January 2009

Michael Gerson has the full story in the Washington Post. Things are rough when a gay Democrat-leaning executive doing great humanitarian work gets thrown out by Obama’s lackeys.

Instapundit linked to the WPO op-ed describing this shameful episode so it will get even wider exposure.


1. The only things government stimulus packages stimulate are the minds of politicians as they figure out how to waste your money on pork while simultaneously rewarding their donors.

2. Government bail-out packages for states, banks and public companies rob prudent Peter to pay profligate Paul.

The WSJ got it right:

The states with the biggest deficits tend to be the most profligate. California has by far the biggest gap — $40 billion — thanks in part to a 40% increase in spending over the last five years. Arizona, Florida and Nevada also have deficits of roughly 20% of their operating budget; each of these states allowed their expenditures to grow by more than 50% faster than the average state budget over the last decade.

New York politicians are confronting an estimated $12 billion deficit. But New York’s government has annual outlays that are $1,000 a year more per family than in the average state. New York would have a $5 billion surplus if it simply cut its spending to the 50-state norm. New Jersey has added some 58,000 employees to its public payrolls since 2001. For every new private sector job in the state, Trenton has added about 15, according to the U.S. Department of Labor.

A federal bailout for these distressed states means redistributing income to these big spenders from the most fiscally responsible states. Federal aid also creates a disconnect between the people who pay for the local services and those who benefit from them. Under Mr. Obama’s plan, people in Mississippi will wind up paying for swimming pools in California, taxpayers in Colorado will pay for the sewer system in Detroit, and residents of Arkansas will underwrite health care subsidies in Philadelphia.

This creates an incentive for state and local officials to pad their budgets as their lobbyists race to capture as many federal dollars as they can. One especially ill-designed idea from the Obama Administration is to allow the federal government to pay a greater share of state Medicaid costs. So instead of reforming policy to slow the stampeding cost of medical care, states will have an incentive to spend lavishly, because every health-care dollar lures more money from Washington.

Why be prudent when the Federal government provides incentives to be profligate? Maybe because that is a sure way to sink the ship of state.

This AP report tells the story:

WASHINGTON (AP) — House Democrats unveiled an $825 billion economic recovery bill Thursday, unprecedented in its scale and reach, that would provide an enormous infusion of public spending in hopes of kick-starting the sagging economy.
The legislation — two-thirds spending and one-third tax cuts — would provide help for the poor and unemployed and hand out huge grants for local schools and state governments, among its many provisions.
President-elect Barack Obama said it would fulfill his promise of creating or preserving more than 3 million jobs. But Republicans calculated that would equal as much as $275,000 per job.

Yep, $825,000,000,000 divided by 3,000,000 = $275,000. Republicans can do simple math. But the package is economic insanity. Obama is effectively forcing each household in America to contribute $8,250 towards his stimulus package. We’ll pay for it one way or another, too. Taxes must go up, which will wipe out any of the stimulatory effects of the package. Deficits will increase, putting even more pressure on future generations. Inflation will return to steal away our savings.