Some states to shun stimulus funds

According to the Christian Science Monitor, At least six governors have said they may refuse money. CNN also has some a decent story on it.

“We’re concerned that we’re just going to be doling out million dollar hugs,” says Jon Hanian, Governor Otter’s press secretary. “It really comes down to the proper role of government, and that is a soul-searching question we’re engaged in here in Idaho right now.”

Alaska Gov. Sarah Palin, Mississippi Gov. Haley Barbour, Louisiana Gov. Bobby Jindal, South Carolina Gov. Mark Sanford, and Texas Gov. Rick Perry have joined Otter’s revolt.

Indiana Gov. Mitch Daniels has also raised concerns about future state obligations especially for education, welfare, and healthcare spending, which make up the bulk of the $787 billion package.

“Some school systems will see a gusher of money the like of which no one has seen before,” said Governor Daniels at a press conference last week. “When federal funds stop coming, there will not be any way to replace all of that.”

And a bit further down the story says But Jindal, who called the stimulus debate “a great opportunity” to offer conservative-based solutions, countered, “We should be unafraid to stand up on principles and point out alternative solutions.

This could be the first step in removing federal government interference in what should constitutionally be a state issue.  Just imagine if we could get more states to “stand up on principles” and refuse federal money – and the strings that are always attached to that money.

Mississippi’s Governor Barbour objects to a provision that extends unemployment benefits to people who have turned down full-time employment. Similarly, South Carolina’s Governor Sanford thinks extending unemployment benefits to part-time workers will bankrupt the state’s unemployment trust.

“The only strings attached to this money is if you have a community that for the last 30 years has had persistent poverty rates … then you must direct 10 percent of this money to those communities,” says Rep. Clyburn. “If you don’t want this pot of money because that string is attached, what am I to conclude from that?”

Representative Clyburn – you may safely conclude that they don’t want money with strings attached.  Ideally, they wouldn’t want your money, because they know it’s really their money anyway, but that’s probably too much to hope for at this point.  I’m taking it one step at a time, trying to undo this mess the same way it was created, one step at a time.

The underlying cause for the resistance has to do with state sovereignty, says Byron Schlomach at the conservative Goldwater Institute in Phoenix. Will a short-term federal government intervention weaken states’ rights by making them more financially beholden to Washington?

That’s an issue that is particularly relevant as the revolt is largely coming from states such as Louisiana, Mississippi, and Alaska, whose residents currently receive some of the highest shares of federal subsidies in the country. These states, argues Mr. Schlomach, know the price that comes with federal largess. “We’re giving up our sovereignty and putting the federal government even more in the driver’s seat,” he says.

Highway funding, HUD funding, etc. all come with caveats, and maybe this will be the straw that broke the camels’ back.  I’m not optimistic that this will be the case, but at least it’s cause for hope in an otherwise hopeless situation.

What’s my alternative plan?  Do nothing.  Let the bad companies go broke.  Let the people who bought more house than they could afford go broke.  Let them live with relatives or at a church run charity.


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