs to be taken into account: the natural but completely absurd pretense that they can somehow turn their own economies around in the current global crisis. Sure, states and localities can critically influence their long-range economic prospects through a variety of policies such as educational and infrastructure investments. But federal policymakers need to ensure that their friends and enemies in state capitals and city halls are pulling in the same direction. – Ed Kilgore, thedemocraticstrategist.org
While many states and local governments are lining up for a bailout from Congress, I went to Washington recently to oppose such bailouts. Community bankers tell me that they are now at a competitive disadvantage for being careful about whom to lend to, because others that were less disciplined will get a federal bailout. This is also true for states. Over the past year the federal government has committed itself to $2.3 trillion (including the tax rebate “stimulus” checks of last February) to “improve” the economy. I don’t see how another $150 billion now will make a difference. We’ve already unloaded truckloads of sugar in a vain attempt to sweeten a lake. Tossing in a Twinkie will not make the difference. – South Carolina Gov. Mark Sanford, in the Wall Street Journal
26 Comments
The federal government, every state government, big industry, local governments and people in general need to buckle up for rough economic times ahead. Its time to stop turning to the Chinese and U.S. money printing presses for more bailout money.
I couldn’t agree more J.
We have become a nation of Pavlav’s dogs. Brace yourselves for a huge drop of the dow jones today because the Senate would not go along with the Detroit bailout. Then they will pass the damm thing next week to save us from a total economic collapse. The dow will rebound and everybody will smile.
The huge democratically controlled cities and states are the ones with their hands out.
I think it’s time to samurai some greedy hands.
Not bailing out the auto industry will not cause economic collapse.
Bailing them out will simply prolong the enevitable death of these companies.
No one should be receiving any of this FREE MONEY!!!
Where the heck does this give-away program end?
Good grief my great, great, great, great, great, great grandchildren will be paying for it!!!!
(did I mention great?)
I think it’s time to call it.
Trickle down economics is a failure.
Restore the income tax tables to pre Reagan levels.
Perhaps we should remember all the unfunded mandates the Republic Party Congress since the days of Newtie Gingrich forced on the states, simply preserve low federal income taxes for the Über-Riche.
“Then they will pass the damm thing next week to save us from a total economic collapse. The dow will rebound and everybody will smile.”
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I think you are right Chris. The Senate will pass it or the administration will use some of the 700 freaking billion bailout Congress already appropriated. If they are going to do it, that would be a better idea than new money.
Bailout the states? Nope, they have their own authority to tax.
“Bailout the states? Nope, they have their own authority to tax.”
Why don’t they use the zillions from the tobacco lawsuits?
Oh. It’s already been blown on things other than why they said they sued.
Previous Economic Stimulus package proved that trickle UP economic’s didn’t do squat to help the economy and failed to create any jobs.
Anyone want to take bets on Pelosi’s next one?
Perhaps we should remember all the unfunded mandates the Democrat controlled majority in this Congress has passed.
New obscene records of trillions approved by the democrats. More unfunded mandates promised by Obama to come.
Both sides as usual and always: are responsible for this mess.
The leadership in both parties WANT us pointing at each other.
That’s their game to maintain the status quo.
No change.
Face it; everyone would be tickled to get a little stimulus, the financial sector, heavy industry, the oil companies, the pool halls, the states, cities, towns, even us ordinary taxpayers. The problem is that congress can only beg borrow or steal so much stimulationary material, and in true political fashion, the priorities are determined by campaign donations. Them that has, gives, and them that gives, gits. I’m afraid that not only are us regular citizens are pretty far down on the tickle list, but that what little stimulus we’ve already got will go to excite those higher up the donation scale.
What we need to do is cut the rich folks taxes some more. In fact, if the rich folk don’t pay any taxes, they will have more money to spend and the economy will be stimulated. In fact, the poor are so dumb, or they would not be poor, that we should tax the poor more, give the money to the rich to spend more wisely. (This is the day’s lesson in republican economics as taught by Bush who gave us the depression 2008 style.)
I listed several items that the state could easily cut from its budget yesterday, the handout to airtran or ending econ development programs that no one knows how much they even work and just cut businesses taxes accordingly, not jailing victimless crime criminals which looks like it will happen since the public defenders office is broke and not taking any cases. Switching lottery funds away from econ dev and put it in education
The whole thing is a mess. Unfortunately a conscious decision was deliberately made during the early 2000s to run up huge deficits during a time we should have been ’saving for a rainy day.’ Now that the binge has come crashing down we are saddled with that massive debt that was deliberately run up by those in charge during that time.
Anyone with even the most basic knowledge of either micro or macro economics knows that one should run surpluses during good times so that there would be resources in place to cover lean times. (Wasn’t it David in the Torah who advised that?) Then we could use deficit spending now to build up our infrastructure in this country. Not handouts. Not make-work. Projects that need to be done – roads, bridges, electric transmission grid, etc.
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fleettwood
Posted December 12, 2008 at 8:53 am | Permalink
“Bailout the states? Nope, they have their own authority to tax.”
Why don’t they use the zillions from the tobacco lawsuits?
Oh. It’s already been blown on things other than why they said they sued.
True, but I can almost guarantee you that many states are going to jack up the taxes on tobacco, smokers don’t lobby, and its one of the few taxes that even the most ardent conservative can support
And the states should opt out of all federal mandates that aren’t funded
BTH, the state and the city are both supposed to have rainy day funds for just such cases.
Actually as far as I know the City is fine.
TP,
True, you can always jack up the tobacco taxes, but at some point people will either quit smoking or quit paying the tax (bootleg cigarettes), and then the revenue dries up. The legislature won’t raise them too near that tipping point. The problem with sin taxes is that they leave the state with a vested interest in keeping people sinning.
Tom – I agree – the states/cities should. Unfortunateky they don’t. My comments were directed at all levels of government.
When ks. runs surpluses, repubs first thoughts are further tax cuts for businesses. Then when the economy turns south the tax base has contracted, so the repubs come back with taxes on the masses, or on ’sin’ taxes’.
Phantom,
And your point?
From Yahoo News,,,,,
Perhaps a good indication of at LEAST PART of the problem
Good Time for Government Work
“Some affluent communities, however, may emerge from this recession relatively unscathed. Places like Potomac, Md., and McLean, Va., whose populations consist primarily of government officials–jobs that tend to remain safe during economic downturns–will fare better.”
Looks like I shuda took that there gummit job when I had a chance. Gummit people always look after theyselves fust.
Dennis
The obvious choice for “Car Czar” is Ralph Nader. It would serve two functions; it will terrify the auto execs and it will give us citizens real insight into whether or not Nader knows what he’s talking about.