wsj: Don’t Bail Out My State By Governor Mark Sanford
South Carolina’s governor says more debt isn’t the answer.
I find myself in a lonely position. While many states and local governments are lining up for a bailout from Congress, I went to Washington recently to oppose such bailouts. I may be the only governor to do so.
But I suspect I’m not entirely alone, as there are a lot of taxpayers who aren’t pleased with Christmas coming early for politicians. And I hope these taxpayers make their voices heard before Democrats load up the next bailout train for states with budget deficits.
Several questions led me to oppose bailing out the states. They are worth asking, even if you supported bailing out Wall Street.
Who bails out the “bail-outor”?
Washington is short on cash these days and will borrow every dime of the $150 billion to $300 billion for the “stimulus” bill now being worked on. Federal appetites may know no bounds. But the federal government’s ability to borrow is not limitless. Already, our nation’s unfunded liabilities total $52 trillion — about $450,000 per household. There’s something very strange about issuing debt to solve a problem caused by too much debt.
Do you now have to be a financial “bad boy” to win?
Community bankers tell me that they are now at a competitive disadvantage for being careful about who to lend to, because others that were less disciplined will get a federal bailout. This is also true for states. Those that have been fiscally responsible will pay for or lose out to the big spenders. California increased spending 95% over the past 10 years (federal spending went up 71% over the same period). To bail out California now seems unfair to fiscally prudent states.
Was the economist Herb Stein wrong when he said that if something cannot go on forever, it won’t?
Medicaid grew 9.5% annually over the past 10 years. That’s unsustainable. But if Congress opens the checkbook now, there will be no reform.
In 2008 bailouts became the first resort. Over the past year the federal government has committed itself to $2.3 trillion (including the tax rebate “stimulus” checks of last February) to “improve” the economy. I don’t see how another $150 billion now will make a difference in a global slowdown. We’ve already unloaded truckloads of sugar in a vain attempt to sweeten a lake. Tossing in a Twinkie will not make the difference.
However, there is something Congress can do: free states from federal mandates. South Carolina will spend about $425 million next year meeting federal unfunded mandates. The increase in the minimum wage alone will cost the state $2.6 million and meeting Homeland Security’s REAL ID requirements will cost $8.9 million.
Based on what I saw in Washington, the bailout train is being loaded up. Taxpayers will have to speak up now to change its freight, tab or departure.
Mr. Sanford, a Republican, is the governor of South Carolina.
November 19th, 2008 at 2:12 pm
Someone once said that doing the same thing over and over again is the recipe for insanity. Kinda makes you wonder about the people our nation has sent to Washington? Can they really be this senseless, or do they have a political motive for their seemingly ridiculous policies? I’m afraid that with all the fear about the economy that is so prevalent, our legislators in Washington may consider this to be their “golden opportunity” to get more control of the private sector and advance the agenda of socialism.
Thank you so much Gov. Sanford for opposing this dangerous fiscal policy and recognizing that we are walking the economic plank by pursuing these solutions. Three cheers for the Governor!!!
November 19th, 2008 at 2:29 pm
Where were you when you could have done something about the republicans running up all this debt?!
Let’s not forget who created this mess. The REAL ID program you object to was passed by a republican congress and signed by a republican president. Clinton left office with a $500B surplus. It is conservatives themselves who have enabled and supported this economic disaster every step of the way.
Where was the outrage when you were pulling the lever for 4 more years of W?
November 19th, 2008 at 5:50 pm
Maybe Gov. Sanford could get every republican governor sign a pledge that they would accept no federal assistance with budget deficits. That would be leadership.
By the way, your guy W did not veto a single spending bill in his entire tenure. How about the party of personal responsibility starts taking some personal responsibility rather than blaming Dems for the problems they have created?
November 19th, 2008 at 7:53 pm
“By the way, your guy W did not veto a single spending bill in his entire tenure. How about the party of personal responsibility starts taking some personal responsibility rather than blaming Dems for the problems they have created?”
That’s why we lost the election. Our officials stopped acting like Conservatives.
November 19th, 2008 at 7:54 pm
The Dems did cause their share of problems and more, but Moderate Republicans deserve a full share of the blame for the problems our country faces.
November 19th, 2008 at 7:59 pm
Governor Mark Sanford has raised a legitimate concern over out-of-control bailout plans for states by the federal government. However, his views seem to be one-sided and incomplete.
Some states are facing challenging times and are in need of a rescue, not bailout, plans. Ignoring their needs can lead to a downward spiral of economic difficulties. A rescue plan, combined with clear commitment by states to take decisive action toward solving their problems, could be a wise plan.
Although the federal government ability to borrow is not limitless, in these difficult economic times, the federal government is in the best position to borrow at reasonable rates. So, federal assistance to states may be the most economical way to help states overcome difficult times. The assistance can be in the form of low interest loans, not grants.
I do fully agree with Governor Sanford that imposing unfunded federal mandates on states is counterproductive. The states are in the best position to decide on the proper action needed for their unique, changing circumstances.
November 19th, 2008 at 8:20 pm
Hannah,
I fully agree that Republicans did not act like what Conservatives claim to be about. They did not act like what Republicans claim to be either, which is basically the same thing as what Conservatives claim.
I am like Art in that I think that how widely or narrowly an individual deviates between what they claim and what they do counts for a lot in terms of credibility and integrity.
November 19th, 2008 at 9:25 pm
Hear, hear!
November 21st, 2008 at 10:00 pm
From Nov. 21 WRDW
“South Carolina employment officials are
taking steps to shore up the trust fund that pays benefits to
out-of-work residents.
The state has received a $15 million loan from the U.S. Labor
Department to supplement the remaining $64 million in the
unemployment insurance trust fund.”
So, Gov. Sanford was against a federal “bailout” before he was for it? Typical.