Posted by
Steve on Monday, February 23, 2009 12:51:29 PM
Now that the Trojan Horse Pork Spending Bill has been passed and signed, some of those that were opposed to the bill are all of a sudden showing a change of heart. It is really difficult to look at billions of dollars coming to your state and telling the federal government, no. That takes a monumental amount of courage and faith in what you believe. Most of the Republican Governors are willing to accept the federal money because it relieves budget crunches.
Here in Arizona, the money will mean that there will be more money available to fund the normal budget items in the state budget for next year. That means good things for the community college budget. This is assuming that the state legislature restores the funding that they were going to take away. It will also be great for ASU. They were really facing tough budget crunches and even limiting enrollment. That is something they have never done in the past.
The problem with federal money is that it always comes with strings attached. Those strings usually lead to problems down the road, if you are not careful in how you manage those strings. Most states do not manage the strings and then the strings manage the states. The same holds true for education. When they accept federal money for anything, there are strings. The districts never allow for the strings, so the strings bite them. Then the district has to arrange things to allow for the strings that were attached to the funding. States manage their money in much the same way. They take the federal handout and do not allow for the strings. Then when the federal government reviews how the money was spent, the State has to spend additional funds to cover the strings.
We will see how the states that accept the money deal with the strings that are attached. Most states will take the money because the amounts are so large. If the funding was smaller, the states with Republican Governors would not take the money and the programs would fail. By making the dollar amounts huge, states cannot resist having large portions of their budget covered or their deficit covered by federal money. That is our position here in Arizona.
The correct position is not to ever take federal money unless you want to fund the strings. That has to be an up front decision or you get yourself in deep trouble. As a result, the best course is not to take the handout because it will rise up and bite you sooner or later.
Rick Santelli was right when he went on his rant last week. The Trojan Horse Pork Spending Bill is spending our grandchildren’s money to do absolutely nothing to help the economy. Anyone who voted for the bill should be run out of town on a rail. There is no justification to spend our grandchildren’s money to do nothing. In three or four years, this bill will have spent over $1 trillion and have nothing to show for it. The economy will be worse off for having had the bill and we will have the $1 trillion to pay off. Inflation will be on the rise because you cannot put that much money into the economy without increasing inflation. That will make everything worse less. If the people that voted for Obama knew anything about economics, there would be a tremendous revolt in this country. Unfortunately, there are few who know anything about economics and they will accept whatever the government says, especially if it is from Obama. That is, until he really screws up in their eyes.
What should have been done is give everyone tax cuts. I am not talking about the phony tax cuts the Democrats talk about. I am talking about tax cuts for the people and businesses that pay taxes. If you do not pay taxes you do not get a tax cut. That would stimulate the economy into producing new jobs at a fantastic rate with little or no inflation. You had put little to no new money into the economy. Putting money into the economy will increase inflation. Decreasing taxes on income earners will not increase the amount of inflation at all. We need to be smart in this economic mess the government got us into.
President Reagan said it best in the 1980’s when he said, “In this present crisis, government is not the solution to our problem. Government is the problem.” That is exactly the problem today. That is exactly the solution today. How come so many people cannot see that is beyond me.