States Want $1 Trillion In Rescue

By Justin Gardner | Related entries in Economy

The thing to keep in mind here is that the money these folks are talking about is provably needed for basic services like education, infrastructure, healthcare and many more essentials.

From Politico:

“There are states that are talking as California has of not being able to meet their financial obligations in the coming months,” New York Democratic Gov. David Paterson said on a conference call with reporters. California announced in December that all state employees would be forced to take two days of unpaid leave.

Paterson was joined by fellow Democrats, New Jersey Gov. Jon Corzine, Massachusetts Gov. Deval Patrick, Ohio Gov. Ted Strickland and Wisconsin Gov. Jim Doyle in warning that states across the country will be forced to make drastic budget cuts in the face of unprecedented deficits. [...]

Strickland added that the situation facing the state of Ohio is so dire that in order to balance his state’s budget, he would have to fund every state program at 75 percent of its current level. “If I were simply to flat fund the operations of this government, I’d end up with $7.3 billion in deficit,” he said. “We’re just trying to keep afloat.”

In order to make up for the shortfalls, Corzine said the incoming Obama administration and Congress will need to free up $1 trillion in federal spending for state assistance. “We’re all going to be Herbert Hoovers if we’re not careful here,” he said.

Obviously the alternative is to make serious cuts in social services that tens of millions depend on. But who’s in favor of that? Because ultimately the burden will be shifted to the federal government in some way since folks will need to get care one way or another.

Isn’t it smarter for the federal government to simply float the states some money to bridge the gap between now and when the economy picks back up again. Because they’ll be far more effective in spending it since it will mostly be used to fill in the deficit gaps in their budgets.


This entry was posted on Saturday, January 3rd, 2009 and is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Responses to “States Want $1 Trillion In Rescue”

  1. gljunket Says:

    How many TRILLION can the federal government print??? “….smarter for the federal government to simply float the states some money…..????” Nothing to it, right? When will the fiscal insanity that has gripped this nation completely bury it? How about the $350 billion that evaporated with no accountability that was so desperately needed to unlock the credit crisis so more people could borrow money to buy things they can’t afford, which is what caused the problem in the first place??? And the Obama New Deal that will spend our way out of a recession like FDR’s…..that turned a 3 year recession into a 10 year depression? No need for financial incentives in the Age of Entitlement!! No income, all outgo, makes a lot of sense!!

  2. Jimmy the Dhimmi Says:

    what he said ^

  3. Jeremy Says:

    “How many TRILLION can the federal government print???” – gljunket Funny! Financial revisionism. If “printing” more money out of thin air is your concern, be concerned not! It’s been going on since we abolished the gold standard to replace it with a fiat system. What’s funny is you make it sound as if this is the “New Dealian” conspiracy. Those darned liberals I tell ya! Uh? Who was it that abolished the gold standard? Could it have been a Republican? Say, a Republican by the name of Nixon? Say in the 1971A.D.? It’s quite possible. BTW, FDR didn’t “pro”long the depression nor did he initiate it. What did initiated the Great Depression then you ask? A Wall Street with wild speculation and rampant financial institutional corruption, you know? Kinda like the one today (think Enron.) The so-called fiat system is not the problem. The problem is greedy corporate bought presidents that have borrowed to finance their corrupt constituents. Let’s see “why” the U.S. government “needs” to continuously print more money. An Analysis of the Presidents Who Are Responsible for the Borrowing: http://www.cedarcomm.com/~stevelm1/usdebt.htm So, maybe it’s not the monetary system’s fault but the greedy bastards that steal while they are in office. They steal because they know they can. They can always print more money and pass the debt down to future generations. By that time they will have been long gone and all accountability will have been deflected. As it has been. Gold standard supports and fiscal conservative love to point to FDR’s New Deal as some “Socialistic” turning point which has resulted in fiscal irresponsibility ever since. But looking at the record shows otherwise. It’s both Democrat and Republican fiscal irresponsibility which has gotten us to this point. FDR is no more to blame than the Reagan-Bush administration. Two of the all-time spending administrations in U.S. history. And btw, they’ve printed money very well thank you!

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