That’s why the best booster shot for this recovery and the next would be to allow states to borrow from the Treasury during recessions. We did this for Wall Street and Detroit, fending off disaster. It’s even more important for states.
Here’s how this would work. States already receive regular federal matching grants to help pay for Medicaid, welfare, highway construction programs and more. For instance, the federal government pays a share of state Medicaid costs, from 50 percent to more than 75 percent, depending on a state’s wealth. The matching rates were temporarily sweetened by last year’s stimulus.
But Congress should pass legislation that would allow a state to simply get an “advance” on these future federal dollars expected from entitlement programs. The advance could then be used for regional stimulus, to continue state services and to hasten our recovery.
Lest there be any doubt, I do not agree with this piece. But it is important to consider and it illustrates just how bad many states budget situations really are.
If government workers were compensated at the same rate as private-sector workers doing similar jobs … most state budgets would be in balance or moderate surplus. High-level professionals are generally compensated more poorly by government than the private sector, but they are few enough (compared to all the other workers) that it does not offset the 40 to 50% premium paid to most ordinary personnel.
Government has a [i]SPENDING[/i] problem, and even more borrowing does not address it. Why should federal taxpayers become yet greater enablers of utterly irresponsible spending at the state level? Especially since it would reward irresponsible states like Illinois, New York, and California, creating a relative disadvantage to responsible states like Texas.
In Upstate New York “getting a N.Y. State job” has for many years been considered a path to a stable and “good paying” earning status, job security (you reallly have to be ‘bad’ to be terminated and the state employee unions are notoriously supportive of mediocre employees), great vacations and and sick leave, a very good medical plan, and a comfortable retirement with medical benefits. All of this at the taxpayers’ expense.
To be sure, there are some really good state employees, but the reality is that the state government is overstaffed, its employees are overpaid for what they do, and when anyone tries to improve the efficiency of state government, its employees as a normnative group, are an obstructive bunch of cry babies.
This would be another nail in the coffin of the American federal system. The states have an obligation to support themselves without Federal Government redristribution. A lot of these so called state obligtions were forced on the states anyway as unfunded Federal mandates. Quite simply the Feds should get off our backs and be the limited government it is supposed to be under the Constitution. And freed up tax money can go from the taxpayers to the states in which they live.
I personnaly have a REAL problem with bailing out California. I have a real problem with bailing out any state, but especially Caliofornia. If California got rid of public employee unions, got rid of the myriad of useless public jobs and stopped giving welfare and education to illegals, they could solve their problem overnight. Ah, but you say, they can’t get rid of public employees’ union contracts. Well, they can. The bankruptcy code allows a state to declare bankruptcy. All they have to do is tell the unions they have two options–renegotiate, or be disbanded by the bankruptcy court. As to the other two, it just takes political will and leadership, neither of which has come out of California anytime recently.
Isn’t this like the “payday loans” that people complain about as being used to victimize the poor? I saw a very interesting study yesterday (http://www.examiner.com/x-40986-Salt-Lake-City-Page-One-Examiner~y2010m7d7-Study-shows-illegal-immigrants-cost-US-113-billion-a-year-52-billion-to-educate-their-children) that show the costs of illegal immigration that are born by the various states. In both California and N.Y., the annual costs of illegal immigrants are more than their total annual budget deficits.
I think the North Dakota model of prudent management is a better plan: http://tinyurl.com/29j9ev8 The are running an $800M surplus over two years.
Aside from the illegal immigrant costs, part of our problems here in Sunny California is the well-known fact that our state and public employees’ retirement pensions are out of control. Police and firefighters’ pensions are sky-high compared to those in private industry, and sweetheart contracts are common, with employees often able to retire at age 40-45 with pensions very nearly equal to their salaries……and thus enabling many to work at other occupations while they collect their pensions until they reach 65, when they become eligible for Social Security and Medicare. And the rest of us are stuck with the taxes used to pay these people. I wish the Armed Services had such a sweetheart deal!
And let’s not forget the outrageous pensions to which our state legislators feel entitled after just two or three terms in office.
Oh my. If states like California, New York, and Massachusetts had greater access to the U.S. Treasury it would be like trying to control sweets-starved kids in a candy store! We’ve got a budget deficit here in Texas, too, but departments are having to cut their budgets like crazy, and it’s not as bad as it could be if big-spenders were running the show. (I am quite disgusted with Gov. Goodhair’s living arrangements, however, since the guv’s mansion fire.)
#10, I think more accurately it would be like trying to control crack addicts.
Again, and I have harped on this here and other places before…bailing out States (or businesses or countries) only potentially works if its a liquidity crisis, i.e. somehow the liquid capital that keeps the system working dries up such as a run on the banks or toxic loan asset debacle.
But what we have in places like Illinois and California is outright mismanagement leading to a insolvency crisis. They just can’t pay their bills as the system stands, and only deep rooted changes to the entire system are going to potentially fix the problems. Throwing liquid money into the system does not go after the root problems that caused the insolvency crisis. In fact, it makes matters worse because the states become wards of the federal government, and feel thereafter entitled to bailouts anytime their governing bodies can’t get their act together and do what needs to be done to balance a budget. They know if they can get Dear Old Dad to fork over more money when their allowance is gone, there is no incentive to change.
I really think Bankruptcy is the only option to possibly keep them afloat long term. Bankruptcy allows them to reorganize and try to correct the system to manageable economic levels because leaving it to these individual state governments is obviously no longer possible.
The Great State of Illinois could use about 78 BILLION with a B
dollars to cover the current deficit in state pension fund programs.
And, of course, to pay the current, outstanding, and arrears bills
of the state government, which, of course, wants an increase in
the state income tax. One thinks of Dr. Seuss:
Yes, Dr. Seuss who said: “This mess is to big and so broad and so
tall, we cannot clearn it up, not ever at all.”
By and large, the wealthier states – such as NY, California etc, fund many of the corporate welfare in more rural states. Blue states pay more federal taxes than red states.
It is a creative idea. Government does not have a “spending problem.” Compared to the rest of the developed nations, we are frugal and mean. If anything, it is precisely spending more that will give the private sector confidence. It’s called the multiplier effect.
Personally, I want government people to be paid well because I want smart people in government. I want people who would normally work for profit to find some comfort in working for the public good.
Otherwise, we’ll have mediocre administrators. If we think government is always bad, we’ll elect and select poor public servants.
Which was exactly what some conservatives wanted. Their tactic: hire the worst people in government. And then blame government for the problems.
“I personnaly have a REAL problem with bailing out California. I have a real problem with bailing out any state, but especially Caliofornia. If California got rid of public employee unions, got rid of the myriad of useless public jobs and stopped giving welfare and education to illegals, they could solve their problem overnight. ”
David Keller, my girlfriend spent two weeks serving in a mobile pharmacy sponsored by local churches last month ministering to migrant farm workers in South Georgia. These particular men live in shanties while working 8am – 2am in the fields picking 25c a bucket of produce. They gratefully accepted the old t-shirts, pants, underwear and socks that were given them. The medical assistance was limited and the drugs even more so. A man with a herniated spinal disc gratefully accepted ibuprofen to dull the pain so that he could continue providing for his family. Another received iron supplements for an anemia that may be cancer. These men will not step into an ER for fear of the authorities. And yet thanklessly they pick fruit to put on your table. One of the men, an undocumented worker died. The farmers have no way to alert his family.
Job who was called righteous said: “I was a father to the needy; I took up the case of the stranger.”
I wonder how God will judge us one day?
The farmers that hire these illegal immigrants are criminals. They should be prosecuted. I feel sorry for the illegal immigrant workers. They should never have broken the law and come to the US. The consequences of their law breaking are truly heart rending. That poor man whose family can’t be notified because he broke the law to come here and take a job from a US teen (I used to work as a teen for agricultural minimum wage – less than regular minimum wage – picking apples and later at a tree nursery). The teen gets no entry level job experience or money, and the illegal immigrant gets a sub-standard wage, lousy working conditions, and a nameless grave.
This sinful support of illegal immigration MUST stop! We must prosecute those that hire illegal immigrants. We must deport those illegal immigrants that are discovered here. We must control the borders to stop the flow of this terrible sinful practice!!!
Come, come: the families of most every person in this country came here “illegally.” They either came at the consternation of the native americans and forcibly stole their land or they rebelled against the british, the authorities of the day in the most treasonous way possible (over a tax that today would look laughable).
My point is that there is no difference between your forbears Sick and Tired, and these people. Both came in desperation for a better life. Yours stole land and enslaved others. These ones work for you at a slave’s salary. Get off your hobby horse of sanctimony. Most of these people have no way of becoming citizens and you know that. So quieten down about illegality = sin. The equation looks more like American laws are cruel and sinful. Like Rachel, I will personally help these people escape evasion. One thing of which I am certain: doing so I will definitely entertain angels unawares.
18, if you want open borders just say so. And you can get off your sanctimony as you preach law breaking.
Brother Michael: Do you advocate obedience to all laws, or only those you like? Did you July 4th celebrate law-breaking also (i.e., the violent overthrow of the british government God instituted in this country)?
I’m sorry, I see just incredible hypocrisy in your argument. You didn’t respond to whether you and your forbears should be here or not. How can you pontificate on the status of others?
You are right, I advocate just law-breaking. Martin Luther King, Rosa Parks, Martin Niemoller, and Operation Rescue are heroes of mine.
21, Thanks for your response. I see no point in continuing this discussion.