Pennsylvania Governor Ed Rendell sees a federal stimulus package and bailout of the states as both a fix to Pennsylvania’s current budget crunch and as a tool to revitalize the economy. Pennsylvania faces a revenue shortfall of $2.3 billion, according to Rendell’s latest guestimate. His proposed fix relies on $450 million from a federal stimulus package. However, a look at recent Pennsylvania spending shows why a federal bailout of the states is bad policy. Under Governor Rendell, Pennsylvania state spending increased 35.8%, well exceeding the rate of inflation of 17.4%. …
