Purse Strings
From USA Today:
The dominance of federal money is set to expand dramatically this year because tax collections are sinking while the bulk of federal stimulus aid is just starting to arrive. “This money isn’t manna from heaven. It comes with a price,” says Indiana state Sen. Jim Buck, a Republican. He worries that the federal money will leave states under greater federal control and burden future generations with debt.
Read the whole article.
For the first time, the top source of funding for states and local governments is actually the federal government. The federal government is paying 23% of the overall spending of state and local governments. Why the change? First, the recession has impacted sales and income tax receipts significantly. Second, federal stimulus funds are starting to make their way into states coffers.
All of this money comes with strings attached and makes the federal government stronger at the expense of the states. Very little of this has any basis in the Constitution and I don’t understand why the people of Minnesota are funding streetcars in Cincinnati, while we pay for new schools in Minneapolis while they have declining enrollment.
Many of the projects contained in the stimulus may be worthy. If they are, they can be paid for at the local level. It makes no sense to send our money to the feds so they can take their slice and send it back to us with terms and conditions.
Visit our states rights page to add your voice to the chorus demanding that Ohio, Kentucky, and Indiana assert their constitutional rights via the tenth amendment.
Hat tip to Econlog.
May 23rd, 2009 at 10:14 am
Why don’t you guys ever ‘Connect the Dots’ with the Iraq War? Our Empire overextended and we are in a serious mess.
You guys are whining and complaining that taxes will go up. You must have been in a coma for the last 8 years! All our war efforts are being funded from loans from China, basically like putting them on credit card, that we pay back with interest. I mean, they didn’t even include a single dime for Iraq in their budgets, but rammed through special appropriations to pay for them.
If John McCain or Porky Pig had won in November your taxes would have to go up. Do you honestly think that all the stuff that Bush/Cheney were putting on credit card wouldn’t have to be paid for eventually?
The problem now is, you have to kickstart the economy again and every economist says you need to spend more money (not by sending it overseas and blowing stuff up), but actually pumping it into your own economy.
The Iraq war hasn’t garnered a single dime or return for the common taxpayer. Sure, the military contractors are making a killing, but they all have Cayman accounts. Where’s the outrage there? Obama is at least holding them accountable for the taxes they should pay.
So, even if you have to spend more and go in more debt, you have to keep the machine moving forward.
Tea Parties (disillusioned Republicans) can’t claim fiscal responsibility anymore. Clinton was the only one in the last 30 years to run a surplus.
May 23rd, 2009 at 10:42 am
Wow, you’ve been busy Andrew. Again, I note the lack of connection between your comments and my post. Why is that?
I disagree with you about the necessity of the war. I don’t want to refight that battle because it all hinges on hindsight. In hindsight, maybe we shouldn’t have gone to war. That’s an arguable point. It is not arguable that once the decision was made to start the war, we needed to stick it out.
Anyways, what you mention about the budgeting process is typical of our political elites and it is dishonest and wrong. I stand with you in denouncing that practice.
About the economy now – you are very wrong when you say that every economist agrees. In fact, most of the economists arguing in favor of Keynesian stimulus were very much against it just a few years ago. Thinking that we need more debt and more spending is a fundimental misreading of the current economic climate. We should not be emulating the Venezuelas of the world. We need stable rules where those that take risks and invest can have confidence that they will reap their rewards. People have a very justifiable fear of the future. What the Obama administration has done to bankruptcy and contract law with respect to Chysler will have significant long term consequences.
Tea Parties can and WILL claim fiscal responsibility as an issue. We are citizens that have this crazy little idea that our politicians should be held accountable for their actions.
May 26th, 2009 at 4:09 pm
I completely agree that politicians should be held accountable for their actions, that is why I brought up the Iraq War in relation to your article about “Purse Strings”. You give a quote about the federal government gaining too much control over the states, but you fail to “connect the dots” with War.
You even glossed over it in your response to me. The Federal government sacked us with so much debt that continues to pile up (just as you have your debt clock running, check out http://costofwar.com/) Right now it is at something like 861 billion dollars and rising.
Where was the outrage when reports of Halliburton’s overcharging US taxpayers. I have yet to see any blog mention about that or the electrocution of US soldiers by contracted work from KBR on your site as well. Isn’t that shoddy work that you pitbulls should go after? I don’t see any blog comments or political actions that you intend to take for waste for fraud in the military. Do you intend to hold all waste and fraud accountable, or only the ones that are politically beneficial and advantageous?
It is a bit incredulous that you are now becoming righteous purveyors of truth who are protecting citizens. Where were you in 2000 when the projected surplus started nosediving and they refused to put in stop measures? Where were you in 2001? Where were you in 2002? Where were you in 2003? in 2004? in 2005? in 2006? in 2007? The only presidents to run deficits in the last 24 years are Republicans (the party of fiscal responsibility). Dick Cheney said after the 2004 election “Reagan proved deficits don’t matter, this is our due”. I didn’t hear any outrage, not even a whimper.
What are we to think that your Cincinnati Tea Party was formed in February of 2009? I appreciate your lack of outrage while the Republicans were putting our future on credit card, sacking Social Security and then trying to get all of our retirements invested as well. But, your anger is just about a decade late and a trillion short.