Conservative Political Commentary

...anti-socialist, anti-globalist, and usually with an attempt at historical and economic context

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Tuesday, June 15, 2010

Rewarding Irresponsibility by Propping Up Failing Government Officials

Official presidential portrait of Barack Obama...Image via Wikipedia
President Barack Obama has sent a letter to Democratic leaders in Congress, asking for a $50 billion bailout of state and local governments, which would supposedly “save” the jobs of teachers, police officers, and firefighters. Pat Buchanan rightly pegs this as a “bailout of the political class,” who, Obama apparently thinks, should not have to be bothered with the task of balancing their own budgets. [1]

While Steny Hoyer did not appear enthusiastic about the idea, citing “spending fatigue,” it still might have a chance in Congress. Obama says this plan is going to support economic recovery. [2]

About all it would do is reward irresponsible behavior on the part of state officials who seem unable to understand that a state cannot continue having more outgo than revenue without facing the need to cut spending or collect more in taxes. This illustrates Obama’s full embrace of socialism. This bailout creates unjust taxpayer obligations to pay for politicians’ big mistakes, just as they paid for banks’ and auto companies’ big mistakes.

Recovery is not helped, because, just as was the case with the $787 billion-plus “stimulus,” private-sector job creation was all but missing. A strong recovery requires increased private-sector economic activity. But the Administration is against the private sector, considering each company, in the words of Lew Rockwell, “a bird to be plucked.”

Buchanan points out the following:

Obama is calling for a taxpayer rescue of the political class to which he belongs, to spare it the painful duty tens of thousands of business executives have had to perform. Private employees — 25 million of whom are out of work, underemployed or have given up looking for jobs — may be expendable, but government workers are not.

Bailouts are a bad idea, period. As a taxpayer in Texas, I don’t want to pay for California government officials’ mistakes. Besides that, there would be no corrective measures to prevent this type of “crisis” in the future. Just spend all you want on dumb projects like regulating everyone’s thermostat, and thinking up new restrictions on automobiles, TV’s, etc., teaching school children to hate Christianity but love Islam, etc., ad nauseum. Pay for it yourself, I’m not interested. What principles are violated here? Among others:

1. The private sector is the engine of the economy, not government. Bailouts of government remove money from private sector investment.
2. Bad behavior should not be rewarded.
3. If a company or nation or state government fails, let it fail. This will discourage others from making their mistakes. Otherwise, everyone expects a bailout when a financial crisis hits. Markets will recover if government doesn’t meddle and manipulate.

It’s time we recognized, as someone has suggested, that this Administration itself is a special interest that mainly acts in its own behalf and for its own benefit. They pay off political supporters, and decimate the private sector. Their goal is increased government power and a fascist-socialist political and social structure.

I hope Mr. Hoyer and his colleagues will stop this mistake before it starts. But more of Obama’s rewards for bad behavior are sure to follow.

[1] Investors Business Daily Editorials, “Buoying Bureaucracy,” 06/14/2010.

[2] Patrick J. Buchanan, “Bailouts for the Political Class?” 06/14/2010, The American Conservative.

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5 comments:

The Conservative Leftist said...

Why is "save" in quotes at the beginning of this post?

Eddie said...

Jobs saved is basically unverifiable and misleading. I suppose everyone who still has a job could say their job has been saved. If the plan referred to was going to save jobs, are they jobs that were previously saved by stimulus grants? Are they jobs that will need to be saved again when these funds run out?

The Conservative Leftist said...

You could say that the cost of saving these jobs (propping up failing governments, continuing an essentially unsustainable economic system) outweighs the benefits of doing so, but it's hard to say that we shouldn't even consider the difference between what will happen if we use federal budgets to help states pay for these jobs and the alternate reality of forcing state governments to slash jobs.

I'm not sure I completely disagree with your post (though obviously I don't hold that Obama is purposefully ruining the economy in order to execute some Soviet-style communist takeover) but I will say this: government policy is not the only thing driving deficits; it's not even the biggest thing. Underlying economic conditions are what causes big deficits, otherwise the most competent state governments would have the most balanced budgets and the least competent would have the biggest deficits.

If the welfare state were ruining our economy it wouldn't be the case that Norway and Canada and Germany have done the best out of the Western democracies at weathering the storm. There are other factors to consider. And if failing government officials were solely responsible for state deficits it wouldn't be the case that California (which receives about 79 cents in federal funding for every dollar it is taxed) would be in the worst shape right now and Nevada, which has very different policies, would be in the second worst shape.

jwesgibson said...

When Obama get's the money (not if ) and then passes it wherever, doesn't that give him a little more control over the recipients? As the saying goes "the camel's nose under the tent".

One more step toward the Federal government controlling everything?

Has they ever given out money without a hook?

http://freethinkingadult.blogspot.com/

The Conservative Leftist said...

So now we know that this post by SYML was in fact wrong. State governments had record levels of "rainy day funds" on reserve in the event of an economic recession just before our economy spiraled out of control. This fiscal responsibility has helped lessen the severity of the Bush recession, but aid to state governments is still necessary in order to eliminate the anti-stimulus of budget cuts.