The California state treasurer called Wednesday on U.S. Treasury Secretary Timothy Geithner to extend debt guarantees through the Troubled Asset Relief Program to financially strapped states and local governments facing declining revenues.
The California state treasurer called Wednesday on U.S. Treasury Secretary Timothy Geithner to extend debt guarantees through the Troubled Asset Relief Program to financially strapped states and local governments facing declining revenues.
George Will mentions this in his [url=http://www.washingtonpost.com/wp-dyn/content/article/2009/05/13/AR2009051303014_pf.html]column today[/url]:
[blockquote]For the first time, neither sales nor property nor income taxes are the largest source of money for state and local governments. The federal government is. [/blockquote]
This is deeply perverting the relationship between citizens and their government, with the federal government leveraging this into control of states, counties and localities (Will gives a revolting example of how government employee unions are being shielded by Obama). When states and localities no longer are dependent on funds from their respective constituencies, they effectively become little more than administrative arms of the Central State. Troubling.
Have any TARP funds yet been used for the stated purpose, the purchase of troubled assets? Is any of this legal?
The first rule of bureacuracy of our federal government is that never, under no circumstances, for no reason whatever will any federal government entity return unused or unneeded funds to the the Treasury for the purpose of retiring federal debt. This rule applies to the Treasury as well. Our bureaucracy much rather make a huge bonfire on the Capital lawn of any unspent money before it allows a nickle of it to be spent paying down our massive debt.
Geithner’s innovation is entirely in keeping with the first law of bureaucracy.
Let me reassert what I wrote over thirty years ago;
[b]An expanding bureaucracy expands to meet the needs of an expanding bureaucracy.[/b]
The conduct of the government at all levels is disgraceful, and, in my view, deeply contrary to the most fundamental American values. The proposition that we will run deficits exceeding a trillion dollars as far as the eye can see – that this is the actually how the government is planning it – borders on treason. The near-futile attempt to service the absurd debt required could well both turn our economy into a failed Latin America-style banana republic, and place America into vassal status against some of our most implacable enemies.
[blockquote]Have any TARP funds yet been used for the stated purpose, the purchase of troubled assets?[/blockquote]
Nope, not a dime. TARP is, for all intents and purposes, a political slush fun and [url=http://article.nationalreview.com/?q=ZDE5ZTExZDljOWYyNjZlZjM4MjY5ZTgzYjFmNzc0NTg]criminal enterprise[/url].
You make an interesting point, Jeffersonian. I am also wondering if the state (small S) becomes dependent on the State (large S), will the local state government become immune to the cries of the local electorate?
From today’s George Will column: “The administration’s central activity — the political allocation of wealth and opportunity — is not merely susceptible to corruption, it is corruption.”
I can’t see how they wouldn’t, TAotF. The ability of states and localities to tax their constituents will be crowded out by the massive tax burden of the federal Leviathan, who will then transfer those funds to those states and localities for programs and projects it deems in congruence with the Central Plan. The pressure to accept those funds will be enormous, given that the jurisdiction will likely be severely underfunded if it refuses them and the strings that come with them.
At that point, it’s moot who runs for office since so much policy will be set by Washington. Every barrier to federal consolidation of power will be removed, and government more and more aloof and remote from the people.
It’s hard to remember that under the Constitution , in theory, the federal government only has limited powers. In actual practice it exercises the police powers that are the perogative of the states.
Mark Steyn has a masterpiece of a speech posted at [url=http://www.hillsdale.edu/news/imprimis/archive/issue.asp?year=2009&month=04]Hillsdale College’s site[/url] on this very subject:
[blockquote]But forget the money, the deficit, the debt, the big numbers with the 12 zeroes on the end of them. So-called fiscal conservatives often miss the point. The problem isn’t the cost. These programs would still be wrong even if Bill Gates wrote a check to cover them each month. They’re wrong because they deform the relationship between the citizen and the state. Even if there were no financial consequences, the moral and even spiritual consequences would still be fatal. That’s the stage where Europe is.
America is just beginning this process. [/blockquote]
Yes, but our Maximum Leader has put us on the bullet train. We’ll be all caught up to Europe in no time.
#11 Jeffersonian. But America has the advantage that if we get put on the bullet train, most Americans will remember what better times were like. In other words, it’s better for the frog to be tossed into boiling water than to be gradually warmed up. That is the one reason the current situation has a seriously good chance of ending up much differently in four years than if we had more cautious leadership.
But Sidney, #12, who’s going to run on the platform of the needed redirection– the Republicans?? Unless a grass roots effort on the part of the conservatives (whatever their party affiliation) is commenced immediately I don’t see how this train is to be slowed.
[blockquote]But America has the advantage that if we get put on the bullet train, most Americans will remember what better times were like. In other words, it’s better for the frog to be tossed into boiling water than to be gradually warmed up. That is the one reason the current situation has a seriously good chance of ending up much differently in four years than if we had more cautious leadership. [/blockquote]
Yes, but implement national healthcare and the pawl of the ratchet will have clicked forever. There won’t be any going back on that, any more than there is going back on Social Security or Medicare. The constituency will be cemented in place, damn the consequences. At that point, elections will be little more than what Mencken called “advanced auctions of stolen goods.”
#13,14, I’m envisioning a scenario where things get so wrecked so quickly that it’s obvious to 60% of the public what caused them. As in: hyperinflation galore, a wrecked currency and a wrecked economy with 18% unemployment. Then *everybody* will be running on the conservative line, because it will be obvious where the fault lies.
It certainly not at all clear that this is the way we’re going – but we might.
If we muddle along, with some things worse, but some signs of things getting better, then I’ll agree there’s no hope. If the statists are smart, they will do their usual incrementalism.
It only took a few years of the Confederation in the 1780s for the public’s mind to change. Things can change quickly if they are bad enough.
Now who’s laughing at the Tea Partiers? There are more Parties planned for Memorial Day and 4th of July. Please plan to attend one near you.
[blockquote]If the statists are smart, they will do their usual incrementalism. [/blockquote]
Obama saw Hillarycare die the death of a thousand cuts in 1994, and a tidal wave swamp the Democrats after. He’s not going to make the same mistake, he’s going to ramrod this.