Posted on 01/01/2010 9:21:48 PM PST by Steelfish
The States and the Stimulus How a supposed boon has become a fiscal burden.
Remember how $200 billion in federal stimulus cash was supposed to save the states from fiscal calamity? Well, hold on to your paychecks, because a big story of 2010 will be how all that free money has set the states up for an even bigger mess this year and into the future.
The combined deficits of the states for 2010 and 2011 could hit $260 billion, according to a survey by the liberal Center on Budget and Policy Priorities. Ten states have a deficit, relative to the size of their expenditures, as bleak as that of near-bankrupt California. The Golden State starts the year another $6 billion in arrears despite a large income and sales tax hike last year. New York is literally down to its last dollar. Revenues are down, to be sure, but in several ways the stimulus has also made things worse.
First, in most state capitals the stimulus enticed state lawmakers to spend on new programs rather than adjusting to lean times. They added health and welfare benefits and child care programs. Now they have to pay for those additions with their own state's money.
For example, the stimulus offered $80 billion for Medicaid to cover health-care costs for unemployed workers and single workers without kids. But in 2011 most of that extra federal Medicaid money vanishes. Then states will have one million more people on Medicaid with no money to pay for it.
A few governors, such as Mitch Daniels of Indiana and Rick Perry of Texas, had the foresight to turn down their share of the $7 billion for unemployment insurance, realizing that once the federal funds run out, benefits would be unpayable.
(Excerpt) Read more at online.wsj.com ...
"Second, stimulus dollars came with strings attached that are now causing enormous budget headaches. Many environmental grants have matching requirements, so to get a federal dollar, states and cities had to spend a dollar even when they were facing huge deficits. The new construction projects built with federal funds also have federal Davis-Bacon wage requirements that raise state building costs to pay inflated union salaries."
Like giving an addict more money to buy drugs. Most of these derelict states are run by the D-Rats.
Oh Well as Libertarians say: TANSTAFL.
Gone sjust like that
Unmitigated disaster.
There is no doubt we were headed into trouble from way back ... but Congress has done nothing but make a bad situation exponentially worse.
Congress and certainly Zer0 have NO concept of unintended consequences associated with HopenChange.
He won a Nobel? Doesn’t that count for an Espy or something?
OMG! This is the scariest thing I’ve read in a long time. This is beyond bad—it’s EVIL.
A textbook example of how liberals DESTROY everything they touch.
He's a JF'nK economic retard.
I would have mentioned the MTV junk but I have no idea what they call it. Zero said we wouldn’t like his policies and sure as hell got that right.
Zer0 g0t a Norwegian N0bel, NOT 0ne fr0m Sweden.
How much will the 2009 rise in unemployemnt decrease income tax revenues? Anyone have any idea?
No problem for liberals. Just borrow money today from China that has to be repaid by our grandchildren.
We want to hear Olympia Snow and Susan Collins defend the porkulous, since they made it “bipartisan”
[Worst of all, at the behest of the public employee unions, Congress imposed “maintenance of effort” spending requirements on states. These federal laws prohibit state legislatures from cutting spending on 15 programs, from road building to welfare, if the state took even a dollar of stimulus cash for these purposes. ]
Insanity!! Public service employees should not be allowed to unionize in the first place. What a bunch of thieves!
What rats have wrought! I can’t wait for November.
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