Saturday, February 21, 2009

Implictions of Governors Turning Down Stimulus Money

First, it is not really a stimulus package...it has some but its a spending package with some strange tax breaks integrated. There are certainly better ways to stimulate the economy in the short-term than this bill. Nevertheless, it passed and we have to live with it.

Second, can governors really elect not to take the money? Is it really an option?

The governors of Louisiana, Alaska, Idaho, Mississippi, South Carolina and Texas feel that some of the attached strings are too great.
Their states may not want to meet the conditions that accompany the money or expand programs that will have to be paid for by the state once the stimulus money runs out.

"You may get yourself out of a temporary budget hole, but create another budget hole in the next 24 months," said Gov. Mark Sanford of South Carolina
The key issue appears to be expand unemployment coverage and follow-on entitlements.

Are we seeing the seeds of state succession being sown? If the economy turns around in a year or so, no. But if this recession morphs into a depression and continues for years, then the possibility is a reality. People will only take thievery for so long.

The personal and corporate tax burdens are beyond anything I thought we'd ever experience. When you ad up federal, state, local, property taxes, licensing taxes, sales taxes, interest income tax, dividends, capital gains, it easily gets to over 50 percent for the middle class family. We have one of the highest corporate tax rates in the western world. Are these levels the right amounts? Are we getting a fair return? I think we are getting cheated.

I cannot get away with financial theft, why does the government get a free pass? The government has a role albeit somewhat limited IMO, but over the past 50 years, little by little for the most part, in large steps in others, they have exceeded their Constitutional obligations.

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