NRO’s eye on debt and deficits . . . by Kevin D. Williamson.

WaPo Offers Clueless Account of States’ Budget Crises


Michael A. Fletcher of the Washington Post deserves some sort of prize for D.C. conventional-wisdom regurgitation for his piece on the states’ budget crises. Check out this lead:

State governments desperately need money. Congress is in no mood to spend it. And the reckoning will begin Thursday, when the new fiscal year will start for most states.

Nothing less than the nation’s nascent economic recovery hangs in the balance. States say that if they do not find financial rescue they will have to cut services and workers. That would deliver a potentially crippling blow to the economy, which needs higher employment levels to fatten wallets, promote spending, bolster tax revenue and reduce dependence on expensive social services.

The paradox of spending ourselves out of a budget crisis is beyond the powers of the best and the brightest at the Washington Post. Later in the piece, he writes:

… with the emergency federal money drying up, states are being forced to make draconian cuts that economists warn undermine the stimulus effort.

Which economists would those be? The 73 percent of economists who think the stimulus accomplished approximately zilch?

And what about those “expensive social services” programs? You know what the most expensive social-service program is? A government job. The wage premium for government employees is enormous, especially when one considers the pensions and other benefits attached to those inflated salaries. The states are running out of money in no small part because they are running out of well-off people to steal from, and because they are spending faster than they can steal. And I use the word “steal” advisedly: What’s going on with state employees, who are using their political muscle to capture economic benefits far beyond anything they could win in a competitive marketplace, is theft. If a bunch of them lose their jobs, that’s not an economic crisis: It’s a first step toward rationalizing our economy.

Question for Mr. Fletcher: Where exactly would that state-aid money come from? Taxpayers on Mars? Lawmakers, he writes, “are reluctant to raise taxes, particularly as the economies in so many states are listing, leaving governors little option but to make deep cuts.” But some taxpayer somewhere has to put up the money for that aid. So if we’re going to bail out a spendthrift state like Maryland, we have a choice: Tax Marylanders to fund their state’s uncontrolled spending, or tax non-Marylanders to fund their state’s uncontrolled spending. What exactly is the case for punishing more responsible states to subsidize less responsible states? Either way, federal tax dollars don’t get miracled into existence any more than state tax dollars do.

Or we can borrow, taxing future taxpayers to underwrite present stupidity. But our ability to borrow has its limits, even at the federal level. You do not want to discover those limits the hard way.

Nowhere in the piece does Fletcher even briefly consider the possibility that states are spending too much money, and that their spending less money would be a good thing for the economy and for the country. Every source he talks to is either a member of a liberal advocacy group or somebody who makes his living spending taxpayers’ money (to the extent that one can distinguish between those two categories). It’s pretty shoddy journalism, and it reveals an underlying assumption: Every time a possible spending cut is mentioned, it is presented as a tragedy and as something that will harm the overall economy, even though lots of government spending produces zero economic value, or marginal economic value: Random example, one of many thousands, here.

It would not have been too terribly difficult for a Washington Post reporter to find an economist with a different perspective on this issue, or an actual taxpayer who suspects that fruit-fly research in Paris is not an especially high-yield use of American tax dollars. These are not radical ideas. But, as Upton Sinclair put it, “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

Tags: Spending , States


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