The apocalyptic drumbeat continues:

A Chinese ratings house has accused the United States of defaulting on its massive debt, state media said Friday, a day after Beijing urged Washington to put its fiscal house in order.

“In our opinion, the United States has already been defaulting,” Guan Jianzhong, president of Dagong Global Credit Rating Co. Ltd., the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying.

Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies — eroding the wealth of creditors including China, Guan said.

Guan did not immediately respond to AFP requests for comment.

The US government will run out of room to spend more on August 2 unless Congress bumps up the borrowing limit beyond $14.29 trillion — but Republicans are refusing to support such a move until a deficit cutting deal is reached.

Ratings agency Fitch on Wednesday joined Moody’s and Standard & Poor’s to warn the United States could lose its first-class credit rating if it fails to raise its debt ceiling to avoid defaulting on loans.

Question: Who has stronger financial incentives to accurately gauge the path of the dollar? Chinese sovereign-debt investors or Paul Krugman?

But before I go: This important, Earth-shaking news just hit my desk, courtesy of Virginia governor Bob McDonnell. For reasons known only to God, the farm lobby (a.k.a Big Elmer), and Governor McDonnell, setting up Web sites to sell apples and the “Beautiful Gardens Plant Breeders Workshop” are pressing public priorities in the Old Dominion, requiring taxpayer subsidies. You Virginians need the government to help you build a Web site? What, they don’t have seventh-graders in Virginia?

Couldn’t Republican officeholders at least pretend to be ashamed of this stuff?

RICHMOND — Virginia Governor Bob McDonnell announced funding today for eighteen agriculture-related projects which will promote and enhance the competitiveness of Virginia’s specialty crops.  The projects resulted from the competitive grant process established by the Virginia Department of Agriculture and Consumer Services (VDACS) for the United States Department of Agriculture (USDA) Agricultural Marketing Service Specialty Crop Block Grant funds. 

Commenting on the grants, Governor McDonnell said, “These grants represent a half-million dollar investment in Virginia’s economy that will boost economic development and create jobs in agriculture, Virginia’s largest industry.  This is a diverse group of very innovative projects that include marketing, development, research and engineering projects, all of which are designed to increase the competitiveness of specialty agricultural crops in Virginia.  I congratulate these individuals, educational institutions, and organizations for advancing ideas that will help growers add value and enhance market and job creation opportunities across Virginia.”

The Specialty Crops Competitiveness Act of 2004 authorized the USDA to provide funds to the states to promote specialty crops including fruits, vegetables, tree nuts, dried fruits and nursery crops. When considering grants for the USDA Specialty Crop Program, VDACS gave priority to projects that included the following activities:  assisting farmers in transitioning into specialty, high value agricultural initiatives that address the eligible specialty crops; increasing net farm income through high-value or value-added enterprises; finding new ways to market or to add value to specialty agricultural products; and developing pilot and demonstration programs in specialty agriculture that have the potential for transferability within rural Virginia.

VDACS is awarding grants totaling $513,226.81, the largest amount ever for the block grant program, for the following projects:

Specialty Crops Cooling and Packing, Kevin Semones, Southwest Virginia Farmers Market, Hillsville 

Handling and Use of Poultry Litter Incineration Ash Byproducts as Organic Fertilizer in Fresh Market Tomato Production, Jane Corson-Lassiter, Eastern Shore Resource Conservation and Development Council, Accomac 

Performance of a Novel Solar Greenhouse Prototype, Naraine Persaud, Virginia Tech, Blacksburg  

Marketing Expansion Initiative Promoting Virginia Grown Christmas Trees, Jeff Miller, Virginia Christmas Tree Growers Association, Christiansburg 

Increasing the Competitiveness of Virginia Specialty Crop and Disadvantaged Farmers through a Statewide Situational Assessment of the VA Farm-to-School Program, Matt Benson, Virginia Tech, Blacksburg 

Educational Opportunities for Farm Direct Marketers and Farmers’ Markets, Cathy Belcher, Farmers Direct Marketing Association, Richmond 

Increasing the Competitiveness of Virginia Grown Strawberries , Gail Moody Milteer, Virginia Department of Agriculture and Consumer Services, Franklin  

Beautiful Gardens Plant Breeder Workshop, Alexander Niemiera, Virginia Tech, Blacksburg 

Increasing GAP Certification Readiness among Organic and Conventional Growers and Nutrition Knowledge and Consumption of Specialty Crops among Children and Adults in Southwest Virginia, Kathlyn Terry, Appalachian Sustainable Development, Abingdon 

Developing, Teaching and Promoting Sustainable and Organic Growing Practices at Maple Hill Educational Farm, Marisa Vrooman, Local Food Hub Inc., Scottsville

High Resolution Vineyard Site Suitability Mapping, Peter Sforza, Virginia Vineyards Association, Clifford 

Organic Management of Pest Predation in Commercial Production of Summer Squash, Kevin Damian, Virginia Association for Biological Farmers, Louisa 

Working Capital Grant to Develop a Broad Based Website for the Promotion of Virginia Apples, Diane Kearns, Virginia Apple Growers Association, Charlottesville

Connecting Southwest Virginia Farmers to Institutional Buyers through Local Food Processing and Preservation, Michal Burton, Sustain Floyd, Floyd 

Expanding Markets for Virginia’s Specialty Crops, Butch Nottingham, Virginia Department of Agriculture and Consumer Services, Onley 

Improved Management of Harlequin Bug in Cole Crops, Thomas P. Kuhar, Virginia Tech, Painter 

Stink Bug Populations, Injury and Control on Primocane-bearing Caneberries, Douglas G. Pfeiffer, Virginia Tech, Blacksburg 

Production and Marketing of High Tunnel Grown Ginger Roots In Virginia, Reza Rafie, Virginia State University, Petersburg

But Exchequer does. Despair will resume on Monday, October 11. Until then, hold onto your wallets, contemplate whether the Republicans have really got religion on spending, and check in with fellow worrywarts Steve Spruiell, Reihan and Josh, Andrew Stuttaford, and bossman Rich Lowry. And if these guys fail to fill your doom-and-gloom fix, and you absolutely need something else to worry about, Andy McCarthy is here for you, with a whole raft of trouble of the sort that even money can’t buy off.

Pres. Barack Obama’s plan for yet another round (!) of stimulus spending, this time focused on highway infrastructure work, is, like so many products of this administration, something other than what it seems. What Obama is proposing is another backdoor bailout for spendthrift states, such as his political home state of Illinois, giving them large injections of federal money so that they can redirect spending that would be dedicated to highway projects to other areas—e.g., to the government-employees’ unions that are Obama’s most loyal constituency. Call it “No Blue-State Appropriator or Union Goon Left Behind, Part Whatever.”

The highway system in particular (and the transportation racket more generally) is a source of endless financial shenanigans and a rich seam of political patronage to be mined by Obama’s allies at the state and local levels. The federal highway system is maintained by a combination of federal and state spending (in a few cases, local spending as well) with the bulk of the states’ money coming from gasoline taxes and fees levied on car owners. Illinois, for example, levies a 39-cents-a-gallon tax on gas (the sixth highest in the nation, according to the Tax Foundation), and it also applies its general sales tax (another 6.25 percent) to gas. Once you figure in the total tax burden, government levies are probably a bigger contributor to the price of a gallon of gas in Illinois than is the crude oil from which it is distilled. So, what does Illinois get for its money?

Part of what it gets is the Illinois Department of Transportation (IDOT), one of those wonderfully, comically inept state agencies that does things that make political analysts laugh and taxpayers weep: things like deciding to suddenly stop doing roadwork because they are out of gas money (irony!) or threaten to start leaving roadkill on the highways unless the state gives them another $20 million.

Highway maintenance is important, of course. But that’s not all that IDOT does with its money. For instance, IDOT helps to maintain a vast network of full-employment programs for petty bureaucrats, called “regional planning agencies.” Every region in the state has one, and they are not small: The Chicago version lists 94 staffers on its website. Its budget of $16.7 million comes mostly from IDOT ($3.8 million) and the Federal Highway Administration ($11.5 million), with money reshuffled from other government agencies, local levies, and our friends over at the Environmental Protection Agency (no, really!) kicking in another $1 million or so. Nearly a hundred bureaucrats spending state transportation money, FHA money, and EPA schmundo, doing . . . what? Overseeing roadwork? Not exactly.

Because our entire government is turning into a bank, IDOT is in the business of making low-interest loans and grants for business-related projects that it likes under its Economic Development Program (EDP). These are supposed to be transportation-oriented projects, but “economic development” is a famously elastic definition under which to operate.

May I give you a little flavor for how carefully this economic-development business is managed? Here’s an excerpt from the minutes of a recent meeting of the Chicago Metropolitan Agency for Planning, or CMAP. Mr. Blankenhorn is CMAP’s executive director, Ms. Powell its chairman:

Mr. Blankenhorn said IDOT’s FY2010-11 budget includes $5 million to fund Metropolitan Planning Organizations statewide, with CMAP due to receive $3.5 million of that. He said the drawback is that all the money is supposed to be used for transportation planning, and while some of CMAP’s programs, such as community and economic development, can be tied in, most cannot. He said IDOT has promised to be flexible in what spending it will allow, but it’s really up to the General Assembly to provide funding for an agency it created to do more than transportation planning. He urged CAC members to mention the need for funding other areas if they meet with their legislators or people in leadership roles at other state agencies. Mr. Mellis asked if this means CMAP is fully funded for next year. Mr. Blankenhorn said the funding is buried in IDOT’s budget, but it’s in there. Ms. Powell said CMAP is technically not fully funded if it has programs it can’t pay for. Mr. Blankenhorn agreed and said he will no longer use the term‚ fully funded.

Buried in its budget, but they’ll be flexible! Sweet.

So, what does CMAP spend money on? Personnel, mostly — more than half of its budget goes to salaries and compensation: Just over $9.3 million is budgeted for FY2011, or about $100,000 for each of the 94 staffers listed. (I’m looking to see how lavishly compensated the top staffers are and will update you when I get the information.) If you start pumping billions of dollars into bridges and highway resurfacing, you free up a lot of money for the CMAPs and such of the world. But given the sorry record of previous “shovel ready” stimulus programs, don’t be surprised if the bridge-and-blacktop stuff is skipped altogether and the money goes straight into “community development” projects.

This is the sort of horsepucky upon which President Obama proposes to lavish another $50 billion. Stop him.

– Kevin D. Williamson is deputy managing editor of National Review.

. . . city hall is where they might do some good. Union goons, meet Exchequer’s new favorite mayor, Tomás Regalado of Miami. (Technically a non-partisan election; he’s a Republican.)

Miami commissioners are likely to impose contracts on the city’s employee unions that will cut wages and pensions to ease a projected $96.5 million operating- budget gap next fiscal year, Mayor Tomas Regalado said.

“Probably in two weeks the commission will impose a contract whereby we will be reducing salaries and pensions, which is what’s responsible for the deficit,” the first-term mayor said in an interview on Bloomberg Television outside City Hall today.

Miami faces a pension payment exceeding $100 million in the fiscal year that begins Sept. 30, Regalado said, which will consume a fifth of its operating budget. Moody’s Investors Service and Standard & Poor’s both cut the city’s general- obligation bond ratings in the past two months, citing the deficit and pension costs.

Get that, taxpayers and bond-market watchers: Government workers’ pensions alone will consume 20 percent of the city of Miami’s operating budget. For many states and municipalities, it is going to get a lot worse than that very soon.

Miami has been playing catch-up on its pensions since the Carter administration, when it came to light that the city was using pension funds for general operating expenses. But with a city attorney who is paid $380,000 a year and a deputy — deputy! — fire chief who is paid $353,000 a year, Miami has a long way to go achieving fiscal sanity. (Would you like a list of Miami’s city salaries? It is here. Read it and retch.)

Mayor Regalado does not want to increase taxes; Miami, already among the cities hardest hit by the real-estate crash, really cannot be jacking up property taxes with tens of thousands of vacant condos languishing on the market. So, he’s biting the bullet, cutting the fat where it’s found — in the paychecks of overfed city bureaucrats — and, apparently, trying to do the right thing.

Hope he has an exit strategy.