Thursday, February 19, 2009

The Death of Federalism

Last year's bailouts, supported by the Republican House and Senate leadership and signed into law by President Bush, spelled the death of capitalism.  The more I think about it, it appears that this bailout is the death of federalism, or the idea that there should be separate levels of government.  One of the major part of the Obama bailout is the bailout of the state governments.  Now instead of being forced to face the tough decisions of how to balance their budgets, the states can now depend on the federal government.  

In Virginia we were facing the need for across the board budget cuts.  When the bailout was passed, we decided we didn't have to cut back on any spending.  This is the inverse of losing your job, your parents letting you move in, and then not getting a job above minimum wage since your expenses were minimal.  

A couple recent quotes help illustrate how bad this problem has become.  The first comes from the governor's revenue figures.
“In sum, the combination of the downward and upward adjustments to biennial revenues should produce a positive benefit to the Virginia budget, avoiding the need for additional budgetary cuts in the near term.”
The second is from a recent e-mail from Sen. Obenshain concerning the budget process.

As the Senate debated Virginia’s budget on Wednesday, several senators thanked certain of their colleagues and staff for their hard work and cooperation. One of my Democratic colleagues, however, stood and extended her thanks to thank President Barack Obama and to Congressional Democrats. She thanked them for the passage of the “stimulus bill,” asserting that it was only through their generosity that we were able to balance the budget without deeper cuts.

If the states are essentially on federal welfare now, I wonder how long it will be till the federal government will be on welfare...

(Sen. Obenshain's response to this unnamed colleague was definitely worth reading.)

1 comment:

Alan said...

America needs to wake up and speak up!

http://www.cnbc.com/id/15840232?video=1039849853