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  • Morning Bell: Stop Digging

    Since it appears more and more likely that Congress will approve another economic stimulus package within the next couple of months, every special-interest group under the sun is swarming Capitol Hill for handouts. Yesterday it was the nation’s governors turn as Govs. David Patterson (D-NY) and Jon Corzine (D-NJ) came to the House Ways and Means Committee on their knees begging for cash. Patterson compared the current financial crisis to 9/11 and asked Congress for “a direct injection of federal aid to state budgets.” Corzine implored, “The federal government ignores state and local governments at serious peril.”

    If only that was the case. As the lone dissenter on the panel, Gov. Mark Sanford (R-SC), pointed out the federal government has been doing anything but ignoring states. Federally imposed unfunded mandates — including No Child Left Behind, prescription drug regulations and raising the minimum wage — have cost states $131 billion over the last four years. Instead of more federal money and control, Sanford said: “In short, I’d ask members of the committee to simply give the states more freedom. Give us more flexibility. Give us more in the way of control over the dollars we already have and less in the way of costs. Give us more options, not more money with federal strings attached.”

    Sanford’s principled refusal of a federal bailout for his state did not end there. His entire testimony is worth a read, but here are some highlights:

    The situation we’re now in did not develop overnight, and in the same way it won’t be cured by morning. As the old saying goes, the first step to getting out of a hole is to quit digging. … Our national debt is now over $10 trillion — more than $4 trillion higher than when I left Congress at the end of 2000. … In fact, if this $150 billion stimulus package is passed, this year’s budget deficit could top $1 trillion — adding to the over $10 trillion national debt and making it 70% of a roughly $14 trillion economy. …

    Simply throwing money into the marketplace in the hope that something positive will happen ignores the fact that the government has already put over $2 trillion into the system this year using various bailouts and stimulus packages: including $168 million in direct taxpayer rebates this past spring; an $850 billion bailout last month that cost more than we spend on defense or Social Security or Medicaid and Medicare annually; and myriad loans and partial nationalizations of institutions like Freddie Mac and Fannie Mae, JPMorgan Chase, Bear Sterns and AIG. … This year’s $2 trillion plus in bailouts and handouts seems that much more momentous when you consider that federal tax revenues last year were only $2.57 trillion. Simple math demands we ask ourselves if $2 trillion did not ward off the crisis in confidence we’re currently experiencing, then how much can $150 billion more help? …

    Essentially, you’d be transferring taxpayer dollars out of the frying pan — the federal government — and into the fire — the states themselves. I think this stimulus would exacerbate the clearly unsustainable spending trends of states, which has gone up 124% over the past 10 years vs. federal government spending growth of 83%. … There seems to be no consequence, and indeed a reward, for unsustainable spending growth by states. In effect, sending $150 billion more to states would produce another layer of moral hazard — already laid bare at the corporate, individual and federal levels in recent years.

    We couldn’t have said it better ourselves.

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    12 Responses to Morning Bell: Stop Digging

    1. Ken, Venice, Florida says:

      It used to be the case that since states couldn't print money, they pretty much had to pay their own bills with bond issues or taxes or fees.

      But now it seems they've hopped onto the running board of the Federal money truck and expect dollars to be printed for them too.

      It's all going to mean a bigger drop in the value of a dollar.

      Remember when a hot dog at the show cost .25? Now it's $4.00.

      At that rate in another 40 years it will be $64.00.

      We have to get Ron Paul's financial philosophy into play, or there won't be anything left for our children from our savings but a college loan to pay off for themselves.

      It's really time now to ditch the Fed, enact the gold standard, withdraw from all the trade organizations, U.N., NATO, discontinue foreign aid and foreign adventurism, and settle down and attend to our own knitting. The Fair Tax would be a great start toward making things right. But no..we reject Paul in the primaries, Bob Barr in the election, and elect one of two candidates who want to continue to feed the inflationary monster with money out of thin air.

      Is there no sanity anywhere among the "elite" people in power? Is Greenspan really confused about what caused this mess, as he said?

      Beam me up, Scotty!

    2. Walt in El Paso, TX says:

      Good article and well know to conservatives. Let the general public know by buying adds in the main stream medica.

    3. Frederick Kitchell says:

      Totally agree with the Gov. Stanford!

      States and Federal Government(all branches) are now convinced they are best qualified to spend as much of the peoples money as they can possibly collect thru taxes and any other financial instruments.

    4. Mayme, NY says:

      Why couldn't we get the fed under control in the last 8 years? Why didn't we get more drilling going? Where have Conservatives been for the last two sessions? WHY do we have to give government over to the Democrats to get the budget balanced?

    5. Mark in Deland Flori says:

      It seems to me we have to re-build the conservative movement in this country. Both parties are like pigs lined up at the slop trough, there is zero fiscal discipline, no accountability and no thought for tomorrow. What a tragedy that in 1994 genuine fiscal conservative were elected in mass numbers but ultimately behaved like the spend crowd. The government was not and is not designed to solve any and every problem, it was designed to provide the freedom and liberty to allow us to solve problems and better our lives.

    6. Wesley, Sweeny Texas says:

      Someone needs to hit the "reset" button on government and start all over with the original Constitution- no interpretation necessary.Then we need to oust everyone from congress and start over with people from the business sector who know how to keep a budget- no lawyers allowed. They do not need to know how make laws.

    7. Dave McDuffie, lagun says:

      George Bush is the biggest disappointment of my life, politically speaking. He contributed to the complete destruction of the republican party, and allowed the democrats to get away with outright theft of our tax dollars in the Fannie mae/Freddie mac fiasco. Bush spent money like a drunken Kennedy-type liberal, yet he is still hated by liberals!? And now hated by many republicans as well. Clinton used to get on TV and criticize those "rascally republicans" and villanized them to the enth degree, and Bush? Nothing! Like he is not even there. And that ….wife of his proclaims her joy at all the Iraqi immigrants we are bringing here, TO SUPPORT! HUNDREDS OF THOUSANDS OF THEM! That is not what our sons and daughters died for you idiots! Our government needs to be completely dismantled and, LETS START OVER!

    8. Ken Jarvis - Las Veg says:

      My Email address is – LVKen7 at gmail dot com

      I wish someone would explain to me HOW -

      Federally imposed unfunded mandate —

      "raising the minimum wage"

      Have cost the States anything.

      We all KNOW the HF is against a Min Wage or Living Wage,

      but, come on.

    9. Dave McDuffie, lagun says:

      We NEED a minimum wage structure for entry level situations, especially for high school or college students working "part time" or for minimum skill, low level positions like buss-boy, dish washer, etc. We certainly don't need to be paying part time or in-schoolers a "living wage'! Why go to school if thats the case, we can just eliminate schools altogether if everyone gets paid a living wage.

    10. Pingback: - Are You Riled Up? - » Blog Archive » Morning Bell: Stop Digging » the Foundry

    11. Spiritof76, New Hamp says:

      The upcoming election choices represent the positioning of the deck chairs in the sinking of the Titanic, the USA.

      I agree with Gov. Sanford. It needs to go beyond that however by having to cut the federal spending deeply and reduce the size of the state governments. On top of that, we have to take away the printing press from the department of the Treasury.

      We are in such a mess because of the irresponsible Congress and their lazy segment of the American constituents. They have rigged the game so that honest, self-reliant and hardworking person that delivers value in a free market are being flogged, either through crushing taxation or through inflation with the printing press running amok or both. It is a joke that the Fed. dropped the interest rate to one percent. Just like the arbitrary minimum wage rule, arbitrary interest rate decree with a cranked up printing press will postpone the inevitable outcome- inflation. We are headed for a prolonged high inflation, high unemployment and high interest rates that will dwarf the Carter magic of 1976-80.

      The tax-paying population must rise up in revolt, refusing to pay the taxes. The businesses must shut down their businesses and lay off their employees Ala Atlas Shrugged. In order to gain cooperation of the productive segment of the population, we have to demand starting all over again. US Constitution must be made supreme. A constitutional amendment must be passed to limit the taxation of all kinds to no more than 10% of any person's earnings or something equivalent but defined clearly. Printing of the dollar bills by the Treasury must be retroactively set. That is, they can only print dollar bills that reflected the productivity gain of the previous year and can not bet on it. The judges can not legislate from the bench. If it is not explicitly written in the Constitution, the judge's ruling can not be binding. All judges can only hold one term of 5 years. Every two years, the citizens should have the right to recall any judges or Senators. We must get out of the UN and all other international entanglements- close down all the military bases overseas.

      As can be seen, short of a revolution taking us back to 1787, the country will become a socialist country, teetering between the Swedish model and the Soviet Union model. Coming to think of it, the crowd that is trying to control our government now probably chanted, "better be red than dead" in their younger days of the cold war era.

    12. Pingback: Democrat On Best Political Blogs » Blog Archive » Morning Bell: Stop Digging

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